📖 Overview
This calculator measures whether a BRRRR project successfully returns invested cash at refinance.
It highlights trapped equity and cash recovery percentage for deal screening.
🧪 Example Scenarios
Use these default and higher-pressure example inputs to explore how sensitive this calculator is before using your real numbers.
| Input | Base Case | Higher Pressure Case |
|---|---|---|
| Purchase Price ($) | 185,000 | 222,000 |
| Rehab Cost ($) | 42,000 | 50,400 |
| After Repair Value ARV ($) | 320,000 | 368,000 |
| Refinance LTV (%) | 75 | 90 |
| Holding Costs ($) | 9,000 | 10,800 |
⚙️ How It Works
Calculates cash recycling efficiency in BRRRR projects by comparing total cash invested versus refinance proceeds at target LTV.
The Formula
Trapped Cash = (Purchase + Rehab + Holding) − (ARV × Refi LTV)
| Purchase | Acquisition price |
| Rehab | Total renovation budget |
| ARV | After repair value estimate |
| Refi LTV | Refinance loan-to-value percentage |
| Holding | Carrying and pre-rent stabilization costs |
💡The core BRRRR question is whether refinance returns enough capital to repeat the process without excessive trapped cash.
Quick Reference
| All-In Cost | ARV | Refi LTV | Typical Trapped Cash Outcome |
|---|---|---|---|
| $220k | $300k | 75% | Low or zero trapped cash |
| $260k | $320k | 75% | Moderate trapped cash |
| $300k | $340k | 70% | High trapped cash |
When To Use This
- Use this tool when you need a fast decision during active planning or execution.
- Use this before committing money, time, or tradeoffs that are hard to reverse.
- Use this to compare options using the same assumptions across scenarios.
Edge Cases To Watch
- Results can be misleading if key inputs are missing, stale, or unrealistic.
- Very small or very large values may amplify rounding effects and interpretation risk.
- If assumptions change mid-decision, recalculate before acting.
Practical Tips
💡 Underwrite conservative ARV and refinance terms before purchase.
💡 Track holding costs tightly because overruns quickly trap capital.
💡 Use cash recovery percent to compare deals objectively.
Frequently Asked Questions
❓ What does trapped cash mean?
Capital left in the deal after refinance that cannot be recycled into the next acquisition.
❓ Can cash-out exceed all-in basis?
Sometimes, if appraised value and refinance terms are strong enough.