Calculate how much capital you recapture after refinance, what stays in the deal, and your cash-on-cash on remaining equity.
I work with value-add investors regularly. Send me the property and I can pull comps, run the ARV, and tell you if the numbers work.
Buy, Rehab, Rent, Refinance, Repeat. Purchase a distressed property below market, renovate to increase value, rent it, then refinance at the new higher value to pull cash back out. The goal is to recover most or all of your invested capital to redeploy into the next deal.
It is more challenging than 2019-2021, but it still works in the right conditions. The strategy requires finding distressed properties at 15-25% below ARV before rehab. Best opportunities are east of I-35, Pflugerville, Manor, and parts of south Austin. At 7% refinance rates, you need strong ARV relative to all-in cost to recapture capital.
Most conventional lenders allow up to 75% LTV on single-family investment property cash-out refinances. DSCR lenders may allow 70-80%. I can connect you with Austin lenders who specialize in investment property refinances.
ARV (After Repair Value) is what the property will be worth after renovation. The refinance amount is based on ARV — overestimating ARV is the most common BRRRR mistake. Base ARV on recent comparable sales of renovated properties in the same submarket, not asking prices.
Cosmetic rehab (paint, flooring, fixtures, kitchen refresh): $20,000-$40,000. Full renovation with kitchen and bath gut: $50,000-$100,000. Structural or systems work adds more. Budget 20% contingency over contractor quotes. Under-budgeting rehab is the most common BRRRR execution risk.
During the rehab period: hard money or construction loan interest, property taxes (pro-rated), insurance, utilities, and HOA. On a 4-6 month Austin rehab, holding costs can run $15,000-$25,000. Always include them in your all-in cost.
MLS properties with price reductions and high days-on-market, probate and estate sales, expired listings, off-market deals through wholesalers, foreclosures, and tax-delinquent properties. I work with investors on both MLS and off-market channels — reach out and we can discuss deal sourcing for your target area.
All-in cost = purchase price + rehab + closing costs (buy) + holding costs. Refi loan = ARV × LTV. Net refi proceeds = refi loan minus refinance closing costs. Capital recaptured = net refi proceeds. Capital left in deal = all-in cost minus net refi proceeds (0 or negative means you recaptured all capital plus profit). Equity retained = ARV minus refi loan.
Post-refi cash flow uses a 30-year amortization on the refi loan. Cash-on-cash on capital left in deal is meaningful only when capital left in is positive. If zero or negative (infinite CoC), you have recaptured all your capital. Last updated July 2026.
