Case Study: One of My Best BRRRR (Buy, Rehab, Rent, Refinance, Repeat) Deals Ever

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In my previous article, I discussed a very good BRRRR (buy, rehab, rent, refinance, repeat) deal. This article will give another example when everything goes right. Indeed, pound for pound, this deal is one of our best deals ever, if not the best. Next week, I’ll discuss a deal that went sideways and what you can learn from it.

First thing, I noted our property criteria, which I will reprint here:

  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.

Some people in the comments were surprised we took so little in cash flow (about $800/year)—although I should note that is with very conservative assumptions and factors in a management fee even though we self-manage.

For most investors, a house with $35,000 to $40,000 equity that only cash flows a little would be worth flipping, at least generally. However, we are looking for long term principal pay-down and appreciation and have the resources to hold just about anything we buy without hindering further acquisition.

In addition, properties in better neighborhoods generally have a better appreciation potential, are less risky, and involve less hassle. So we try to buy a mix of the properties and hold them. We have split them out into three classes, which we refer to as follows:

  1. Equity Deal: These are properties, such as the property on Terrace in last week’s article, that are in good areas with low crime and good schools. I’m not talking about A+ areas or luxury housing or even anything close to that. That type of product is not something we’re looking for. But these properties will generally have lower cash flow, but higher potential equity margins and appreciation potential:
    • We are looking for approximately 1.2% rent to cost on these deals.
    • We are looking for approximately $75+ positive cash flow per month with 100 percent financing at 8% interest.
  2. Value Deal: These are properties in the middle. Generally lower middle class or working class areas that are solid, but come with some crime and not the best of schools.
    • Approximately 1.5% rent-to-cost ratio.
    • Approximately $125+ positive cash flow per month with 100% financing at 8% interest.
  3. Cash Flow Deal: These are lower end properties that I would not recommend a newbie try to manage. They come with more risk, and it’s much easier to rehab the equity out of these properties because they are very cheap. But there is also more reward as the rent to cost ratios and cash flow are quite high.
    • Approximately 2% rent-to-cost ratio.
    • Approximately $200/month with 100 percent% at 8% interest.

Of course, what each person considers an Equity/Value/Cash Flow play is different. But for us in Kansas City, the price ranges are about as follows:

  • Equity: $100,000+
  • Value: $60-99,000
  • Cash Flow: <$60,000

This deal was just on the edge between and equity and value deal.

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Finding the Deal

This property was simply sitting around on the MLS for anyone to find. Banks, particularly Fannie, Freddie and HUD will sometimes wildly miss-list a property. Usually it will create a feeding frenzy with a highest and best situation, but sometimes, these properties go under the radar.

Great deals going under the radar was something that happened much more often back in the days of Great Recession, but it still happens from time to time today. Our strategy with the MLS is to look at large numbers of properties in one “property tour” and make offers on any were interested in. Usually, it’s something like 10 to 12 each time. Sometimes we make low balls; sometimes it’s a highest and best on a mis-listed property.

This time, for some reason, we were the only one’s offering. In fact, the property was listed at $39,900, and we only offered $28,250. I had just moved out to Kansas City a year ago and mistook the area for being worse than it was. By the time I realized my mistake and decide to raise our offer, the bank had already accepted our original one. Sometimes mistakes work out pretty well.

Evaluating the Property

The subject property was on Harrison Ave in South Kansas City, MO and was a 3-bed, 1.5-bath raised ranch. Here is the exterior:

There weren’t too many sold comps in the area, but they were all nearby so they were at least quality comps:

It’s important to remember when evaluating comparables that you want to compare your property with properties like what it will become AFTER you’ve completed the rehab. So usually foreclosures and fixers aren’t good comps.

Both Colony Place and the house on Lydia that sold for $70,000 were foreclosures. And the pictures on the listing for Shepards Drive made it clear the property needed a bit of work. While the rest of the properties were bigger than ours, I was confident that Harrison was worth at least $100,000.

Rent comps came in around $1000/month. This is from,

Financing and Due Diligence

Financing on this one wasn’t very hard. After showing the first private lender the comps, she knew it was a safe deal and we got the financing for the purchase and rehab very quickly. Remember, a great deal will make the financing much, much easier.

This deal looked so good it almost seemed like due diligence was unnecessary. You should always ignore such a feeling. Do thorough due diligence no matter what and play devil’s advocate with yourself. You don’t want to get paranoid, but you do want to ask yourself what you might be missing. There are deals we’ve gotten under contract we thought were great but weren’t. For example, one had a shot septic tank in the back and needed to be hooked up to the city sewer, which, with fees, would cost over $10,000. That’s not something you want to miss.

Luckily, on this deal, there was nothing out of the ordinary.


Surprisingly for such a cheap property, it didn’t need much work. Here were the major items:

  • Epoxy cracks on garage wall
  • Put french drain in backyard (to help with drainage from hill behind house)
  • Trim trees in front
  • Paint interior two tone
  • Vinyl kitchen and half bath
  • Appliances
  • Punch out items and knick knacks

Overall, I budgeted $12,500, and the rehab came in pretty close at $14,895. Here is how the house looked afterward:

And here is our current balance sheet:


Banks have really loosened up over the last two or three years, but it was extremely tough at first to find a lender. Even rehabbed and rented with a tenant paying $1,070/month, it took us almost two years. Luckily, it cash flowed well even with a 9 percent loan because we got the property so cheap.

Nowadays, it rarely takes us more than six months to refinance. But then again, the properties are much more expensive than they used to be. As an aside, for help getting a lender on the back end to say yes, see this article.

The property ended up appraising for $106,000, and so we were actually able to pull out about $30,000 upon refinance! In total, our equity was about $63,000.

Here’s how it worked out on our three criteria:

  1. ARV: $43,000/$106,000 = 40.56%
    • 40.56% beats 75% easily
  2. Cash Flow:
    • Rent: $12,840 ($1070/month)
    • Vacancy: $1284 (10%)
    • Expenses: $4000/year
    • Debt Service: $3686/year ($43,000 at 9% interest only)
    • Cash Flow = $3,686/year or $307/month which is easily above our criteria.
      • Upon refinancing, our cash flow is cut to about $1500 per year, but that’s after pulling a good deal of money out.
  3. Area: The zip code isn’t great, but by evaluating the subdivision both by driving around, evaluating nearby comps and using the map feature on, we were able to determine it was a decent area. The map feature on allows you to get data, such as median household income, by subdivision. In this case, it is a solid $47,950.

Now that is a successful BRRRR deal if there ever was one!

So overall this property was one of our best deals ever and an example of how great a BRRRR deal can be when everything goes right. Next week, I’ll discuss what happens when a deal goes sideways along with how to get through it and preferably, how to avoid it altogether.

What’s the best deal you’ve ever encountered? What do you think of this BRRRR property?

Leave your questions and comments below!

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. Nice Article Andrew,

    I like everything you did and do much the same thing here in my south Chicago metro area. I have no problem getting my small community bank to finance my deals if I put 25% or more down. I can’t find any lenders that will perform cash out refinances since the crash. So, I have a bunch of equity in a bunch of houses, which is nice. Since my LTV is pretty low, I have real nice cash flow. But I would like to refi a couple of my houses to raise more cash. I don’t want to pay 8% or 9% interest on long term rental property. Any one have any ideas or lenders? My wife and I are maxed out in terms of number of loans. The small bank we use keeps our loans in their own portfolio. The killer is the the down payment and the “sunk” equity. Thanks!

    • Andrew Syrios

      Yes we do that as well. For example, in Kansas City the area where the old Bannister mall, which has been abandoned for over a decade is in the middle of being completely redeveloped into a massive complex for Cerner in what will be the largest office development in KC history. The overall area is pretty low end (a cash flow area, not a war zone), but we are trying to buy a lot there because of the potential for the area to be revitalized. So yes, economic development and area trends are part of the strategy as well.

  2. Michelle Moore


    Have you asked about opening a commercial line of credit? That is how we access our equity without refinancing properties. We typically put 3 houses on the line of credit at a time, fix them up, then get a mortgage for the maximum on two or them, leaving the 3rd house with no mortgage. This allows us to access equity for purchases and also gives us that third house that we can sell or finance for cash if we want money in hand. Also, there is little oversight for taking advances from the line of credit for fix-up costs. If I wanted to take out extra to compensate myself for the work, I could do that as long as the properties have enough equity at the end to support the new loans. For some reason, the bank doesn’t seem to consider it a “cash out refinance” when the cash is used to pay-off my line of credit – even if the line of credit gave me some cash prior to the refinance.

    This is with a small local bank that keeps our loans in house, so it might be something your bank could do also. (Prior to Dodd-Franke, it was an unsecured line of credit. Now, it has to have appraisals and be secured by properties with equity.)

  3. David duCille

    Damn, maybe i need to be investing in KC! Tampa doesn’t have deals like that anymore but luckily I scored a few good ones.

    My first investment ever, 3 bed 1 bath double lot in a solid neighborhood. paid 92,500 bought with conventional mortgage with 20% down. Spent 5 k to renovate it which was just new appliances, a few new windows, a backsplash in the kitchen, paint and some yard cleanup. 1 year later it appraised for 138,500 so we were able to pull out 40k and put it towards the next investment. This property rented for 1295/month year 1 with a mortgage payment of 593 so its a cash cow and got a ton of appreciation. After refinancing it the mortgage payment went up to about 750 so still plenty of cash flow. Fast forward 3 years, the property is probably worth 160k now if I were to sell it as we just have no inventory in Tampa and tons of people moving here. It’s also now rented for $1395 and these tenants are great

  4. Chris Troutner

    Thanks Andrew. This is one of the best articles on BRRRR that I have ever read. Well written and clearly structured. I learned more from this article than some books I have read. It will definitely help me to stick to criteria that I have let slide in past deals.

  5. Jeremy Geyer

    Awesome article, we are definitely pursuing this strategy hard here in Pensacola. Question about business structure, are you putting your own name or a disregarded LLC on the deed when you buy? Or something else? I don’t want to own many more rentals in my own name, but I’ve heard horror stories about getting refi’s on SFR rentals for an LLC. How do you get around this? Thanks in advance.

    • Andrew Syrios

      We have everything in an LLC. Most banks will lend to an LLC. The loans you can’t get are the Fannie Mae loans where each individual can get up to 10. You may want to consider getting those in your own name, but remember, it’s not hard to transfer something out of an LLC.

      • Marylin OShea

        Hi Andrew, I am interested in learning more about your process for finding/choosing a private lender. Do people come forward on their own to invest in your portfolio? And do you have a minimum $ amount?

        Great job, keep up the good work!

    • Andrew Syrios

      When it comes to private lenders, it varies quite a bit. Our terms were 9% interest only with no points. We’re now doing 8%, but that’s because we have more lenders than properties now. I think you can generally get terms like that, but you won’t get them from professional (i.e. hard money) lenders. You have to find those people with money in a CD or something like that.

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