The BRRRR Strategy
Buy, Rehab, Rent, Refinance, Repeat — a powerful method for scaling your rental portfolio by recycling capital.
What is BRRRR?
BRRRR is an investment strategy that allows you to purchase distressed properties, add value through renovation, and then refinance to pull out your initial capital. This enables you to repeat the process with the same money, building a portfolio faster.
The Five Steps
- Buy — Find a property below market value with renovation potential
- Rehab — Renovate to increase the property's value (forced appreciation)
- Rent — Place a tenant and stabilize cash flow
- Refinance — Get a new loan based on the higher after-repair value (ARV)
- Repeat — Use the cash-out funds to acquire your next property
Key Metrics to Analyze
- After Repair Value (ARV) — What the property will be worth after renovation
- Cash-out amount — How much capital you can recover at refinance
- Equity position — Your ownership stake after refinancing
- Monthly cash flow — Net income after all expenses and debt service
When BRRRR Works Best
BRRRR works best in markets where you can find properties significantly below ARV, have reliable contractors for renovation, and lenders offering cash-out refinancing at 70-80% LTV.
Common Mistakes to Avoid
- Overestimating ARV or underestimating rehab costs
- Not accounting for holding costs during renovation
- Refinancing too early before the property is stabilized
- Ignoring cash flow — don't chase equity at the expense of monthly returns