Strategy
BRRRR
Buy, Rehab, Rent, Refinance, Repeat — a rental-acquisition strategy using short-term debt on the buy and long-term debt on the refinance.
Definition
BRRRR is an acronym for Buy, Rehab, Rent, Refinance, Repeat. The strategy: buy a distressed property with short-term money (cash or hard money), renovate it, rent it to a tenant, then refinance into a long-term mortgage (typically DSCR or conventional) based on the new appraised value. If executed well, the refinance returns all or most of the original capital, leaving the investor with a cash-flowing rental and capital freed up to repeat the cycle.
Example
Buy $120K + rehab $40K = $160K in. Appraise at $220K after rehab. 75% LTV refinance = $165K cash out, returning all capital. Repeat.
Related terms
DSCR Loan
A rental mortgage underwritten based on the property’s cash flow, not the borrower’s perso…
ARV (After Repair Value)
The price a property will sell for once all renovations are complete, established from rec…
Hard Money Loan
Short-term real estate financing from a private lender, based on the value of the asset ra…
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