Can New Construction Loans Fit Into a BRRRR Strategy?

[Kelly Schroeder]

Most of the time when we talk about BRRRR, the "Buy" step is focused on acquiring existing properties — usually distressed or undervalued homes that need some work. But I've been wondering about another angle: using new construction loans to build rentals from the ground up and then folding that into a BRRRR-style approach.

For example:

- Secure financing to build a single-family rental or small multi-unit.
- Lease it up once completed.
- Refinance to pull capital back out, then repeat.

It feels like it could be a way to create cash-flowing properties in markets where distressed inventory is limited, while still following the recycle-your-capital mindset that BRRRR is built on.

Has anyone here actually used new construction as part of their BRRRR strategy?
1. Did the numbers still work out compared to buying existing stock?
2. How did appraisals and refinancing play out with a brand-new build?
3. What challenges or advantages did you run into?

Curious to hear from folks who've tried (or considered) this twist on BRRRR.