BRRRR

BRRRR — Buy, Rehab, Rent, Refinance, Repeat — is a strategy where an investor recycles the same capital into rental after rental by refinancing at the property's new value.

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat — a strategy for building a rental portfolio by recycling the same pot of capital. The investor buys a distressed property at a discount, renovates it, places a tenant, then refinances into a long-term loan based on the property's new, higher value. If the numbers work, the refinance returns most or all of the original cash, which funds the next purchase.

Run the numbers on a hypothetical: buy at $100,000, put in $30,000 of rehab — $130,000 all-in. Renovated and rented, the property appraises at $180,000. A lender refinances at 75% of that value, or $135,000, which pays off the short-term funding and returns the investor's capital, while the tenant's rent covers the new payment. The same money then buys the next house. Compare that to a standard rental purchase, where the down payment stays locked in the deal for years.

What beginners get wrong is assuming the exit before proving it. The whole strategy hinges on two numbers the market controls: the appraisal and the rent. Buy at a thin discount or overrun the rehab, and the refinance comes up short, leaving cash trapped in the deal. Lenders also impose seasoning periods before they will lend on the new value, and the refinance payment has to leave real cash flow after expenses — a BRRRR that pulls all the capital out but loses money every month is not a win.