What is BRRRR?
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat — a real-estate investing strategy where an investor buys a distressed property cheap, renovates it, rents it out, refinances at the improved appraisal to recover most or all of the original capital, then repeats the process with the recovered capital.
BRRRR works when the refinance appraisal supports a loan large enough to repay the original purchase + rehab + carrying costs. If the spread holds, the investor ends up owning a cash-flowing rental with little to none of their original capital left in the deal.
The math depends on five numbers clearing: (1) all-in cost ≤ 75% of ARV, (2) refi appraisal supported by three sold comps in the last 90 days, (3) refi proceeds ≥ all-in cost, (4) cash flow ≥ $200/door/month after PITI + vacancy + capex + property management, (5) DSCR ≥ 1.20 at the refi rate (not today's rate).
BRRRR breaks when interest rates rise faster than rents (compressing DSCR), when comps soften (reducing refi appraisal), or when the rehab runs over budget (raising all-in cost above the refi ceiling). In those scenarios, the investor leaves equity in the deal and the recycled-capital flywheel slows or stops.
Buy $80,000, rehab $30,000, carry $5,000, closing $3,000 = $118,000 all-in. ARV $160,000. Refi at 75% LTV = $120,000 proceeds. Investor recovers all $118,000, owns the property free of original capital, collects rent.
Concepts that connect.
After Repair Value (ARV) is the projected market value of a property after all planned renovations are complete, based on recently-sold comparable properties in similar condition within a half-mile radius. It is the single most important number in any flip or BRRRR underwrite.
Debt Service Coverage Ratio (DSCR) is the ratio of a property's annual net operating income to its annual debt service. A DSCR of 1.20 means the property generates 20% more income than it needs to cover the loan payment. Most DSCR lenders require 1.10-1.25 to underwrite.
Cash-on-cash return is annual pre-tax cash flow divided by the total cash the investor put into the deal (down payment + closing + rehab + reserves). Unlike cap rate, it accounts for financing. The most useful metric for comparing leveraged investments.
Gross rent yield is annual gross rent divided by the property's purchase price (or current value), expressed as a percentage. It ignores operating expenses and is used as a quick first-pass screening metric. A 6% gross yield is roughly the floor for a viable rental in most US markets in 2026.
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