Case Study: My BRRRR (Buy, Rehab, Rent, Refinance, Repeat) Success—All In Under 75% ARV

by |

We have been investing in real estate in Kansas for just over six years now, and our strategy is the good ol’ BRRRR method (buy, rehab, rent, refinance, and repeat). So, for our method to work, we are looking for houses and small multifamily properties that fit the following criteria.

Our Property Criteria

  1. Our total cost into the property will be less than 75 percent of the ARV, allowing us to refinance out our entire investment.
  2. The property must cash flow with a fully financed 8 percent interest only loan on it (this is what we usually get from our private lenders).
    • Note: If a property doesn’t meet this qualification, we would likely flip the property.
  3. The property must be in at least an OK neighborhood. Blue collar and lower end properties are fine, but we are not looking to buy D properties as rentals. There are just too many headaches and problems.
    • Note: If a property doesn’t meet this qualification, we would consider wholesaling the property to an investor who specializes in such areas.

We seek out properties in a variety of different ways, from the MLS, to letters, to networking with wholesalers and real estate agents. This property however, was just found by scrolling through Craigslist, which we do regularly, as every once in a while, you’ll find a gem.

And luckily, this was one of those cases.

Finding the Property

While scrolling Craigslist, we came across a property located on 41st and Terrace in Kansas City, Missouri, which is near a well-to-do area called Westport, just northwest of the famous Country Club Plaza and about two miles south of downtown Kansas City.

The property was listed at only $75,000, which seemed very inexpensive for that area, so we immediately reached out to the seller and arranged a time to look at the property.

The seller actually turned out to be a wholesaler who noted he had a lot of interest in the property and wasn’t willing to come down on price. My rehab estimate came to $20,000 (that included a 20 percent contingency for unexpected expenses), which meant that my anticipated all-in price was $95,000. The nearby comparables looked as followed:

Upon closer examination, we found the properties that sold for under $100,000 were owned by investors, and the listing pictures showed that they needed work (or there were no pictures, which is a sign in and of itself). While the properties that sold for over $150,000 were noticeably nicer than our subject property, I felt the comparables easily justified a value of $140,000. My rent estimate was $1195/month.

Related: 3 Critical Keys to a Successful Refinance (for the BRRRR Strategy!)

So, let’s see how it fit with our criteria.

  1. ARV: $95,000/$140,000 = 67.9 percent
    • 67.9 percent > 75 percent
  2. Cash Flow: Assuming $4,500/year operating expenses and 10 percent vacancy:
    • Rent: $14,340 ($1195 x 12)
    • Minus
    • Vacancy: $1,434 (10 percent)
    • Operating Expenses: $4,500
    • Debt Service: $7,600 (8% interest only annualized)
    • Equals
    • $806 Profit per year 
  3. Area: According to, the crime rate in this property’s zip code is rather high (190 compared to the average in the United States of 100). But it also has a per capita income above the American average ($31,070 compared to $29,126), the neighborhood looks great visually, and it’s generally considered to be a good area. So, check.

So, this property meets all of our criteria. We made a full priced offer and promised to close quickly (10 days), which, I should note, is usually something that wholesalers want.

Financing and Due Diligence

The upfront financing on this property was rather easy. We have a number of private lenders who we’ve built relationships with over the years, and when we showed one of them the comparables for this house, he jumped at it. Remember, the stronger you can make your case that the property is a good deal, the more secure a private lender will feel in lending on it.

Unfortunately, when doing our due diligence, we found that the sewer line was broken. We discovered this by scoping the sewer lines, which is something I highly recommend doing on any older homes you have under contract. It only costs about $200, and you definitely want to know if the sewer line is shot before you rent out the property. Normally, you can use this type of information to renegotiate the purchase price. However, in this case, there was no negotiating with the seller because he had plenty of other interest.

Still, even adding an extra $5,000 to replace the line to our budget (it cost us $3,500), we would still be all in for $100,000, and that would leave us being all in for 71.4 percent of the property’s value ($100,000/$140,000), so it was still worth it.


After closing the property, I expanded the rehab into a detailed scope of work. In this case, we had one of our own crews do the work, although we’ve often had contractors bid out and do similar work as well. In this case, the main items to repair were:

  • Trim the trees in front
  • Repaint the front porch
  • Replace the porch rail
  • Paint the interior two tone
  • Refinish the hardwood floors
  • Replace the appliances
  • Carpet the back bedroom and vinyl the kitchen and bathroom
  • New countertop
  • Repair the back door and trim
  • Etc.

Refinishing the hardwood floors really brought the house to life, as you can see:

And since it was a home in a nicer area, we went with stainless steel appliances, which were a huge improvement on what was there:

Unexpected Problems

We ran into a second unexpected problem as we got into the rehab. We were hoping to salvage the patio door in the back room, but it had too much damage and the area had a significant amount of dry rot that I had missed on my initial inspection. And patio doors aren’t cheap, unfortunately.

So, we had to repair a good amount of the trim and subfloor and install a new door. Remember, the best laid plans are just plans, and in any rehab that is decent in size, there will almost always be unforeseen issues. This is why it’s important to put a contingency in your budget.

Still, it looked a lot better when it was finished:

Still, despite the fact that we had some unforeseen issues, we still came in under our revised budget ($25,000 with the sewer line) when all was said and done:

(Note: the wholesaler’s fee was $10,000, and the closing costs and an internal “capital management fee” for my time were the remainder of the intangible costs that brought our all-in price over $100,000.)

Related: How I Bought a Fixer-Upper Fourplex for $1 Down: A BRRRR Case Study

Renting the Property

We actually considered doing something fairly unusual and creative with this property by renting it out to a friend of ours who has multiple rentals that he rents out on a short term basis with AirBnB. Generally, he makes a killing on the rentals he already has.

The arrangement would have been something along the lines of a base rent plus a percentage of the profits. This could have worked because the property is relatively close to the Country Club Plaza, where many hotels are located.

In the end, we decided against it, given how much of an anomaly it would have been in our portfolio, and simply rented it out on a normal year-long lease. Given the area has a high rental demand, it wasn’t hard to find someone. Still, we declined a few applications with spotty credit, as it’s better to have a property sit vacant than to get the wrong tenants.


Our strategy is to bundle several properties together into small portfolios and bring them to various local banks to refinance out the private loan or the cash we have into the property. This gets us long-term financing and allows us to take advantage of principal pay down while reusing that private loan on a new property. This property is next on deck and shouldn’t be a problem, as it’s in good shape and in a good area.

Some banks, particularly a few years ago when the market was softer, wanted a seasoning period (usually one year) before they would refinance a property based on its appraised value and not just the cost you had into the property. Since our cost into the property, including closing costs, was only $104,000, we could only borrow $78,000 if the bank lent on just our costs. That’s barely 50 percent of the value! So make sure the bank lending to you is willing to go off of the appraised value.

In this case, we should be able to close the loan on this one in the next few months, successfully BRRRR-ing out, as they say. And anytime you can BRRRR out with no cash left in the property, well, that’s a deal worth celebrating.

Any questions about this deal? How have your recent BRRRR deals compared?

Let me know your thoughts with a comment!

About Author

Andrew Syrios

Andrew Syrios has been investing in real estate for over a decade and is a partner with Stewardship Investments, LLC along with his brother Phillip and father Bill. Stewardship Investments focuses on the BRRRR strategy—buying, rehabbing and renting out houses and apartments throughout the Kansas City area. Today, they have over 300 properties and just under 500 units. Stewardship Properties on the whole has just under 1,000 units in six states. Andrew received a Bachelor's degree in Business Administration from the University of Oregon with honors and his Masters in Entrepreneurial Real Estate from the University of Missouri in Kansas City. He has also obtained his CCIM designation (Certified Commercial Investment Member). Andrew has been a writer for BiggerPockets on real estate and business management since 2015. He has also contributed to Think Realty Magazine, REI Club, Elite Daily, Thought Catalog, The Data Driven Investor and Alley Watch.


  1. Laura H.

    Wow – this is awesome, Andrew! I’m also in the KC area. Really appreciate the breakdown of all the numbers. Makes it look so easy – ha!

    I’ve been shying away from KCMO. Aren’t there some extra hoops to jump through for landlords there? Are you managing yourself or do you use a management company?

    • Andrew Syrios

      Thank you Laura. Kansas City, KS at least had biannual inspections (I think they may have gotten rid of those, but don’t quote me on that) and Independence, MO just added city inspections although it’s being challenged in court. Those are hassles, but just in those two cities. Kansas City, MO and the other cities in the KC metro area don’t. Jackson county is relatively landlord friendly too, although the eviction process is really slow mostly because I think the courts are backed up. I don’t think KC has an especially large number of hoops for landlords to jump through. We do manage our own stuff though.

  2. Gordon Cuffe

    i love the detail and pictures. I think many new investors read about this BRRR method and think that it is easy to find a lender that will lend based on the new appraised value when the investor has owned it less than a year. I have only heard of one bank that lent on the new appraised value when owned less than one year. Your situation is proof that you could not get a new appraised value for your lender to get all the cash back out. I have never found a bank or lender that used a new appraised value when the property was owned less than a year in CA.
    Where are the lenders that give the new appraised value when owned less than a year??

  3. Erik Whiting

    Interesting story. I appreciate you taking time to write it and share real numbers.

    A few questions: I’ve used 50% as a rule of thumb to cover operating expenses and vacancy. Your OE and vacancy totals 41%. Are those typical numbers or do you go lower due to rehab being less expensive? Also, do you pay a manager or yourself for property management?

    Are CapEx/set asides included in your figures?

    $800 profit for a year’s rent seems a bit thin. Do your numbers look better after you refi out of the private lender into long-term bank financing? Or is your strategy to basically break even and sell after appreciation?

    Thanks again for writing.

    • Andrew Syrios

      $800 is a bit thin, but remember that’s fully financed with an 8% loan and relatively conservative expenses (we estimate with a management fee even though we self-manage). It gets a bit better when we refinance with a bank plus we add all the principal paydown. We usually aim for at least $50 cash flow per month for apartment units, although we prefer to be above $75 and at least $75 for houses though we prefer to be above $100/month. And all that is fully financed at 8%. Still, in nicer areas with a hotter market, it’s tough.

  4. Anthony Sandvig

    Thanks for sharing this experience! I’m looking at getting my own start in investing here in the Denver / CO front range area, using the BRRRR strategy. I really appreciate the level of detail you went into with this case study.

    One question I have (if you don’t mind sharing) is what sort of private money terms did you get for the initial purchase…mainly the duration of the loan? I ask because a lot of what I’ve seen (so far) is shorter than the 1 year period you needed for the refinancing.

    • Hunter Chen

      I don’t think that’s unrealistic. I’m still pretty new, but the 3 properties I’ve BRRR with all have over $250/month taking into account vacancy, management, and cap ex. This was possible mostly because I do the work myself, and the turnaround is in the ballpark of 3 months for each property. That does tie up a lot of cash for an extended period of time however…

  5. aaron cullen

    Hi Andrew – Could you expand a little bit about the third “R” Refinance. To me that’s a big part of the pie and having that in place as an exit is absolutely key so your not paying big interest only loans. I’m always curious how other investors are solving this.

    Thanks for posting a great article, love it when people give numbers!

  6. Nathan G.

    I don’t have a lot of time to crunch your numbers but it appears you are $104,000 into this and cash-flowing $800 a year (assuming you have it rented). Is that right? In other words, if you tried to cash out your equity (assuming it appraises for the value you expect) you would be carrying a larger mortgage and cash-flowing even less.

    $800 a year is too thin of a margin. A 5% drop in rent rates could put you in the negative. Just a few houses like this and a downturn in the market could break you and cause you to lose everything. Even one bad tenant could eat up 3 – 5 years worth of profit without batting an eye.

    I would recommend selling selling this property ASAP to cash out and invest in something that provides a better return.

    • Erin N.

      That was my thought as well. I wouldn’t do a deal unless I cleared $250/door monthly at least with worst case scenario rents. I have a hard time understanding the rationale behind doing a deal like this. There are a lot of ways to more easily pocket an extra $800/year.

      • Andrew Syrios

        The property has $35,000+ in equity and we won’t have a penny in it when it’s done. The BRRRR strategy isn’t so much about cash flow. Yes, that’s part of it, but but real estate makes you wealthy with a combination of appreciation and principal paydown. Cash flow just keeps you afloat. With this deal we have a sizeable amount of equity right off the bat that will grow with time and we didn’t have to put any money into it in order to acquire it. The $800/year (which I estimated with conservative numbers, I should note) is just a small bonus.

    • Andrew Syrios

      The $800 assumes a 10% vacancy factor as well as an estimate for recurring capital expenses and a management fee even though we self-manage. I probably should have made that more clear. This property is in a good area, about as good as we invest in. We try to have a range of properties, from those in nice areas with more appreciation potential, but lower cash flow to those in lower end areas that are more difficult to manage but have a higher cash flow.

  7. John Murray

    This may surprise you. Here in Portland Oregon I started BRRR about 2 years ago. I own 7 rental properties (single family) and I’m a journey tradesman. I invested about $500K and the numbers are, positive cash from rental profit $65K. Refinanced first 3 and cleared $152K from all 3. Deprecation per year about $27K. Other closing write offs about $20K . I don’t pay much in taxes.

  8. David Grabiner

    When you refinance will you be getting a 30 yr term or a 20 year term? If you refinance 104K at 4.7% 20 year term your mortgage will be $8031 per year meaning your cash flow will actually go down to $375 per year when you refinance. So this deal has a very small cash flow cushion indeed. If this is property is not ment to make cash flow then what is the exit strategy to get the equity?

    • Dustin Lavender

      Basically, andsomeone correct me if i am wrong, he is all in on this house for $89,000. He doesn’t care if it cash flows because he is going to refinance it at 140,000 and walk away with the $50k cash in his pocket and the rent just pays the mortgage.

      • David Grabiner

        He stated at the end of his article that his costs including closing costs was 104K. When he refinances based on an appraisal of 140K he will be able to get a 75% LTV mortgage meaning that he will be able to pay off the 104K but he doesn’t walk away with any money in his pocket. The 36K remaining will sit as equity in the house, that is why I asked what his plan was to access this money in the future? Equity looks great on the balance sheet but a housing bubble, a market correction, or a down turn in the economy can wipe it away very quickly.

      • Nathan Mansur

        I think in this case Andrew put all of his own cash into the property so he would be recouping his money plus extra. This means he obtained the property and principle pay-down through the refi-cash out plus remaining equity with a net capital expense of $0. This is the compounding effect of BRRR. One could theoretically do this strategy without exhausting cash reserves indefinitely, so long as the deals meet the criteria.

  9. Dan Heuschele

    >67.9 percent > 75 percent

    I know what you wanted to convey but mathematically this is incorrect. Your intent was to show that 67.9% was better than 75% but it is of course not greater.

    I agree with many of the comments that $800/year profit seems tight. I have never purchased a property with this low expected cash flow but I would purchase this property if I were local to the area. Your numbers are conservative and appear to be conservative with respect to cap expense – this demonstrates experience. You will have ~$30K equity without any money invested (all cashed out). To go negative equity would require a >25% market decline. You will likely have better cash flow than the conservative numbers used but being an experienced investor you use conservative numbers. You will have some equity pay down. You may end up with some appreciation (rent and property) but being an experienced investor are not counting on it. All with no money in after the refinance.

    I would never choose to manage a property for $800/year as the only profit, you have the initial $30K equity and the equity pay down and likely better cash flow than the $800 but if it ends up being only $800/year you would be fine. The $30K equity and how conservative the numbers are would be why I would purchase this property.

    Good post and good purchase.

  10. David Grabiner

    Hi Andrew we are still waiting to find out what your refinance terms will look like after all that is the 3rd R in the BRRRR so it would be helpful since this is a BRRRR case study. Additionally what is your long term plan to realize the equity in the property?

    • Andrew Syrios

      It depends on whether we get a 20 year or 25 year loan (which depends on which bank we use). The rate will probably be 5%. If it’s a 20 year loan, the payments will be almost exactly the same as our interest only loan, but we’ll be paying off about $3000 of principal a year, and that number will go up. If we get the 25 year loan, our debt service will drop to just under $7000/year but there will obviously be less principal paydown.

    • Andrew Syrios

      If you can “BRRRR out with no cash left in the property” that means that you have refinanced out your entire cost of acquisition and rehab. Since most investor loans are 75%, that means you have a property with no money in it and also at least a 25% equity cushion. For example:

      All in for $75,000
      Appraisal: $100,000
      Loan: $75,000
      Money left in Property: $0
      Equity: $25,000

      $25,000 in free equity and a cash flowing property is a deal worth celebrating.

      • Daniel Mina

        Thanks for this post. When you put it like that it BRRR makes more sense. So after this deal you make money through the cashflow (although it’s estimated to be a little) and any appreciation benefitting you if you sell. If the market takes a downturn, you don’t worry until the market takes a 25% drop (-$25,000) in which case the property would be at a $75,000 value which is where you’d break even with the current loan (of course this doesn’t take into account principal on the loan which is being paid off by the income/rent). Ideally you’d want to be at a place where the loan is paid off then it’s almost like you have little to worry about, and just a purely cash flowing asset with maintenance costs. I think I get it….

        • Andrew Syrios

          That basically sums it up. The cash flow often isn’t that good, but you’re paying down principal and have an equity cushion in the property right away that massively reduces risk. Real estate investment is a get-rich-slow scheme and after a while, enough of these will really add up.

    • Andrew Syrios

      We actually got it rented at $1295/month, so the cash flow is quite a bit better. If it’s negative cash flow, you probably should sell unless you believe the property is in an area with great appreciation potential (and you’re not bleeding much with other properties that can overcome the loss).

Leave A Reply

Pair a profile with your post!

Create a Free Account


Log In Here