{
  "slug": "brrrr-rehab-budget-vs-arv",
  "title": "BRRRR Rehab Budget vs ARV Calculator",
  "heading": "BRRRR Rehab Budget vs ARV Ratio Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/brrrr-rehab-budget-vs-arv",
  "summary": "Check whether your rehab spend is producing enough ARV lift to justify the cost.",
  "description": "Not every dollar of rehab spend creates a dollar (or more) of after-repair value, and BRRRR investors who overspend on cosmetic upgrades relative to what the neighborhood supports often find their appraisal comes in below what the rehab math assumed. This calculator compares your total acquisition-plus-rehab cost against your projected ARV to compute the all-in cost as a percentage of ARV — a widely used rule of thumb caps this at 70-75% (the same threshold hard money and BRRRR lenders often use) to leave margin for the refinance and a cushion if the appraisal disappoints. It also computes value created per rehab dollar spent, which tells you whether your specific scope of work is efficient: a kitchen and bath remodel in a starter-home neighborhood often returns $1.50-$2.50 of value per dollar spent, while over-improving beyond neighborhood comps (adding a primary suite in a market of 3-bed ranches) frequently returns less than a dollar of value per dollar spent, no matter how nice the finish level is.",
  "formula": "All-in cost = Purchase price + closing costs + rehab cost; Cost-to-ARV ratio = All-in cost ÷ ARV; Value created per rehab dollar = (ARV − purchase price − closing costs) ÷ rehab cost.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=brrrr-rehab-budget-vs-arv",
  "inputs": [
    {
      "id": "purchasePrice",
      "label": "Purchase price",
      "kind": "number",
      "hint": null,
      "default": 165000,
      "unit": "$",
      "min": 1,
      "max": null
    },
    {
      "id": "closingCosts",
      "label": "Acquisition closing costs",
      "kind": "number",
      "hint": null,
      "default": 4500,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "rehabCost",
      "label": "Rehab budget",
      "kind": "number",
      "hint": null,
      "default": 45000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "arv",
      "label": "Projected ARV",
      "kind": "number",
      "hint": null,
      "default": 275000,
      "unit": "$",
      "min": 1,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "costToArvRatio",
      "label": "All-in cost as % of ARV",
      "format": "percent",
      "hint": null,
      "primary": true
    },
    {
      "id": "valuePerRehabDollar",
      "label": "Value created per rehab dollar",
      "format": "decimal",
      "hint": null,
      "primary": false
    },
    {
      "id": "allInCost",
      "label": "Total all-in cost",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "marginToArv",
      "label": "Margin below ARV",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Purchase price: 165000 $",
      "Acquisition closing costs: 4500 $",
      "Rehab budget: 45000 $",
      "Projected ARV: 275000 $"
    ],
    "outputs": [
      "All-in cost as % of ARV: 78.0%",
      "Value created per rehab dollar: 2.34",
      "Total all-in cost: $214,500",
      "Margin below ARV: $60,500"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter purchase price ($).",
      "Enter acquisition closing costs ($).",
      "Enter rehab budget ($).",
      "Enter projected arv ($).",
      "Read your all-in cost as % of arv on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "purchasePrice": 99000,
        "closingCosts": 2750,
        "rehabCost": 27000,
        "arv": 165000
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "purchasePrice": 165000,
        "closingCosts": 4500,
        "rehabCost": 45000,
        "arv": 275000
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "purchasePrice": 264000,
        "closingCosts": 7250,
        "rehabCost": 72000,
        "arv": 440000
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "Why is 70-75% of ARV the common ceiling?",
      "a": "It mirrors the LTV cap most hard money and DSCR refinance lenders use, so staying under it means your all-in cost has a realistic path to being fully refinanced out. It also builds in a buffer against appraisal risk, since ARV projections from comps are estimates, not guarantees."
    },
    {
      "q": "What if my rehab is necessary but doesn't add much value (roof, foundation, sewer line)?",
      "a": "Necessary/structural rehab often returns less than a dollar of value per dollar spent because it's fixing a defect rather than adding a feature buyers pay a premium for, but skipping it isn't optional — a home with a failing roof won't appraise or sell at full ARV regardless. Budget for it separately from value-add scope and don't expect the same ROI ratio from both categories."
    },
    {
      "q": "How do I get a realistic ARV instead of guessing?",
      "a": "Pull at least three to five closed comps within a half-mile, sold in the last six months, similar square footage and bed/bath count, adjusted for condition — not active listings, which reflect asking price, not proven value. An agent or appraiser doing a pre-rehab CMA is worth the cost before committing to a rehab budget."
    },
    {
      "q": "Does this calculator account for holding costs during rehab?",
      "a": "No — add your financing carry, utilities, and insurance during the rehab period to the rehab cost input if you want an all-in figure that reflects true total cash invested, since holding costs during a multi-month rehab are a real and often underestimated expense."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/brrrr-refinance-capture",
    "https://www.revenuelab.fyi/toolbox/hard-money-bridge-cost",
    "https://www.revenuelab.fyi/toolbox/dscr-loan-sizing"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — BRRRR Rehab Budget vs ARV Calculator (https://www.revenuelab.fyi/toolbox/brrrr-rehab-budget-vs-arv)"
}