/brrrr

BRRRR Strategy Calculator

ARGUMENTS: Optional property address or "quick" for streamlined input

Instructions

When this command is invoked, analyze a BRRRR investment opportunity:

1. Load Reference Material

Read the property types reference for residential guidance: the references/property-types.md file from the real-estate-investment skill in this plugin

2. Collect BRRRR Inputs

Use AskUserQuestion to gather:

Purchase Phase:

• Purchase price
• Purchase closing costs (default: 2-3% of price)
• Initial loan terms (if financing): down payment %, interest rate, term

Rehab Phase:

• Estimated rehab cost (itemized or total)
• Rehab timeline (months)
• Holding costs during rehab: loan payments, utilities, taxes, insurance

ARV (After Repair Value):

• After-repair value estimate (from comps)
• Source of ARV (appraisal, Zillow, agent CMA)

Rent Phase:

• Expected monthly rent after rehab
• Vacancy rate assumption (default: 8%)
• Operating expenses (% of gross rent or itemized)

Refinance Phase:

• Refinance loan-to-value (LTV) ratio (typical: 75-80% of ARV)
• Refinance interest rate and term
• Refinance closing costs (default: 2-3% of new loan)

3. Calculate Total Investment

Compute all-in cash investment:

Total Investment = Purchase Price
                   + Purchase Closing Costs
                   + Down Payment (if financed)
                   + Rehab Cost
                   + Holding Costs
                   - Initial Loan Amount (if applicable)

4. Validate with Rules of Thumb

Check against BRRRR rules and flag pass/fail:

70% Rule:

• Formula: Purchase Price + Rehab ≤ 70% × ARV
• Pass/Fail indicator
• Margin of safety

1% Rule:

• Formula: Monthly Rent ≥ 1% × Total Investment
• Pass/Fail indicator
• Actual percentage achieved

2% Rule (Aggressive):

• Formula: Monthly Rent ≥ 2% × Purchase Price
• Pass/Fail indicator

5. Analyze Cash Flow After Refinance

Calculate post-refinance operating performance:

• New loan amount: ARV × Refinance LTV
• Monthly debt service on new loan
• Monthly cash flow: (Monthly Rent × (1 - Vacancy Rate)) - Operating Expenses - Debt Service
• Annual cash-on-cash return on remaining equity

6. Calculate Refinance Outcome

Determine capital recycling:

Cash Out at Refinance = New Loan Amount
                        - Remaining Balance on Initial Loan
                        - Refinance Closing Costs

Equity Left in Deal = ARV - New Loan Amount

Capital Recycled = Cash Out at Refinance
Remaining Investment = Total Investment - Capital Recycled

Infinite Return Check:

• If Capital Recycled ≥ Total Investment, investor achieves infinite return (100% capital recovery)

7. Present Stage-by-Stage Breakdown

Format output as clear sections:

Stage 1 - BUY:

• Purchase price and costs
• All-in acquisition cost

Stage 2 - REHAB:

• Rehab budget and timeline
• Holding costs during construction
• Total investment to date

Stage 3 - RENT:

• Expected rent vs 1% and 2% rules
• Monthly cash flow before refinance
• Rule validation (pass/fail table)

Stage 4 - REFINANCE:

• New loan amount and terms
• Cash-out proceeds
• Equity remaining in property
• Closing costs

Stage 5 - REPEAT:

• Total capital recycled for next deal
• Remaining cash invested in this property
• Cash-on-cash return on remaining equity
• Assessment of deal quality

8. Provide Go/No-Go Recommendation

Recommend whether to proceed based on:

• All rules of thumb passing
• Positive post-refinance cash flow
• Acceptable cash-on-cash return (target: >15%)
• Sufficient equity cushion (>20% remaining)

Notes

• Flag if ARV assumption seems aggressive (verify with multiple comps)
• Warn about refinance risk: What if property doesn't appraise at ARV?
• Consider exit strategy if refinance doesn't work out
• Highlight infinite return achievement if applicable