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THE BRRRR DEAL LAB

A better deal starts with the numbers.

Explore a purchase-to-refinance example, adjust the assumptions, and see how the pieces fit together.

Run your numbers.

Start with a property. Adjust the assumptions to explore your deal.

Financing assumptions · editable
YOUR ILLUSTRATIVE SCENARIO
Initial loan-to-value*85.0%
Total loan-to-cost88.0%
Loan-to-after-renovation value63.9%
Purchase down payment$27,000
Total project equity†$27,000
Estimated refinance loan$232,500
Monthly refinance P&I$1,626
Preliminary DSCR (P&I only)1.60×

*Initial advance ÷ purchase price, used as a proxy for as-is value. Total bridge commitment: $198,000, including a $45,000 renovation holdback. †Purchase plus renovation less bridge commitment; excludes closing costs, interest, draw fees, reserves, and overruns.

DSCR estimate excludes taxes, insurance, and HOA fees. This preliminary ratio is monthly rent ÷ refinance principal and interest. Actual lender DSCR commonly uses rent ÷ PITIA and will be lower when those expenses are included. It is not a cash-flow projection or approval.

Refinance proceeds less bridge principal: $34,500 before payoff interest, fees, and closing costs. A negative result means an estimated payoff shortfall. These assumptions are educational, not offered loan terms.

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How this example works

On a $180,000 purchase with $45,000 renovation, an 85% purchase advance and 100% renovation funding produce a $198,000 bridge commitment, below the $232,500 cap at 75% of ARV. Purchase down payment is $27,000, before fees and reserves. The renovation allocation is a holdback, not cash delivered to you at purchase.

A $232,500 refinance at an assumed 7.5% over 30 years has approximately $1,626 monthly principal and interest. $2,600 rent gives roughly 1.60× P&I-only coverage. Taxes, insurance, HOA, operating expenses, lender limits, and payoff costs change the result.

Try a stress test

Reduce ARV by 10%, reduce rent by 10%, or add 15% to the renovation budget. Is there still enough liquidity to finish the project and pay off the bridge loan?

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