BRRRR

Buy, Rehab, Rent, Refinance, Repeat. The BRRRR strategy lets you build a rental portfolio by recycling capital — but only when the numbers actually work.

The Five Steps

Buy

Purchase a distressed or undervalued property below market value. The discount you create here is the engine of the whole strategy.

Rehab

Renovate to increase the property's value and make it rent-ready. The goal is to force appreciation to a level that supports a cash-out refinance.

Rent

Place a tenant to establish rental income. Lenders require seasoning — typically 6 months of rent history before they'll refinance.

Refinance

Pull out equity through a cash-out refinance based on the new appraised value. The goal is to recover most or all of your original cash invested.

Repeat

Deploy the recovered capital into your next deal and do it again.

The Math That Makes or Breaks It

The BRRRR only works if post-rehab value supports a refinance that recovers your invested capital. Here's how to think about it:

ARV (After Repair Value): $200,000

Lender refi at 75% LTV: $150,000

Purchase price: $90,000

Rehab cost: $40,000

All-in cost: $130,000

Cash recovered: $150,000 - $130,000 = $20,000 left in deal

The closer to zero cash left in the deal, the better — as long as the property cash flows. Leaving $0 in the deal means infinite return.

Funding the BRRRR

Two phases, two different funding sources:

Phase 1 — Acquisition & Rehab

Hard money or private capital. Fast, flexible, asset-based. Covers purchase and often 100% of rehab costs for strong deals.

Phase 2 — Refinance

Conventional mortgage, DSCR loan, or portfolio loan. Based on new appraised value and rental income. Typically requires 6+ months of seasoning.

When It Works Well

—Strong local rental demand
—Clear forced appreciation opportunity
—Accurate ARV estimate pre-purchase
—Reliable rehab contractor and timeline
—Lender willing to refi at target LTV

Where It Breaks Down

—ARV doesn't support target refi amount
—Rehab runs over budget
—Can't find qualified tenant quickly
—Appraisal comes in below expectation
—Refi rates higher than projected — cash flow disappears

Is BRRRR Right for You?

BRRRR is powerful, but it requires everything to go right. It works best if you:

—Have access to below-market distressed properties
—Have short-term bridge funding lined up
—Can execute rehab on time and on budget
—Are in a market with strong rental demand and appreciation
—Understand that leaving too much cash in the deal stalls your growth

I've worked through BRRRR deals from both sides. Send your numbers for a structured check on whether the refinance math is realistic.

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