Key takeaways
- BRRRR = Buy, Rehab, Rent, Refinance, Repeat — recycle one pile of cash across many deals.
- The whole game is how much capital the cash-out refinance returns to you.
- Refinance loan = ARV × LTV (usually 70–75%); cash left in = all-in cost − that loan.
- Aim for little/no cash left and positive cash flow after the new, larger payment.
What is the BRRRR method?
BRRRR is a real-estate strategy — Buy, Rehab, Rent, Refinance, Repeat — that recycles the same capital across deals by refinancing on a property's higher after-repair value. It lives or dies on one question: how much of your cash can you pull back out at the refinance?
Worked example
Using the defaults — buy at $150,000, $40,000 rehab, $10,000 closing/holding, a $260,000 ARV, refinanced at 75% LTV (7.5%, 30 yr), renting for $2,200 with $600 expenses:
- All-in cost: $150k + $40k + $10k = $200,000
- Refinance loan: $260,000 × 75% = $195,000
- Cash left in deal: $200,000 − $195,000 = $5,000
- New payment ≈ $1,364 → monthly cash flow ≈ $236
- Cash-on-cash on the $5,000 left in ≈ 57%
Recover nearly all your capital and even a modest cash flow yields an outsized return on what little remains — the BRRRR appeal. A lower ARV or LTV leaves more cash (and risk) in the deal.
How much can you refinance?
| Refinance type | Typical max LTV |
|---|---|
| Conventional cash-out (Fannie/Freddie) | 70% – 75% |
| DSCR / investor loan | 70% – 80% |
| Local bank / portfolio | ~75% (varies) |
Conventional investment-property cash-out refinances are generally capped near 75% LTV under Fannie Mae guidelines, and most lenders require a seasoning period before lending on the new appraised value.
Frequently asked questions
What does BRRRR stand for?
Buy, Rehab, Rent, Refinance, Repeat — buy distressed, renovate, rent, refinance on the higher ARV to recover capital, then repeat.
What's a good result?
Little or no cash left in the deal and positive monthly cash flow. Leaving some cash in is fine if the cash-on-cash return works for you.
How much can I refinance for?
Usually 70–75% of the ARV for a conventional cash-out; DSCR loans sometimes reach 80%.
What is seasoning?
The waiting period (often 6–12 months) before a lender will refinance on the new appraised value instead of your purchase price.
How does this relate to cash-on-cash?
After the refinance, your return is the cash-on-cash return on whatever capital remains in the deal.
What kills a BRRRR?
An inflated ARV. If the appraisal comes in low, the refinance returns less cash and your money stays trapped — back the ARV with real comps.