The BRRRR strategy is a repeatable way to recycle capital: Buy, Rehab, Rent, Refinance, Repeat. It’s powerful when you can force appreciation and then refinance into long-term debt.
BRRRR step-by-step
- Buy: aim for a price that leaves room for rehab + refinance.
- Rehab: focus on improvements that increase rent and appraisal value.
- Rent: stabilize with qualified tenants and documented leases.
- Refinance: move into DSCR or conventional investor debt depending on your profile.
- Repeat: standardize contractors, scopes of work, and underwriting.
Two BRRRR numbers that matter
- All-in cost (purchase + rehab + closing + holding)
- Refi proceeds (appraisal × LTV − payoff/closing)
If refi proceeds don’t cover most of your all-in cost, your BRRRR becomes “buy and hold with cash left in.” That can still be great—just plan for it.
Common failure modes
- Rehab overruns and timeline slips (carry costs explode).
- Appraisal comes in low (can’t pull cash out as expected).
- Rent underperforms pro forma (DSCR fails at desired LTV).