Key takeaways
- BRRRR = Buy, Rehab, Rent, Refinance, Repeat.
- The goal is to pull most of your capital back out at the refinance and redeploy it.
- It works when you buy well below the after-repair value (ARV) and the rent covers the new loan.
- The killer risk is a low appraisal that traps your cash in the deal.
The five steps
Buy a distressed property below market — often with cash or a short-term hard money loan. Rehab it to raise the value and make it rentable. Rent it to a tenant. Refinance into a long-term mortgage based on the new, higher after-repair value, pulling your capital back out. Repeat with that recovered cash.
The number that decides it: cash left in the deal
BRRRR lives or dies on how much capital the cash-out refinance returns. If the refinance loan (ARV × the lender's LTV, usually 70–75%) covers your all-in cost, you recover nearly everything and your return on the little that remains is enormous. The BRRRR calculator shows exactly how much cash stays in and the cash-on-cash return on it.
Why the ARV is everything
Every step keys off the after-repair value. Buy at the right discount to ARV, rehab to hit it, and the refinance returns your capital. Overestimate the ARV and the appraisal comes in low — the cash-out shrinks and your money is stuck. Back the ARV with real comparable sales, not optimism.
BRRRR vs. flipping
A flip sells for a one-time profit; BRRRR keeps the property as a rental and recovers capital through refinancing. If you'd rather take the cash and move on, run the deal through the cash-on-cash and cap rate tools to confirm it works as a hold first.
Frequently asked questions
What does BRRRR stand for?
Buy, Rehab, Rent, Refinance, Repeat — buy distressed, renovate, rent, refinance on the higher ARV to recover capital, then repeat.
Does BRRRR still work?
Yes, but it's harder when rates are high and ARVs uncertain — both shrink the cash you recover.
What's the biggest risk?
A low appraisal at refinance: a below-estimate ARV means a smaller cash-out and trapped capital.