What is the BRRRR method?

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. You buy a distressed property below market value, renovate it to increase its value, rent it out, then refinance based on the new higher value to pull your cash back out. Ideally you get all your original cash back and can repeat with the next property.

What is a perfect BRRRR?

A perfect BRRRR is when you get ALL your original cash investment back (or more) at the refinance step, leaving $0 of your own money in the deal. This means you now own a cash-flowing rental property with none of your own capital tied up, and you can use that cash for the next deal.

Can you use a DSCR loan for the BRRRR refinance?

Yes! DSCR loans are ideal for the refinance step of BRRRR. They qualify based on the property's rental income rather than your personal income, so you can scale quickly. Most DSCR lenders require a minimum DSCR of 1.0-1.25 and offer up to 75-80% LTV on the after-repair value.

Free Investment Tool

BRRRR Calculator

Model the full Buy-Rehab-Rent-Refinance-Repeat cycle. See if you get all your cash back and if the deal qualifies for a DSCR loan.

Property & Rehab

Purchase Price$50,000 – $1,000,000

Rehab Budget$5,000 – $200,000

After-Repair Value (ARV)$100,000 – $1,500,000

Monthly Rent (Post-Rehab)$500 – $10,000

Rehab Duration1 mo – 24 mo

Hard Money Rate5.0% – 18.0%

Refinance & Expenses

Refinance LTV60% – 80%

Refinance Rate5.0% – 12.0%

Property Tax Rate0.1% – 3.0%

Annual Insurance$0 – $10,000

Vacancy0% – 20%

Maintenance0% – 20%

Management0% – 20%

Cash Left in Deal

$19,200

of $252,000 invested (8% trapped)

DSCR

0.93

Cash Flow

-$147/mo

Equity Captured

$80,000

Cash-on-Cash

-9.2%

BRRRR Waterfall

Step-by-step breakdown of the full cycle

BUY

Purchase + $6,000 closing

$206,000

REHAB

Renovation + $6,000 holding costs

$46,000

RENT

-$147/mo cash flow

-$147

REFINANCE

New loan at 75% LTV

$240,000

REPEAT

$19,200 still in deal

DSCR Below Minimum

Your refinanced property has a DSCR of 0.93. The property doesn't generate enough rent to cover the debt service.

Warning Indicators

⚠DSCR below 1.0 - property won't cover debt service
⚠Negative monthly cash flow after refinance

The BRRRR Strategy Explained

BRRRR (Buy, Rehab, Rent, Refinance, Repeat) is the most popular strategy on BiggerPockets, YouTube, and real estate investor communities for a reason: it lets you recycle the same capital over and over to build a rental portfolio. Instead of saving 25% down for every new property, you force equity through renovation, refinance to get your cash back, and use it for the next deal. Done right, you can scale to 5, 10, or 20+ properties with a single pool of capital.

The 5 Steps of BRRRR:

Buy (Below Market): Find a distressed property at 60-75% of its after-repair value (ARV). Use hard money, private money, or cash. The discount is where your profit margin lives — you make your money when you buy.
Rehab (Force Equity): Renovate strategically to maximize ARV. Focus on high-ROI improvements: kitchens, bathrooms, flooring, and curb appeal. Keep a detailed scope of work and budget. Typical rehab timelines are 2-4 months.
Rent (Stabilize): Place a quality tenant and collect 1-2 months of rent history. This proves the property generates income, which is critical for the refinance step. Screen tenants thoroughly — a bad tenant can torpedo your BRRRR.
Refinance (Get Your Cash Back): After the property is stabilized with a tenant, refinance into a long-term DSCR loan at 70-80% of the new ARV. The goal is to pull out all (or most) of your original cash investment. DSCR loans are ideal here because they qualify on rental income, not your W-2.
Repeat (Scale): Take the returned capital and buy the next distressed property. Each successful BRRRR adds a cash-flowing rental to your portfolio while returning your investment capital for the next deal.

Key Numbers to Watch:

Deal Entry:

✓ Purchase at 65-75% of ARV
✓ Rehab budget: 10-25% of ARV
✓ Total all-in cost under 75% of ARV
✓ Hard money rate: 10-14% (short-term)

Refinance Exit:

✓ DSCR ≥ 1.0 (ideal: ≥ 1.25)
✓ Refinance LTV: 70-80% of ARV
✓ Cash left in deal: $0 is a perfect BRRRR
✓ Monthly cash flow: ≥ $200 after refi

Pro Tip: The 75% Rule

The golden rule of BRRRR: your total all-in cost (purchase price + rehab budget + closing costs + holding costs) should not exceed 75% of the after-repair value. If you follow this rule, a 75% LTV refinance will return all your cash. For example, on a $200,000 ARV property: buy at $100,000, spend $40,000 on rehab, and $10,000 on closing/holding costs = $150,000 total. Refinance at 75% of $200,000 = $150,000 — you get everything back. Start with conservative ARV estimates and pad your rehab budget by 15-20% for surprises.

Common BRRRR Mistakes to Avoid

The biggest pitfalls: (1) Overestimating ARV — use conservative comps from the last 90 days, not aspirational numbers. (2) Underestimating rehab costs — always get 2-3 contractor bids and add a 15-20% contingency. (3) Ignoring holding costs — hard money interest, taxes, and insurance during rehab add up quickly. (4) Rushing the tenant — a bad tenant is worse than an extra month of vacancy. (5) Not running the DSCR math before buying — if the property doesn't cash flow after refinancing, it's not a BRRRR deal.

Related Investor Tools:

Deal Analyzer — Score any rental property deal A+ through F across 8 key investor metrics.
DSCR Calculator — Calculate your exact DSCR to see if the refinance qualifies for financing.
Portfolio Builder — Map your path from 1 BRRRR deal to a full rental portfolio.
Renovation ROI Calculator — Estimate which rehab projects add the most value.

Need a DSCR Loan for Your BRRRR Refinance?

We specialize in DSCR loans for BRRRR investors. No income documentation required, close in an LLC, up to 80% LTV on ARV. Most investors are approved within days — not weeks.

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