US BRRRR Calculator: Refinance Cash-Out and PMI Removal

BRRRR method: cash pulled out, cash flow and the PMI rule

The simulator follows the US BRRRR method (Buy, Rehab, Rent, Refinance, Repeat): the new loan equals the after-repair value (ARV) times the LTV ratio, and the capital left in the deal is the total investment minus the cash pulled out. With $189,500 invested and a 75% refinance on a $250,000 ARV, $7,000 stays tied up for a cash flow of $149.64 a month.

Formulas

• Total investment = purchase price + rehab + closing costs.
• New loan = ARV × LTV; cash pulled out = new loan − refinance costs; capital left in = total investment − cash pulled out.
• Payment on a 30-year fixed loan: M = P × i ÷ (1 − (1 + i)⁻³⁶⁰), with i = annual rate ÷ 12.
• Expenses = property tax ÷ 12 + insurance ÷ 12 + management and capex reserve as % of rent.
• Cash-on-cash = annual cash flow ÷ capital left in; if that capital is zero or negative, the tool shows an infinite return.

Worked example

Purchase $140,000, rehab $45,000, closing $4,500: $189,500 invested. At 75% of a $250,000 ARV, the loan is $187,500; after $5,000 of costs, $182,500 comes back and $7,000 stays tied up. At 6.8%, the payment is $1,222.36. Rent of $2,100, expenses of $728 (tax 250, insurance 100, management 8% = 168, capex 10% = 210): cash flow of $149.64 a month, i.e. a 25.7% cash-on-cash return. At 80% LTV, the $200,000 loan returns $5,500 more than you put in (infinite return), but cash flow falls to $68.15.

Limits

For PMI, the tool only shows a flag: $0 if the refinance is at 80% LTV or less, PMI required above that. The maximum LTV for a cash-out refinance on a rental depends on the lender. The tool ignores vacancy, seasoning requirements before a refinance, holding costs during the rehab and tax. This is an indicative estimate and does not replace professional advice.

Sources and dates: Homeowners Protection Act of 1998 (12 U.S.C. 4901 and 4902): PMI cancellation on request when the balance reaches 80% of original value, automatic termination at 78% based on the original schedule, at the latest at the loan midpoint; original value is the lesser of the sales price and the appraised value, or the refinance appraisal (checked on 14/10/2026).

Frequently Asked Questions

How does the BRRRR strategy work?

You buy a discounted property, renovate it, rent it out, then refinance it on its new value to recover all or part of your stake and repeat. In the tool's example, $182,500 comes back out of $189,500 invested: only $7,000 stays tied up, earning $1,795.68 of annual cash flow.

When can PMI be removed from a US mortgage?

Under the Homeowners Protection Act of 1998, the borrower can request cancellation once the balance reaches 80% of the property's original value, provided payments are current. PMI ends automatically at 78% based on the original schedule, and at the latest at the loan's midpoint.

Why does a refinance at 80% LTV avoid PMI?

On a conventional loan, private mortgage insurance is generally required above 80% LTV. By refinancing at 80% or less of the appraised value, the new loan does not need it: the tool then shows $0 of PMI. The maximum accepted for a cash-out refinance on a rental varies by lender.

What does an infinite return mean in BRRRR?

The refinance returned more than your entire stake: no capital remains tied up, so cash-on-cash has no denominator. At 80% LTV, the example frees $5,500 of surplus, but the payment rises to $1,303.85 and cash flow falls to $68.15 a month, leaving little margin for vacancy.

Is this tool really free?

Yes, all tools on Kristools are 100% free and accessible without registration.

Is my data protected?

Yes. All processing is performed directly and securely inside your browser. No personal data is sent to our servers.