BRR Deal Walkthrough: Stacking a Real Refurb-to-Refinance Deal
A fully worked BRR example: buy at £120k, refurbish for £25k, revalue at £190k, refinance at 75% LTV. Every line of the maths, money left in, ROI, and the sensitivity test every pack needs.
BRR (buy, refurbish, refinance) is the strategy investors most often ask sourcers to stack, and the one where sloppy maths does the most damage, because the whole model depends on how much of the original cash comes back out at refinance. This walkthrough stacks one deal end to end, showing every line of the calculation, so you can see exactly what belongs in a BRR analysis and where deals quietly go wrong.
The deal on one line
A tired 3-bed terrace, on the market because it needs full modernisation. Buy at £120,000, spend £25,000 bringing it up to a modern rental standard, end value £190,000, refinance onto a buy-to-let mortgage at 75% LTV and let it out.
Step 1: total money in
Every pound that goes into the deal, not just the purchase price. Assuming a cash purchase (we come back to bridging later) by a buyer who already owns property, so the additional-dwelling surcharge applies:
| Item | Amount | Notes |
|---|---|---|
| Purchase price | £120,000 | Agreed below asking on condition |
| Stamp duty (SDLT) | £6,000 | England, additional dwelling: 5% on the full £120,000 under the surcharged rates in force since April 2025 |
| Legal fees and survey | £1,800 | Conveyancing plus a Level 2 survey |
| Refurbishment | £25,000 | Kitchen, bathroom, boiler, rewire, redecoration, flooring |
| Contingency | £2,500 | 10% of the works budget |
| Holding costs | £1,700 | Council tax, utilities, insurance across a 6-month project |
| Total money in | £157,000 |
Two lines here are routinely missed in amateur stacks: stamp duty at the surcharged rate (worth checking on a stamp duty calculator for the right nation) and holding costs, which exist on every project whether or not anyone budgets for them.
Step 2: the refinance
After works, the property is revalued and mortgaged as a standard buy-to-let:
- End value (supported by comparables): £190,000
- Refinance at 75% LTV: 0.75 × £190,000 = £142,500 released
- Money left in: £157,000 − £142,500 = £14,500
- Capital recycled: £142,500 ÷ £157,000 = just under 91% of the cash back out
That £14,500 is the real cost of owning this asset once the dust settles, and it is the denominator for the ROI that follows. Note the timing: most lenders want six months of ownership before they will remortgage, which is why the holding costs above cover six months.
Step 3: cashflow after refinance
| Monthly line | Amount | Basis |
|---|---|---|
| Rent | £950 | Supported by three local rental comparables |
| Mortgage interest | −£653 | £142,500 interest-only at 5.5% |
| Management | −£95 | 10% of rent, fully managed |
| Maintenance and insurance allowance | −£60 | Ongoing provision |
| Net cashflow | £142/month | £1,704 per year |
Step 4: the return
The maths, step by step:
- Annual net cashflow: £142 × 12 = £1,704
- Money left in the deal: £14,500
- ROI on money left in: £1,704 ÷ £14,500 = 11.8%
On top of the cash return, the investor holds an asset worth £190,000 against a £142,500 mortgage: £47,500 of equity, of which £33,000 was created by the project (£190,000 end value minus £157,000 total money in). And because 91% of the original cash came back out, most of the £157,000 is available to do it again. That recycling, not the monthly £142, is why investors run BRR.
The sensitivity test every BRR pack needs
The whole model leans on one number: the end valuation. A professional stack shows what happens when the surveyor disagrees with you:
| End valuation | 75% refinance | Money left in | Net cashflow / month | ROI on money left in |
|---|---|---|---|---|
| £190,000 (target) | £142,500 | £14,500 | £142 | 11.8% |
| £185,000 | £138,750 | £18,250 | £159 | 10.5% |
| £180,000 | £135,000 | £22,000 | £176 | 9.6% |
(Cashflow rises slightly as the valuation falls because a smaller mortgage costs less interest; the price is more cash trapped in the deal.) A £10,000 down-valuation here still leaves a working deal, which is what a resilient BRR looks like. If a £10,000 miss turned the ROI negative or trapped most of the cash, the margin was never really there.
Bridging instead of cash
Many BRR purchases use bridging finance rather than cash, especially for unmortgageable properties. The method is identical; the money-in table gains lines for the bridge: arrangement fee (commonly around 2% of the loan), monthly interest for the project period, and exit fees where they apply, while the cash deposit shrinks. Bridging makes the ROI on personal cash higher and the costs higher at the same time, so the sensitivity table matters even more. Model both routes before choosing.
What goes in the pack
If you are presenting this deal to an investor, the analysis above becomes the financial section of the pack, alongside the comparables supporting the £190,000 and the £950, the refurb schedule behind the £25,000, and the risks (down-valuation, cost overrun, the six-month rule) with mitigations. The full structure is in what goes in a property deal pack, and how to present a deal to investors covers leading with the numbers that matter: £14,500 left in, 11.8% ROI, 91% of capital recycled.
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Get started freeFrequently asked questions
What does BRR stand for in property?
Buy, refurbish, refinance. An investor buys a property needing work, renovates it to raise its value, then remortgages at the higher value to pull most of the original cash back out while keeping the property as a rental.
What LTV do BRR refinances typically use?
Standard buy-to-let remortgages at around 75% loan-to-value are the common exit. In this walkthrough, 75% of a £190,000 end value releases £142,500 against £157,000 of total project cost, leaving £14,500 in the deal.
How soon can you refinance after buying a property?
Most mainstream lenders apply a six-month rule, wanting the owner registered for around six months before a remortgage, though criteria vary by lender. BRR projects are usually modelled on at least six months of holding costs for this reason.
What happens if the property is down-valued at refinance?
A lower valuation shrinks the remortgage and traps more cash in the deal. In this example, a £10,000 down-valuation to £180,000 increases the money left in from £14,500 to £22,000 and cuts ROI from 11.8% to 9.6%. A robust BRR should survive a realistic down-valuation, which is why packs should always show a sensitivity table.
Does BRR still work with higher interest rates?
The model still works, but the margin for error is smaller: mortgage interest is the largest cost line after refinance, so rates directly compress cashflow. Deals need genuine value creation through the refurbishment, evidenced end values, and stress-testing at realistic rates rather than optimistic ones.