Three-bedroom single-family rental

BRRRR Cash-Out Refinance Funding Example

Buy → rehab → rent → refinance → repeat

Purchase a rental for $190,000, renovate it with a $55,000 hard-cost budget and evaluate a $350,000 stabilized value with $3,300 monthly rent. The starting plan allows four renovation months and four months for leasing and refinance preparation. It shows how much cash is recovered and how much stays in the property.

By Jaken Finance Group · November 7, 2026

Edit this funding example

Property illustration: three-bedroom single-family rental — Property illustration for this funding example.

How this funding example works

The starting calculation follows the assumptions described above. Change inputs in the calculator to explore your own numbers. All rates, leverage, rents, cap rates and fees are planning assumptions; they do not establish an offer, appraisal or loan eligibility.

Use the renovation to create a rentable asset

This example converts a dated house into a stabilized rental rather than relying on a quick resale. The initial bridge facility has a purchase advance and staged work funding. The owner supplies closing costs, fees, uncovered budget and carrying cash. A proposed appraisal is not cash available to pay a contractor.

The project loan is drawn in stages. Acquisition funds advance at closing; work is paid before equal month-end reimbursements. Interest is paid from owner cash on the beginning monthly drawn balance. No rent is credited during renovation, construction or lease-up, which keeps the project carry visible. The cash schedule includes the temporary need to pay work before receiving a draw.

Make the example your own

Edit the deal. See the cash change.

Change any assumption to update the loan sizing, cash requirement and exit. Starting values are planning assumptions; actual terms require property and borrower review.

Purchase and renovation budget

Purchase price ($)

Renovation hard costs ($)

Soft costs, permits and professional fees ($)

Contingency on hard costs (%)

Acquisition closing costs, excluding loan fee ($)

Project financing and timeline

Assumed purchase-price advance (%)

Assumed work-budget advance (%)

Completed-value loan ceiling (%)

Project loan annual interest rate (%)

Origination fee on commitment (%)

Renovation months

Sale or lease-up/refinance months after renovation

Project loan term available (months)

Extension / other project financing fees ($)

Monthly carrying costs and liquidity

Monthly property taxes during project ($)

Monthly project insurance ($)

Monthly utilities during project ($)

Other monthly holding costs ($)

Unspent liquidity reserve ($)

Retained cash, separate from spent contingency. Excluded from project profit and costs.

Completed property value

Supported stabilized value assumption ($)

Stabilized monthly rental operations

Monthly scheduled rent ($)

Monthly property taxes ($)

Monthly rental insurance ($)

Monthly HOA ($)

Vacancy / collection loss (%)

Management on collected rent (%)

Repairs allowance on scheduled rent (%)

Capital replacement allowance on scheduled rent (%)

Permanent financing and closing costs

Assumed permanent loan-to-value ceiling (%)

Permanent annual interest rate (%)

Amortization (years)

Minimum rent-to-PITIA coverage assumed

New loan origination fee (%)

Other refinance / purchase closing costs ($)

Nonrefundable third-party, legal, title, recording and applicable transaction taxes. Exclude origination and refundable escrow funding.

Initial escrow / lender reserve funding at closing ($)

Cash withheld at closing, treated as a retained asset rather than a project expense. Do not also include it in fees or the separate liquidity reserve.

Project loan prepayment charge at exit ($)

Starting example shown below. Inputs update automatically when JavaScript is available.

Modeled permanent loan: $262,500
Net refinance cash / cash needed if negative: $14,438
Owner cash remaining in the deal: $40,415
Monthly owner cash flow after reserves: $263

Acquisition and project budget
Property purchase	$190,000
Hard costs	$55,000
Soft costs / permits	$5,000
Contingency assumed fully spent	$5,500
Eligible acquisition and work budget	$255,500
Acquisition closing costs	$8,000
Project loan origination fee	$4,730
Extension / other project financing fee	$0
Drawn-balance interest through exit	$15,122
Tax, insurance, utilities and other holding costs	$8,000
Total project cost before sale/refinance costs	$291,352

Project funding and liquidity
Modeled total loan commitment	$236,500
Acquisition loan advance	$171,000
Work funds disbursed in stages	$65,500
Cash spent at acquisition closing	$31,730
Cumulative owner cash spent before exit	$54,852
Peak cash spent before monthly reimbursement	$58,950
Unspent liquidity reserve	$10,000
Peak liquidity required including reserve	$68,950
Work months	4
Post-work sale / lease-up and refinance months	4

Stabilized monthly rental operations
Scheduled rent	$3,300
Collected rent after vacancy	$3,135
Management	$251
Repairs allowance	$165
Capital replacement allowance	$165
Taxes, insurance and HOA	$500
Permanent principal and interest	$1,791
Owner cash flow before income taxes	$263

Refinance exit waterfall
Value-based loan ceiling	$262,500
Coverage-based loan ceiling	$329,827
New permanent loan	$262,500
Project loan principal payoff	$236,500
New loan origination fee	$6,563
Other refinance closing costs	$3,500
Initial escrow / lender reserve funding	$1,500
Project loan prepayment charge	$0
Net refinance cash / cash needed if negative	$14,438
Cash remaining invested after refinance	$40,415
Permanent monthly principal and interest	$1,791
Rent ÷ PITIA	1.44×
Cash-on-cash on positive cash remaining invested	7.8%
Total project cost including refinance and prepayment fees	$301,415

Inspect the monthly work, draws and cash schedule

Monthly project cash schedule
Month	Work paid	Loan draw	Ending loan balance	Interest paid	Other carry	Owner cash spent to date
1	$16,375	$16,375	$187,375	$1,496	$1,000	$34,226
2	$16,375	$16,375	$203,750	$1,640	$1,000	$36,866
3	$16,375	$16,375	$220,125	$1,783	$1,000	$39,649
4	$16,375	$16,375	$236,500	$1,926	$1,000	$42,575
5	$0	$0	$236,500	$2,069	$1,000	$45,644
6	$0	$0	$236,500	$2,069	$1,000	$48,713
7	$0	$0	$236,500	$2,069	$1,000	$51,783
8	$0	$0	$236,500	$2,069	$1,000	$54,852

Results round to whole dollars; calculations retain unrounded amounts. Retained liquidity is not a spent project cost. Initial escrow funding reduces cash available at closing and remains an asset, separate from fees. Negative cash remaining in the deal means refinance proceeds exceed cash spent; those proceeds are borrowed money. Income taxes, tax benefits and ownership distributions are excluded. The entered amortization is separate from loan maturity and the fixed-rate period.

Size the permanent loan from both value and rent

Residential DSCR in this example means monthly rent divided by principal, interest, property taxes, insurance and HOA—often called PITIA. The lender-style coverage screen is separate from owner cash flow. Vacancy, management, repairs and capital replacements still reduce spendable cash even if they are outside that rent-to-PITIA ratio.

The refinance uses the lower of the entered value-based ceiling and the coverage-based ceiling. Origination is calculated on the new loan, then other closing costs and any old-loan prepayment charge are deducted. A negative closing result is a cash requirement. Released equity is borrowed money, not project profit.

The starting cash-out ceiling is 75% of the supported value assumption. Lower the rent or increase the permanent rate to see the coverage ceiling take over. The entered amortization sets the principal-and-interest payment; it does not establish the loan’s fixed-rate period or maturity.

Repeat only after reconciling cash left behind

Cash remaining invested equals owner cash spent through the project less net refinance proceeds. The model does not assume that all renovation cash comes back. A larger value can still produce limited proceeds when rent coverage, closing costs or the old loan payoff bind.

Seasoning, lease requirements, credit, reserves, transaction classification and the lender’s valuation can change the available cash-out. Confirm those requirements before the bridge maturity. Once refinanced, use the stabilized cash-flow result to budget ongoing ownership rather than treating the refinance proceeds as rental income.

What to verify for a real property

A value increase does not automatically qualify for cash-out based on that value.
Cash needed at refinance is shown as a negative net closing amount.
The model gives no rent credit during the eight-month starting project period; actual early collections would need a separate documented cash schedule.

Use the published program parameters as the starting program reference. The OCC commercial real estate lending handbook provides general background on development and income-property lending risks; it does not set Jaken Finance Group’s terms.