Help with the BRRRR method

[Nick Larson]

Hi everyone, I'm a newly licensed agent looking to network and learn from as many people as I can. My goal is to have a portfolio of hundreds of properties and the BRRRR method seem like a great way of doing it. Can someone state what some of the most important pros and cons are for getting into this investment method.

Also, I'm looking for a couple real estate coaches that I can learn from in the San Diego area who are experienced using the BRRRR method.

Thank you!

[Ryan Spath]

Welcome to BiggerPockets and the exciting world of real estate investing!
You’re in the right place — and the best thing you can do early on is read, read, read. There are tons of great books out there, and a fantastic place to start is with David Greene’s books in the BiggerPockets library.

Another excellent resource is Nate Barger, who runs the BRRRR Academy and an active Facebook group. Even if you don't follow the BRRRR strategy, the community alone is incredibly supportive and knowledgeable.

Get plugged in locally — attend real estate meetups, go to conferences, and surround yourself with others who are doing what you want to do. You’ll learn more from real conversations and real deals than anything else.

Finally, the most important advice: Take action.
It’s easy to get stuck in analysis paralysis, always waiting for the perfect deal. But real success comes from getting on base consistently. If you treat each deal like a base hit rather than swinging for a home run every time, you’ll look back in 10 years and be amazed at what you’ve built.

Don’t wait for perfect. Get in the game.

✅ Pros of the BRRRR Method

1. Build Equity Fast

By buying distressed or undervalued properties, improving them, and refinancing based on the new value, you can rapidly grow your equity position.

2. Recycle Capital

The key advantage: you can pull most or all of your initial investment back out during the refinance. This allows you to reinvest the same money into new deals — effectively “recycling” your capital.

3. Cash Flow Potential

If done right, the property can still cash flow after refinance. You own a rehabbed asset, with tenants covering the mortgage and expenses.

4. Long-Term Wealth Creation

You end up with appreciating assets, growing rent income, and tax advantages (depreciation, mortgage interest deductions, etc.).

5. Tax Benefits

Cost segregation, depreciation, and mortgage interest deductions can all improve your annual tax situation.

❌ Cons of the BRRRR Method

1. Financing Can Be Tricky

You'll likely need two types of loans:

• Short-term/hard money or cash for the purchase and rehab
• A long-term loan for the refinance (seasoning period may apply)

2. Risk of Overestimating ARV

If your after-repair value (ARV) comes in lower than expected, you may not be able to pull out as much capital — or any — during the refi.

3. Vacancy & Rent Risk

You need to find reliable tenants quickly post-rehab. If you can’t rent it at the price you expected, your cash flow suffers.

4. Rehab Challenges

Construction often runs over budget and over time. If you’re not experienced or managing contractors well, costs can spiral.

5. Refi Restrictions

Lenders may impose a seasoning period or require a certain level of occupancy or cash reserves.

6. Market Sensitivity

If the market shifts during your rehab or refinance window (e.g., rates go up further, values drop), your numbers may no longer work.