Glossary
Cash left in (BRRRR)
Cash left in is the amount of your own money still tied up in a BRRRR after the refinance pays off the first loan. Zero or less means you recovered all your cash.
Cash left in is the scorecard of a BRRRR. The less you leave in, the faster you can buy the next one and the higher your return on what stays.
How to calculate it
Cash left in = cash in before refi - (new loan - refi closing costs - payoff of old loan)
- Cash in before refi (down, closing, points, interest, holding)
- $32,000
- New loan (75% of $280,000)
- $210,000
- Refi closing costs
- -$6,000
- Pay off hard money
- -$180,000
- Net refi proceeds
- $24,000
Loan size and costs are illustrative and vary by lender.
Why it matters
Cash on cash return divides yearly cash flow by cash left in. With $8,000 left in and $2,400 of yearly cash flow, cash on cash is 30%. With zero or less left in and positive cash flow, the return is effectively infinite.
What to watch
- An appraisal 10% low shrinks the new loan by 7.5% of the value. On a $280,000 ARV at 75% LTV, that is $21,000 more cash left in.
- Seasoning rules can cap the loan at your cost basis instead of the appraisal.
- Refi closing costs are real cash. Do not drop them from the math.
- Pulling every dollar out can push the payment past what the rent supports.
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