Accountant · Williamstown, NJ · Member since 2025 · 343 posts · 182 votes
Why More BRRRR Investors Are Holding Cash After the Refi Instead of Repeating Immediately
Something I’m seeing more of lately with BRRRR investors:
They complete the refi… pull some cash out… and then pause instead of jumping straight into the next deal.
That used to feel “wrong.” Now it’s becoming intentional.
Why?
Tighter lending, higher insurance, and thinner margins are making patience a strategy.
A lot of investors are realizing that immediately repeating the cycle — without reassessing numbers — can compound mistakes fast. Holding some cash after the refi gives breathing room for:
Unexpected repairs
Higher operating costs
Conservative underwriting on the next deal
BRRRR still works, but the mindset is shifting from speed to control.
In today’s environment, the repeat step isn’t about how fast you move — it’s about how clean your numbers are before you move again.
Curious — are you repeating as fast as possible, or deliberately slowing down between BRRRRs right now?
Definitely slowing down deliberately here. Speed was the name of the game when rates were at 3-4% and you could basically print money on anything you bought below 80% ARV. Now with 7% money and insurance that doubled in some markets, the math is just tighter.
The holding cash after refi approach makes sense for a few reasons beyond the ones you mentioned. One big one is having dry powder for deals that actually pencil. If you're in a market where truly good BRRRR candidates are rare right now, having cash ready lets you move fast when something comes up instead of scrambling to close out another property or stack financing.
Also there's the psychological benefit of not feeling like you're on a treadmill. When margins are thinner, the stress of always needing to deploy capital immediately after a refi can push you into deals you'd otherwise pass on.
My approach lately has been to target a specific amount of cash reserves per property before I start seriously looking for the next one. Usually 3-6 months of PITI plus a $10-15k capex cushion. Once that's covered, whatever excess comes out of the refi goes into the next deal fund.
Are you seeing more investors shift toward buying at steeper discounts to compensate, or are people mostly just accepting lower returns and longer hold periods?