Glossary

What is the BRRRR Method?

BRRRR is a real estate investing strategy that stands for Buy, Rehab, Rent, Refinance, Repeat. The goal is to purchase a distressed property, renovate it, rent it out, then do a cash-out refinance at the higher post-rehab value — recovering most or all of your initial capital to redeploy into the next deal.

How Each Step Works

B
Buy
Acquire a distressed property below market at a discount, typically using cash or a bridge loan.
R
Rehab
Renovate to raise the value to ARV.
R
Rent
Place a tenant to generate monthly cash flow.
R
Refinance
Cash-out refi at 70–75% LTV of the new ARV, pulling back most of your initial investment.
R
Repeat
Use recovered capital to fund the next acquisition.

BRRRR vs. Fix and Flip

Fix and flip: buy → rehab → sell. Profit taken as a lump sum. Capital fully recovered but asset is gone.

BRRRR: buy → rehab → rent → refi → keep. Capital mostly recovered but you retain the rental asset and ongoing cash flow.

When BRRRR Makes Sense

Works best when the after-rehab value is significantly higher than purchase + rehab costs, the rental market supports positive cash flow after the refi payment, and interest rates make the cash-out refi payment manageable.

Frequently Asked Questions

How much cash can you recover with BRRRR?
Ideally all of it. If ARV × 75% LTV covers your purchase price plus rehab costs, you've achieved a 'full cycle' BRRRR with none of your own money left in the deal.
What are the risks of BRRRR?
Rehab overruns reduce your equity. Rising interest rates increase your refi payment, cutting cash flow. Vacancy between rehab and rent costs carry money. The strategy works best with accurate ARV estimates and controlled rehab costs.
Related Terms
ARVARV CalculatorBRRRR Calculator
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