BRRRR investors — are you still finding deals that pencil out in today's market?

Question

I'm curious what everyone's seeing right now:

- What markets are you buying in?

- Are you finding better opportunities on-market or off-market?

- What's been the biggest challenge lately: acquisition costs, rehab budgets, refinancing, or finding cash flow?

It seems like the BRRRR strategy is evolving as rates and property values continue to shift. I'd love to hear what's working for other investors and where you're seeing the best opportunities in 2026.

Caleb Brown · Answer

I'm in Kansas City so Midwest. On or off market, you can find deals on both but have to sift through a bunch. I've noticed with BRRRRs lately is the tradeoff between pulling cash out vs cash flow.

A few years ago, it felt easier to refinance, pull most of your capital back out, and still have solid cash flow. Today there's a choice:

Option 1: Pull most of your money out through the refinance, but the higher loan balance leaves very little monthly cash flow.

Option 2: Leave more equity in the property, resulting in stronger cash flow but less capital available for the next deal.

Dean Harris · Answer

@Kevin Lopez Welcome to BP!

I'm in Memphis TN and I am seeing three products sell here every month. I average 28.8 investment property closings every month in Memphis and here is what is selling as of the last 4 months.

1. BRRRR deals. I source these everyday and they are popular.

2. Vacant homes with little work and listed/offered under market value. There is a large pool of these available now

3. Occupied and cash flowing deals that are better than the 1% Rule.

I'm happy to send you some examples of what is for sale and what all we have purchased this year. I host a weekly podcast and recently took a dive into what is selling in our market. You can find it wherever you listen to podcast by searching The Investors Guide To Memphis Real Estate. You can watch us on YouTube and Facebook.

Best of luck to you!

Mike Klarman · Answer

Dave, I tell people the same thing.  Only refinance the minimum.  Leave equity in and inflate the cashflow.  The equity isn't going anywhere and will only grow.

The problem is that there are deals that pencil out, lots of them, but they don't play out as they penciled out.

Chasing a small margin is the fastest way to go broke.  You pencil out a deal or your calculator estimates 20k profit and you say 20k is better than nothing and then you quickly find out how fast that 20k evaporates and you are under water.

The key is sourcing.  You have to be able to source at a discount and start with built in equity.  From there, YOU need to GC the project and hold the money.  Which means you need a subs list and you need to be able to speak the trade jargon and know the rough numbers on flooring, drywall, paint, roof.  It will take time to find your go to subs, most will be flakes, thieves, or just not good at their job.

But once you source with the built in discount, and you have your go to guys you can trust, from there you're cooking with oil.  Exits are easier, cashflow higher, equity stronger.

So it is definitely approach, strategy, access, and opportunity.

Working off the MLS with an agent or through a national wholesaler and then using a GC to run it all for you = DISASTER.

Deyan Ivanov · Answer

Yeah still finding and pulling off deals in the current market. It certainly not as easy as it once was. But the market always finds a way. I echo what Caleb said. You do have to shift trough more than before,but if you are a seller of a distressed property or one that fits the BRRRR criteria you have a limited number of buyers. If it doesn't work for us i struggle to see who will be buying what you are selling if it's not priced for purpose.Two things I've noticed:-Rehab Budgets need to be higher than before-Home insurance has gone up significantly too. (I guess that is also driven by the interest rates, but I am in no position to comment on the matter)

David Graham · Answer

@Caleb Brown nailed it. The trade off is growth for cash flow. If you want both, then growth will be slower as you have wait for funds to accumulate for the new down payment.

I have found my sweet spot to be refinancing the properties to around 65%-70% LTV after repairs.  Yes, I'm leave tens of thousands on the table that I could pull out during the refinance, but the trade off is $800-$1,200 monthly cash flow per property after all expenses are paid. I'm willing to slow down my growth for a few years while I build a strong cash flow base and then snowball the growth after a few years. This not only reduces the number of properties I have to acquire to gain a strong annual cash flow, but also leaves equity in the portfolio.

Brad Sicoli · Answer

Yes! Many good BRRRR's still available here in the quad cities where you can still pull out all of your rehab costs, get max ltv and still cash flow.  Look it up and dm me if you need an agent.

Account Closed · Answer

The investors I’ve spoken with who are still succeeding with BRRRR deals seem to be focusing more on buying right than relying on future appreciation.

A few trends I’ve noticed:

• More emphasis on off-market opportunities and direct-to-seller marketing• Tighter underwriting and larger rehab contingencies• Greater focus on cash flow rather than just equity creation• Increased use of creative financing and private capital to improve deal structure

The biggest challenge appears to be finding deals with enough margin to support today’s financing costs while still meeting cash flow goals after the refinance.

For those actively doing BRRRR deals, what’s been the biggest adjustment you’ve made over the past year that’s helped keep the strategy profitable?

James Jones · Answer

Memphis is my home base, also active in North Mississippi and Arkansas. BRRRR still pencils but the margin for error is way smaller than 2-3 years ago.

Off-market wins right now. MLS deals are too thin once you factor today's rates and rehab costs. Direct mail, driving for dollars, agent relationships, and creative finance are where the real deals live.

Biggest challenge is the refi side, not acquisition. Rates compress what comes out of the property, so deals that used to BRRRR with $0 left in now leave $15-25k in. Underwrite assuming you'll leave money in the deal. Anything better is a bonus.

Strategy shift: less chasing infinite returns, more focus on long-term cash flow and equity. The deals working now are the ones that still cash flow $200+ after refi at today's rates, with conservative ARVs. Buy right, finish clean, hold long.

Section 8 demand still strong in B-areas which keeps the rental side reliable. That's what makes Memphis work for me even in this market.

Masoud Arouni · Answer

The cash-out vs. cash flow tradeoff Caleb described is real, but it usually traces back to how the deal was underwritten before acquisition, not the refi itself.

Most BRRRR investors run the purchase math and the ARV math separately. The number that actually determines whether the strategy works is the post-refi DSCR at whatever LTV you're pulling out to. If that number is below 1.0 at 75% LTV, the deal was never a BRRRR, so it was a flip you decided to rent instead.

Running the refi scenario forward from day one and what's the loan payment at stabilized value, what does rent need to cover it, what's the cash-on-cash at that point, these tells you quickly whether the deal structure actually works before you're committed to it.

The markets that still pencil aren't magic. They're just markets where the spread between acquisition cost and stabilized value is wide enough to survive today's rate environment at the refi stage.

Drew Sygit · Answer

Class A Properties: Difficult to find properties to flip.

Class B Properties: Difficult to find properties to cashflow unless investor willing to BRRRR.

Class C Properties: Easy to find, but we recommend being picky and targeting Class C+, that should gentrify to Class B within 3-5 years.

Class D Properties: Still the wild west, good luck.

BRRRR investors — are you still finding deals that pencil out in today's market?

Most Popular Reply