BRRRR Strategy 101: How to Buy, Rehab, Rent, Refinance & Repeat 🏠🦜
BRRRR Strategy 101: How to Buy, Rehab, Rent, Refinance & Repeat 🏠🦜
If you want to build long-term wealth in real estate while recycling the same money into multiple deals, the BRRRR method is your blueprint. It stands for:
Buy → Rehab → Rent → Refinance → Repeat
This guide breaks down how to execute each step the right way — with real-world insights that help you avoid common pitfalls and maximize ROI.
📅 1. Buy: Get the Numbers Right from Day One
Start with properties in working-class neighborhoods with strong rental demand. You want homes that are distressed but not destroyed.
Your goals:
Purchase at 70% of ARV minus rehab
Cash or hard/private money preferred for speed
Avoid properties needing major structural repairs (unless you're experienced)
Pro Tip: Off-market deals are your best friend here. Direct mail, wholesaler relationships, and agent networking pay off.
🛠️ 2. Rehab: Renovate for Durability & Renters
This isn’t a retail flip. Your job is to make the property clean, safe, functional, and landlord-friendly.
Focus areas:
Durable flooring (LVP over carpet)
Modern but modest kitchen/bath updates
Paint, fixtures, curb appeal
Major systems (roof, HVAC, plumbing) if needed
Pro Tip: Avoid over-improving. Think "would I want to own this as a rental?" not "would I want to live here?"
🏡 3. Rent: Lock in Cash Flow
Before refinancing, you need a tenant in place. This proves income and value to lenders.
Checklist:
Screen tenants professionally (credit, background, income)
Charge market rent (use Rentometer or local comps)
Get a signed 12-month lease
Use professional property management if you don’t want headaches
Bonus Tip: Add small income boosters like pet rent or utility reimbursements to boost NOI.
📈 4. Refinance: Pull Out Equity — Keep the Property
Now that the home is rented, it’s time to refinance based on the new appraised value.
You want:
DSCR loan or investment cash-out refinance
To pull out most (if not all) of your initial cash
A low fixed rate, interest-only or amortized loan
Lender docs you'll need:
Lease agreement
Rent roll
Rehab receipts
Appraisal
Pro Tip: DSCR (Debt-Service Coverage Ratio) loans are ideal: they qualify based on the property’s income, not your W2.
⟳ 5. Repeat: Do It Again — Faster
Once you get your cash back, you're ready to roll it into your next deal. That’s the beauty of BRRRR: you keep the asset, the tenant pays the loan, and you keep building.
Advanced Tip: As your portfolio grows, create a cash reserve and build relationships with private lenders to scale faster.
✅ Final Thoughts
The BRRRR method is powerful — but only if you execute with discipline. Know your numbers. Build the right team. And don’t refinance out more than the property can support in rent.
Done right, this method can help you go from one rental to a full portfolio using the same seed money.