BRRRR — Buy, Rehab, Rent, Refinance, Repeat — is the single most efficient way to scale a rental portfolio with a small amount of capital. Done right, you pull most (sometimes all) of your invested cash back out at refi and repeat.
Step 1 — Buy
Target properties that are:
- 20–30% under ARV after minimum rehab.
- In a market with strong renovated comps — no comps = no ARV = no refi.
- Rentable to the local median tenant after rehab.
Financing: bridge or hard money at 85–90% LTC + 100% of rehab, 6–12 month term. Rates 9–12%, 1.5–3 points. Fast close — often 10 days.
Step 2 — Rehab
- Get three contractor bids on a written scope of work.
- Budget 10–15% contingency. Every BRRRR blows the initial budget somewhere.
- Focus on ARV-drivers: kitchens, baths, curb appeal, HVAC, flooring. Skip anything a tenant won't notice.
- Track draws — most bridge lenders release rehab funds in 3–5 stages tied to inspection.
Time: 60–120 days. Every extra month is another 9–12% annualized carrying cost.
Step 3 — Rent
Lease to a qualified tenant with 3x rent income, 620+ credit, no evictions. Lock in a 12-month lease at market rent — this is what the refi appraiser will use.
Pro tip: fully turnkey photos, professional listing, aggressive first-week pricing. Vacancy costs more than $50/month in rent concessions.
Step 4 — Refinance
Switch to a DSCR cash-out refi:
- Season 6 months on title (some programs, 3 months).
- Refi at 75% LTV of new ARV.
- Rate ~7.5–8.5% (30-yr fixed).
The math that makes BRRRR work:
- All-in cost: $200k (purchase + rehab + carry + closing).
- ARV: $280k.
- Refi at 75% LTV = $210k loan.
- You pull $10k out and own a $280k asset that cash flows.
Miss the ARV, and you leave capital in the deal. Nail it, and you recycle 100%.
Step 5 — Repeat
Deploy the recovered capital into the next deal. A disciplined investor can BRRRR 4–8 properties a year on a single stack of capital.
Common BRRRR killers
- Weak ARV comps — the appraisal comes in low, capping your refi.
- Rate spikes during rehab — lock a rate 45 days before you expect to refi.
- Under-market lease — lender uses the lower of actual vs. market; a low lease caps your DSCR.
- Sub-seasoning — refinancing before the seasoning window forces purchase-price LTV, not ARV LTV.
Timeline
| Phase | Time |
|---|---|
| Close purchase | Day 0 |
| Rehab complete | Day 90 |
| Rent-ready + leased | Day 105 |
| Season | Days 105–180 |
| Refi close | Day 210 |
Nine months, capital recycled, one rental added to the portfolio.