BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. You buy a distressed property below market value, renovate it to increase value, rent it out, refinance based on the after-repair value (ARV) to pull your cash out, then repeat with the recovered capital.
- Buy: Purchase undervalued or distressed property
- Rehab: Renovate to increase value to ARV
- Rent: Place tenant to generate income
- Refinance: Cash-out refi at 75% of ARV
- Repeat: Use recovered capital for next deal
| BRRRR Step | Cash Flow | Example |
|---|---|---|
| Buy | Out: -$120K | Purchase distressed duplex |
| Rehab | Out: -$30K | Kitchen, bath, flooring, paint |
| Rent | In: +$1,800/mo | Market rent after rehab |
| Refinance | In: +$150K | 75% of $200K ARV |
| Repeat | Net: $0 left | All cash returned, keep property |