BRRRR (Buy, Rehab, Rent, Refinance, Repeat)
BRRRR is an investing strategy: buy a distressed property below market value, rehab it, rent it out, refinance based on its new value to pull your cash back out, then repeat with the same capital.
The engine of BRRRR is the cash-out refinance: lenders will typically refinance a stabilized rental at 70–75% of its appraised value. If you bought and rehabbed the property for less than that, the refinance returns most or all of your invested cash while you keep the property, its cash flow, and its equity.
The strategy depends on buying below market value — which is why BRRRR investors concentrate on off-market and distressed properties rather than MLS listings — and on the property renting well enough to meet the refinance lender's debt-service coverage requirements.
Worked example
Buy at $180,000 + $40,000 rehab = $220,000 all-in. After stabilizing at $1,900/month rent, the property appraises at $290,000. A 75% cash-out refinance returns $217,500 — nearly the full investment — while the investor keeps a cash-flowing rental with ~$72,500 of equity.
Put it to work
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