Flipping & BRRRR Strategy ROI Calculator

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Flipping & BRRRR Strategy ROI Calculator

Calculate ROI, cash flow, and equity growth for house flipping and BRRRR real estate investments.

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Quick Tips
  • Flipping realizes profit fast but is taxed as ordinary income in most cases and ends when the sale closes.
  • BRRRR keeps the asset and can generate ongoing cash flow, but ties up landlord responsibilities indefinitely.
  • An accurate ARV or sale price estimate matters more than almost any other input — get a real comparable analysis.
  • Always budget a contingency above your rehab estimate — renovation surprises are the norm, not the exception.

Total Profit

$15,500
Total Investment
$0
Return on Investment
0%
Net Proceeds
$0

Last updated: August 10, 2026

House Flipping vs BRRRR: Two Paths to Real Estate Wealth

Flipping: Buy distressed property for $150K, invest $50K in rehab, sell for $250K = $50K profit in 6 months (minus 10% in costs = $25K net). Fast cash, but you pay capital gains tax and start over. BRRRR: Same property, same rehab, but refinance at $200K (80% LTV), pull out your $50K, and rent for $1,800/month. Keep the asset, build equity, repeat indefinitely.

Flipping is a job—you stop working, income stops. BRRRR builds a portfolio that generates passive income forever. The catch? BRRRR requires patience, landlord skills, and dealing with tenants. Flipping needs speed, accurate rehab budgets, and timing the market. Both beat stock market returns when done right.

House Flipping Breakdown

Typical Flip Numbers

  • Purchase: $150,000
  • Rehab: $50,000 (kitchen, baths, flooring)
  • Holding Costs: $6,000 (6 months @ $1K/mo)
  • Selling Costs: $18,750 (7.5% commission + closing)
  • Total In: $224,750
  • Sale Price: $250,000
  • Net Profit: $25,250 (11.2% ROI)

Hidden Costs

  • Loan interest: $5-10K (hard money at 10-12%)
  • Property taxes during hold
  • Insurance (vacant property rates higher)
  • Utilities during rehab/staging
  • Permits & inspection fees
  • Unexpected repairs (always budget +20%)
  • Capital gains tax: 20-37% if you flip more than one property/year
Reality Check: HGTV makes flipping look easy. Real success rate for first-time flippers is ~40%. Common failures: overestimating ARV (After Repair Value), underestimating rehab costs, bad timing on market downturn.

BRRRR Strategy Breakdown

BRRRR = Buy, Rehab, Rent, Refinance, Repeat. The goal: recycle your capital by pulling it back out through refinancing, then repeat with another property.

Phase 1: Buy & Rehab

  • Purchase: $150,000 (distressed)
  • Down Payment: $30,000 (20%)
  • Rehab: $50,000
  • Total Investment: $80,000
  • Property Value Post-Rehab: $250,000

Phase 2: Rent & Refinance

  • Rent: $2,000/month
  • Refinance at 80% LTV: $200,000 loan
  • Pay Off Original: -$120,000
  • Cash Out: $80,000 (recover full investment!)
  • Monthly Cash Flow: $300-500/mo

The BRRRR Advantage

You recover your $80K investment through refinancing, so you can do it again. Do this 5 times = 5 properties with the same $80K, generating $1,500-2,500/month total cash flow + equity growth + tax benefits. Infinite ROI because your capital is recycled.

Side-by-Side Comparison

Factor House Flipping BRRRR Strategy
Time to Profit 4-6 months 12-18 months
Initial Capital $50K-100K per deal $50K-100K (reusable)
Profit Type One-time lump sum Ongoing cash flow + equity
Tax Treatment Short-term capital gains (high) Rental income (depreciation offsets)
Scalability Limited by capital & time Infinite (recycle capital)
Risk Level High (market timing) Medium (tenant risk)
Ongoing Work None after sale Property management
Wealth Building Active income (job) Passive income (business)

Critical Success Factors

For Flipping

  • ARV accuracy: Comps within 0.5 mile, sold last 90 days
  • 70% Rule: Max purchase = (ARV × 0.7) - Rehab
  • Speed: Every extra month holding kills profit
  • Contractor reliability: Bad contractor = blown budget
  • Market timing: Don't flip into downturn
  • Exit strategy: Have backup plan if it won't sell

For BRRRR

  • 1% Rule: Monthly rent ≥ 1% of purchase price
  • Forced appreciation: Buy 30-40% below ARV
  • Refinance readiness: Good credit (720+), 6-12 month seasoning
  • Cash flow buffer: $200-300/mo minimum after PITI
  • Property management: DIY or hire at 8-10%
  • Reserve funds: 6 months expenses for vacancies/repairs

Common Mistakes to Avoid

Deal Killers

Flipping:

  • Overimproving for neighborhood
  • No contingency budget (always add 20%)
  • Emotional attachment to property
  • Buying without pre-approved financing
  • Ignoring permit requirements

BRRRR:

  • Refinancing too soon (need 6-12 mo seasoning)
  • Overleveraging (shooting for 100% return)
  • Underestimating vacancy rates (5-10% normal)
  • Bad tenant screening (costs thousands)
  • Ignoring property management burden

Frequently Asked Questions

Flipping: Better for quick cash, don't want to be landlord

BRRRR: Better for long-term wealth, portfolio building, passive income

Flipping: $50K-100K minimum (down payment + rehab)

BRRRR: $50K-100K initially, but reusable through refinancing

Formula: Max Purchase Price = (ARV × 0.70) - Rehab Cost

Example: $250K ARV × 0.70 = $175K - $50K rehab = $125K max purchase

Monthly rent should equal 1% of purchase price

$150K property should rent for $1,500/month minimum

Realistic timeline: 4-6 months total

2-3 months: Rehab

1-3 months: Listing to closing

Yes, if: You buy 30-40% below market and add value through rehab

Banks refinance at 75-80% of appraised value, letting you pull capital out

Flipping: 620+ for hard money, 680+ for conventional

BRRRR: 720+ ideal for best refinance rates and terms

No, but hire licensed contractors

You need permits for major work. Unlicensed work kills appraisal and resale

Options: Keep as rental with original loan, sell (becomes flip), or wait for market appreciation

Always have backup plan before starting

BRRRR: Better in any market (hold long-term)

Flipping: Risky in declining markets, great when prices rising

Frequently Asked Questions

Flipping means buying, renovating, and selling a property for a quick profit — the deal is done once you sell. BRRRR (Buy, Rehab, Rent, Refinance, Repeat) keeps the property: you refinance after renovating to pull cash back out, then rent it long-term for ongoing cash flow and equity.

It depends on the deal and your goals. Flipping can produce a larger lump-sum profit faster, but that profit is typically taxed as ordinary income and the deal ends there. BRRRR often shows a smaller immediate number but adds ongoing monthly cash flow and long-term appreciation on top of any cash recovered.

After Repair Value is what the property will be worth once renovations are complete — it's the single most important number in both strategies, since it drives your sale price (flip) or your refinance loan amount (BRRRR). An inflated ARV estimate can turn a profitable-looking deal into a loss; always base it on real, recent comparable sales, not hope.

It combines your down payment, closing costs, rehab budget, and total holding costs (monthly holding cost times the holding period) — essentially every dollar of your own cash that goes into the deal before you sell or refinance.

If you financed part of the purchase, the remaining loan balance has to be paid off from the sale proceeds before you see any cash — the calculator assumes an interest-only-style payoff of the original purchase loan amount (purchase price minus your down payment) at sale.

It's your annual cash flow divided by the cash you actually have left in the deal after refinancing — not the total purchase price. Because BRRRR aims to recover most or all of your initial cash through the refinance, cash-on-cash return can be very high (or undefined/infinite) when little or no cash remains invested.

It's the money you get back when you refinance: the new loan amount (ARV × refinance LTV) minus your original purchase loan and any refinance closing costs. Ideally this covers most or all of your initial down payment, rehab, and holding costs, letting you redeploy that capital into another deal.

That's normal and still can be a good deal — "Cash Left in Deal" shows how much of your capital remains tied up. As long as the property cash-flows well and builds equity, having some cash left in the deal isn't necessarily a problem, it just means your capital isn't 100% recycled for the next deal.

The calculator assumes a standard 30-year fixed-rate amortizing loan on the new refinance loan amount, using your entered refinance interest rate — the same formula used for a typical mortgage or rental property loan.

These are percentages of monthly rent set aside for realistic ongoing costs: property management (if you hire a manager instead of self-managing), maintenance reserve (budgeting for repairs before they happen), and vacancy (accounting for months the unit may sit empty between tenants). Skipping these in your own math is one of the most common ways new landlords overestimate cash flow.

If you're doing work yourself, it's still worth estimating a fair labor value and including it, even informally — otherwise your ROI looks artificially better than it would be if you had to pay a contractor, which matters if you ever want to compare deals apples-to-apples or scale beyond DIY.

Every month you hold the property costs money (loan interest if financed, taxes, insurance, utilities) captured in the monthly holding cost field. A flip that takes twice as long to complete can meaningfully erode profit even if the sale price doesn't change, which is why accurately estimating your renovation and sale timeline matters.

Generally, flip profits held short-term are taxed as ordinary income (and can trigger self-employment tax if done as a business), while rental income and long-term appreciation in a BRRRR deal may benefit from different tax treatment, including depreciation. Tax treatment is genuinely complex and property/situation-specific — consult a tax professional for your actual numbers.

Yes, plenty of investors evaluate a property under both strategies before deciding, or pivot mid-project if market conditions change (e.g., a soft resale market might favor renting instead). Use the strategy toggle above to compare the same purchase and rehab numbers under both approaches.

Many experienced flippers/investors add 10-20% on top of their contractor estimate as a contingency for unexpected issues (structural surprises, permit delays, price changes) — renovation projects going over budget is closer to the norm than the exception, especially on older properties.

Yes — use "Copy Link" to get a URL that encodes your exact inputs and selected strategy, or export the full deal summary as PDF, CSV, Excel, or JSON using the buttons below your results.

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Total Profit
$15,500
View Breakdown