The BRRRR Method Explained: Buy, Rehab, Rent, Refinance, Repeat

by Aida Nesimi

The BRRRR Method Explained: Buy, Rehab, Rent, Refinance, Repeat

Introduction

The BRRRR method—Buy, Rehab, Rent, Refinance, Repeat—has become one of the most popular strategies for building rental portfolios. It allows investors to recycle capital and acquire multiple properties with limited initial cash.

Here’s a breakdown of how it works, the pros and cons, and tips for success.

Step 1: Buy

Find undervalued or distressed properties with potential. Focus on markets with rental demand.

Step 2: Rehab

Renovate to increase property value and appeal. Target kitchens, bathrooms, and curb appeal.

Step 3: Rent

Place quality tenants to generate steady cash flow. Proper tenant screening is crucial.

Step 4: Refinance

After renovations, refinance at the higher value. Pull out most of your initial investment.

Step 5: Repeat

Use the recycled capital to acquire the next property.

Advantages of BRRRR

Scale quickly with limited funds.
Create forced appreciation through rehab.
Build long-term cash-flowing assets.

Risks of BRRRR

Overestimating ARV (After Repair Value).
Unexpected renovation costs.
Difficulty refinancing if lending standards tighten.

Real-World Example

An investor buys a property for $150,000, spends $40,000 on rehab. New appraised value: $260,000. After refinancing, they pull out $180,000—recovering most of their capital while keeping a cash-flowing asset.