What Is Equity Left in Deal?
In a BRRRR strategy, the goal is to leave as little of your own money in the deal as possible --- ideally $0, achieving "infinite returns." In practice, most deals leave 10--20% of the original investment in the property because lenders typically cap cash-out refinances at 70--75% of the after-repair value. The less equity you leave in, the faster you can recycle your capital into the next deal. Equity left in deal is the single most important metric for investors focused on velocity of money and rapid portfolio growth.
Equity left in deal is the amount of your own cash that remains invested in a property after refinancing. It is calculated by subtracting the cash you recover through a cash-out refinance from the total cash you originally invested (purchase price, rehab costs, closing costs, and holding costs).
At a Glance
- What it is: Your cash remaining in a property after refinancing out as much as possible
- BRRRR target: $0 left in deal (infinite returns) --- but most deals leave 10--20% of original investment
- Why it matters: Less equity left means more capital available for your next purchase
- Typical refinance limit: 70--75% of after-repair value (ARV) for investment properties
- Key inputs: Total cash invested (purchase + rehab + closing + holding costs) minus cash-out refinance proceeds
- Related concept: Return on equity --- how hard your remaining capital works for you
Equity Left in Deal = Total Cash Invested - Cash Recovered at Refinance
How It Works
Calculating Equity Left in Deal
The formula is straightforward: Total Cash Invested minus Cash Recovered at Refinance equals Equity Left in Deal. Total cash invested includes your down payment, rehab costs, closing costs on both the purchase and refinance, and any holding costs during renovation. Cash recovered is the net proceeds from the cash-out refinance after paying off the original loan and refinance closing costs. If you invested $60,000 total and recover $48,000 at refinance, you have $12,000 left in the deal.
Why $0 Left Matters
When you leave $0 in the deal, your cash-on-cash return becomes mathematically infinite --- any income on zero invested capital is an infinite percentage return. More practically, recovering all your capital means you can immediately reinvest that same $60,000 into the next deal. Over five years, the same $60,000 could cycle through three to four properties instead of being locked in one. This is the velocity of money concept, and it is the engine behind rapid portfolio scaling.
The 75% LTV Constraint
Most conventional and portfolio lenders cap cash-out refinances at 70--75% of the appraised value (ARV). This means you need the gap between your total investment and 75% of ARV to be zero or negative to get all your money back. If you buy a property for $100,000, invest $30,000 in rehab ($130,000 total), and it appraises at $180,000, a 75% LTV refinance gives you a $135,000 loan. After paying off the original $100,000 purchase loan, you get $35,000 back --- but you spent $30,000 in rehab plus roughly $5,000 in closing costs. Equity left: approximately $0. That is a textbook BRRRR execution.
When Equity Left Is Acceptable
Not every deal needs to be a zero-equity-left home run. A property that leaves $15,000 in the deal but cash-flows $400/month still delivers a 32% cash-on-cash return --- far better than most alternative investments. The equity left metric is most important when you are scaling quickly and capital is your bottleneck. If you have more capital than deal flow, leaving $10,000--$20,000 in strong cash-flowing deals is perfectly rational.
Real-World Example
Maria executes a BRRRR in Indianapolis. She purchases a distressed single-family home for $85,000 cash. Her rehab costs $35,000 (new kitchen, bathrooms, flooring, paint, and landscaping). Closing costs on the purchase are $3,000, and holding costs during the 4-month renovation are $2,000 (insurance, utilities, taxes). Total cash invested: $125,000. After renovation, the property appraises at $175,000. She refinances with a portfolio lender at 75% LTV, securing a $131,250 loan. Refinance closing costs are $3,500. Net cash recovered: $131,250 - $3,500 = $127,750. But she originally paid $85,000 cash --- the refinance loan proceeds first cover that, leaving $127,750 - $85,000 = $42,750 in her pocket after paying off the purchase. Wait --- she invested $125,000 total. She recovers $127,750. Equity left in deal: $125,000 - $127,750 = -$2,750. Maria actually pulled out $2,750 more than she invested, meaning she has zero equity left and extra cash. She rents the property for $1,500/month. With a $960 mortgage payment, $150 property management, $120 insurance/taxes, and $120 in reserves, she nets roughly $150/month in cash flow --- on $0 of her own money.
Pros & Cons
- Maximizes velocity of money by freeing capital for the next deal
- Achieving $0 left creates infinite cash-on-cash returns on each property
- Enables rapid portfolio scaling without requiring proportionally more capital
- Forces disciplined acquisition --- you must buy at the right price and execute rehab efficiently to leave nothing in
- Creates a compounding effect: recycled capital builds multiple income streams simultaneously
- Measurable and objective --- no ambiguity in the calculation
- Chasing $0 left can lead to overly aggressive ARV assumptions or underestimating rehab costs
- Higher loan balances from maxing out refinance proceeds increase monthly payments and reduce cash flow
- Seasoning requirements (often 6--12 months) delay your ability to refinance at full ARV
- Appraisals may come in lower than expected, leaving more equity in than planned
- Interest rates at refinance may be higher than projected, reducing net proceeds or cash flow viability
- Properties purchased solely to minimize equity left may underperform on long-term appreciation or rent growth
Watch Out
- Do not sacrifice cash flow for zero equity left: A deal where you recover all your capital but the property barely breaks even on cash flow is a bad deal. You have traded capital recovery for ongoing risk with no income cushion.
- Beware of inflated ARV projections: Estimating a $180,000 ARV when comparable sales support only $165,000 turns a zero-equity deal into a $15,000 equity-trapped deal. Use conservative comps and get a pre-rehab broker price opinion.
- Factor in ALL costs: Equity left calculations must include closing costs on both the purchase and refinance, holding costs during rehab, and lender fees. Forgetting these can turn a projected $0-left deal into a $8,000-left deal.
- Seasoning periods are real: Many lenders require 6--12 months of ownership before allowing a cash-out refinance at appraised value. Some will only refinance based on purchase price during the seasoning period, which defeats the BRRRR strategy. Confirm your lender's seasoning policy before closing on the purchase.
- Leaving money in is not failure: A well-located property in a strong market that leaves $20,000 in the deal but appreciates 5% annually on a $200,000 value generates $10,000/year in equity growth plus cash flow. Context matters more than a single metric.
Ask an Investor
The Takeaway
Equity left in deal is the metric that separates investors who scale from those who stall. Every dollar you leave in a property is a dollar that cannot work elsewhere. The BRRRR strategy is built around minimizing this number --- buying at a discount, adding value through rehab, and refinancing to pull out your capital. But chasing zero at all costs leads to bad decisions. The best approach is disciplined: target deals where conservative ARV projections support full capital recovery, and accept some equity left in deals where the cash flow and appreciation potential justify it.