BRRRR Strategy Guide
What is BRRRR?
BRRRR is a real estate investment strategy that allows you to recycle your capital:
- Buy - Purchase a distressed property below market value
- Rehab - Renovate to force appreciation
- Rent - Lease to a tenant at market rates
- Refinance - Cash-out refinance based on new ARV
- Repeat - Use proceeds for your next deal
The Goal: Infinite Returns
The ideal BRRRR leaves $0 in the deal after refinancing, meaning:
- You get all your cash back
- You still own a cash-flowing property
- Your return is technically infinite (cash flow ÷ $0 invested)
Key Success Factors
- Buy deep enough - Purchase + rehab should be ≤75% of ARV
- Accurate ARV - Don't overestimate post-rehab value
- Control rehab costs - Overruns kill the BRRRR math
- Season the property - Some lenders require 6-12 months before refi
- Cash flow after refi - Higher loan = higher payment, so margins matter
Common BRRRR Mistakes
- Overestimating ARV (get multiple comps)
- Underestimating rehab costs (always add 10-20% buffer)
- Forgetting holding costs during rehab
- Not verifying lender will do cash-out refi
- Negative cash flow after refinancing