BRRRR Strategy Explained: A Beginner's Guide

The BRRRR strategy is one of the most powerful wealth-building methods in real estate investing. It stands for Buy, Rehab, Rent, Refinance, Repeat – a cycle that allows investors to recycle their capital and scale their portfolio faster than traditional buy-and-hold methods.

What is the BRRRR Strategy?

The BRRRR method involves five key steps:

1. Buy

Find a property below market value. This could be a distressed property, a foreclosure, or simply a motivated seller. The key is buying at a discount that leaves room for profit after renovations.

2. Rehab

Renovate the property to increase its value. Focus on improvements that add the most value per dollar spent – kitchens, bathrooms, flooring, and curb appeal typically offer the best returns.

3. Rent

Once renovated, find quality tenants and establish stable cash flow. This step is crucial because lenders will look at rental income when you refinance.

4. Refinance

After the property has been rented for a period (typically 6-12 months), refinance based on the new, higher appraised value. Ideally, you'll pull out most or all of your initial investment.

5. Repeat

Use the refinanced capital to purchase your next property and repeat the process.

Why BRRRR Works

The magic of BRRRR is that it allows you to:

• Recycle your capital – Instead of leaving money tied up in each property, you extract it to buy more
• Build equity through forced appreciation – Your renovations add value beyond what you spend
• Create cash flow – Each property generates monthly income
• Scale faster – By recycling capital, you can acquire more properties with the same initial investment

Key Considerations

• Conservative ARV estimates – Always be realistic about After Repair Value
• Accurate rehab budgets – Build in a 10-20% contingency
• Refinance requirements – Understand your lender's seasoning period and LTV requirements
• Cash reserves – Keep reserves for vacancies and unexpected repairs

Getting Started

Ready to analyze your first BRRRR deal? Use our BRRRR Calculator to run the numbers and see if a property fits the BRRRR criteria.