BRRRR or flip estimator
Run both ends of the value-add play: profit if you flip, vs cash left in the deal if you refinance and keep as rental (BRRRR). Negative cash-left-in means you pulled all your money back out.
Your scenario
Result
ARV is the biggest risk variable — get 3 comps before committing budget. Canadian refi caps at 80% LTV with stress-test re-qualification.
BRRRR vs flip — two ends of the same play
BRRRR (Buy, Rehab, Rent, Refinance, Repeat) and the traditional flip are two endgames for the same value-add purchase. This calculator runs both side by side so you can pick the path before committing rehab dollars.
The flip math
Flip profit = ARV − all-in cost − selling costs − carrying costs. All-in = purchase price + rehab budget. Carrying costs include mortgage interest (during rehab), property tax, insurance, utilities, and HOA. Selling costs typically run 6% (commission + HST + legal).
The BRRRR math
BRRRR caps the refi at 80% LTV in Canada (OSFI rule). After rehab the property gets re-appraised at the higher ARV. The refi pulls 80% of ARV out as cash; the difference vs your original all-in cost is "cash left in" — and the goal is to get that to zero or negative.
Canadian-specific constraints
- 80% LTV refi cap — vs 75% in some US programs, so Canada is slightly more favorable for BRRRR
- Federal stress test on refi — you must re-qualify at the higher of contract + 2% or 5.25%, on the LARGER new mortgage
- Capital gains on flip — flipped properties are taxed as business income (100% inclusion), NOT capital gains (50% inclusion). Bad news for after-tax returns.
- HST on flip sale — substantially renovated properties may trigger HST/GST on the resale price (provincial variation)
Where BRRRR fails
- Markets where ARV barely exceeds all-in cost (central Toronto, Vancouver) — margin too thin to pull cash out
- Stress test bumps your qualifying ratio when re-applying — borderline files get declined at refi
- Rehab budgets overrun (very common) — eats the spread
- Time markets — extended rehab + soft sale market kills flip; same delay + rate rise kills BRRRR refi
Get three comps
ARV is the single biggest risk variable. Before committing rehab dollars, get three independent comps from a local realtor with recent transaction data — not Zillow / HouseSigma estimates. If you can't support ARV with comps within 5%, kill the deal.