The BRRRR (Buy, Rehab, Rent, Refinance, Repeat) Strategy: A Primer for Investors

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Our company is a big fan of the BRRRR method real estate investment that Brandon Turner coined and BiggerPockets so helpfully made a calculator to help analyze. In this post, I wanted to give an introductory primer on how to approach this investment strategy, from beginning to the part where you repeat it over and over and over again.

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B — Buy

They say you make your money when you buy, and that’s definitely true. Although, to paraphrase Tolstoy’s opening line to Anna Karina, all good deals involve a good purchase, but each bad deal is bad in its own way.

The key to remember when buying property you intend on holding is that there isn’t a great feedback mechanism. Yes, you will get an appraisal, but you can always disagree with an appraisal and who is to say whether you or the appraiser is right? I’ve seen some absurd appraisals, and I’ve seen homeowners believe their houses are worth some absurd price (never myself, of course).

When you are flipping, you will always know how well you did because you will be able to look at what your profit or loss was after the sale. With holding properties, you can always deceive yourself into thinking the appraisal just wasn’t any good. In other words, there is a tendency for buy and hold investors to get lazy.

Related: How We Got a Million-Dollar Property Portfolio for (Almost) Free

Don’t get lazy!

The goal behind a BRRRR strategy is to pull all of the money you put into a property out when you refinance it so that you effectively bought a property for nothing, but still have 25 percent built-in equity to reduce risk. So while you may be looking for a different type of property (flippers will usually buy more expensive properties than holders), you still want to get the same equity margin.

Flippers often use the 70 percent rule as a rule of thumb. In short, the rule goes like this:

(After Repair Value X 0.7) – Repairs = Maximum Purchase Price

Most lenders will finance 75 percent the value, so you could say that holders can aim for 75 percent. We generally do this, but that’s because we have some money we can leave in the deals and are looking for volume. If that doesn’t describe you, I would argue you should stick with the 70 percent guideline for two reasons:

  1. Refinancing costs money. Most banks charge a point and there will be an appraisal, title work, and loan processing fees that eat away at your margin.
  2. Aiming for 75 percent offers no contingency. People will go over budget more often than under budget so building in a bit more of a margin is a better idea unless you are going for volume. Again, we are focused more on volume and so we aim for 75 percent, but overall, when I ran the numbers on our portfolio, our all in price came out to 80 percent.

Now, to purchase the property up front you can use cash, a hard money loan, seller financing, a private loan, etc. The upfront financing is outside the scope of this article, but what’s important to note here is that different upfront financing options will result in different acquisition and holding costs, and you need to account for those when analyzing a deal in order to hit your 70 or 75 percent goal.


R — Rehab

There are two key questions to keep in mind when rehabbing a rental:

  1. What do I need to do to make this house livable and functional?
  2. Which rehab decisions can I make that will add more value than their cost?

Unless you are doing luxury rentals, generally speaking, things like the following are not necessary and will cost much more than either the rental or property value they will produce:

  • Granite Countertops
  • Brazilian Hardwood Floors
  • High-end Stainless Steel Appliances
  • Bay Windows
  • Skylights
  • Hot Tubs
  • Chandeliers

It’s also rarely worth finishing a basement or a garage when it comes to rentals. But on the other hand, two-tone paint, refinishing hardwoods, and adding tile are very often worthwhile.

And, of course, the house needs to be in good shape and everything needs to be functional. Being a slumlord will hurt you in the long run as well as all of our industry’s reputation. We want to rent good properties, but luxury items will cost you more than get back. That being said, there are plenty of value-add rehab ideas that are great for rentals. For more on that, see here.

And as noted before, a little more attention being treated to the front of the house is important. For example compare these two pictures:

picture-1 picture-2

The only differences are window shutters, cleaning the gutters, painting the front door, and adding bark mulch. In the next two, the only difference is adding window shutters, but it’s a big one:

picture-3 picture-4

A bad first impression can sink an appraisal because appraisers are, like everyone else, human. A first impression effects them in the same way it does a prospective tenant. So make sure the front of your houses are appealing.

Related: Introducing: The BiggerPockets BRRRR Calculator!

R — Rent

Banks rarely want to refinance a property that isn’t occupied so renting usually needs to come first. I have talked about the importance of screening before, and it’s critical to screen diligently so you get tenants that will pay each month. But it’s also important on the financing side. While appraisers shouldn’t take too much into account about how clean and pleasant the tenant is, as noted above, everyone is human and such impressions can make a difference. It’s important not to forget this.

It is also worth noting that you will need to notify the tenant that you are doing an appraisal beforehand (I always recommend you request interior appraisals versus drive-bys as appraisers will be more cautious and likely downgrade your property unfairly with drive-bys). Just send out or post a note on your tenant’s door about the date and time and then give them a reminder call the day before (unless your local laws require something else in addition to that). They don’t need to be present, but you should ask them to sweep and clean up as well as to kennel any pets if they won’t be home.

R — Refinance

Not too long ago, it was extremely hard to find a bank that was willing to refinance single-family rental properties. Now, however, it has gotten much easier. Still, when looking for such banks, there are a few things that you will need to ask:

  1. Do they offer cash out or will they only pay off debt? If they won’t offer cash out, you will probably want to move on.
  2. What seasoning period do they require? A “seasoning period” is how long you have to own a property before the bank will lend on the appraised value instead of how much money you have into the property. For the BRRRR strategy to work, you need to borrow on the appraised value. These days, some banks are willing to lend on the appraised value as soon as a property has been rehabbed and rented. These are the best banks to find.

The most effective way to find such banks is to ask around. Ask any investors you know which banks they use, or you can ask here on BiggerPockets, or go to your local real estate club and ask there. If a bank is lending to another investor, there is a good chance they will lend to you, too.

Another way to find such banks that we’ve used is a bit odd, but it has been quite effective for us. First, pick a market you are investing in, for example, I would pick “Grandview, MO” (a suburb of Kansas City). Then pick your loan range, i.e. “$40,000-100,000.” Then go to a website such as ListSource or DataQuick and search for every loan made in that city and that price range in the last year or so to non-owner occupants. It will probably cost you a couple hundred dollars.

Once you have the list, go through it and pick out all the banks. Right off the bat, you know this bank is at least willing to lend to investors in the area and price point you are looking for since they’ve done it before. So there is a good chance they will do it again.

Finally, make sure to provide the lender with as much information in as clear a way as possible to 1) impress them (remember, these are human beings, not computers making decisions) and 2) help them make a decision quickly. The same should go for whatever information, if any, an appraiser requests. For more information on how to do this, see here.


R — Repeat

Rinse and repeat baby!

If you do the BRRRR strategy right, you should have a cash-flowing property for little or nothing down. If you would like to see a real life example of how we did this, you can check out this article. But overall, the BRRRR strategy is a fantastic way, and in my opinion, the best way, to build wealth in real estate.

Do you use the BRRRR strategy? Any questions about this method of investing?


Let me know your thoughts with a comment.

About Author

Andrew Syrios

Andrew Syrios is a real estate investor in Kansas City and a partner in Stewardship Properties along with his brother and father. Their company owns just over 500 units in four states.


  1. Gordon Cuffe

    The biggest challenge is finding a lender that has less than a year seasoning period. What lenders have you found in the Kansas city area that have less than a year seasoning period on refinancing to pull cash back out.?
    Have you ever run into appraisal problems at the time of refinancing? i e appraising lower than expected.
    great article by the way

  2. George Hoover

    Great article and thanks for sharing. This strategy is probably worth sharing multiple times!

    I am challenged by your 70% Rule formula of (After Repair Value – Repairs) X 0.7 = Maximum Purchase Price
    We use ARV x 70% – Repairs = MAO

    That is a big spread. Is that actually your formula or is it a typo?

  3. Bill Briscoe

    We refinanced on our first rehab as soon at it was done (used a construction loan going in), but the appraisal came in a little low so we only could borrow $97.5. (purchase was $84K plus $22K repairs). So we still have some money in it, but now after 3 years Zillow prices the property close to $145K. The loan balance in down to maybe $95k. So it is worth paying the refi costs to get $14K out? Is 75% the max banks will go to on NOO refi’s at competitive residential rates and 30 yr AM? Or can I get a HELOC or 2nd mortgage on a NOO from anyone?

    • Andrew Syrios

      Occasionally you’ll find a bank that goes to 80%, but usually it’s 75% for investment loans. I would say for just $14,000, it’s not worth refiancing unless you can get much better financing. You could consider a 2nd or what not. But I should note, that often with BRRRR, you will leave a little money in the properties.

  4. Nicholas Q.

    Great article and inspiring to keep going. I have two rental properties in Seattle. The problem I’m running into is that when I refinance to 75% LTV to pull cash out, the resulting loan payments are too high and do not cash flow. Granted I’m using a traditional 30 fixed, but still with ARMs and other loans I can’t seem to cash flow on single family properties unless I leave at least 65-70% LTV in the loan. Am I doing something wrong? Is this just a product of the hot Seattle market?

    • Andrew Syrios

      The Seattle market is probably the problem. It’s just really hard to make any sort of buy and hold property work on the coasts. You may need to leave some cash in the property or perhaps if you focused on either multifamily or properties in the suburbs that are usually a bit cheaper, you could make make it work better.

  5. joseph young

    While the strategy is getting popular, I can’t help but think what it says about the economy. I see it as multiple strategies rolled into one. Maybe making money with a single strategy is harder to do. The profit margins might getting thin.
    This strategy seems like “wholesale it to yourself” then “flip it to yourself” then “turn-key it to yourself” then leverage leverage leverage, leaving no/little equity. I am too chicken to do that. But maybe I will get brave enough to try it someday.

    • Andrew Syrios

      I would simplify it to just flipping it to yourself. My dad calls it “flipping money.” Basically, you buy under market, fix but then instead of selling it, you rent and refinance. So I think you can leave out the wholesaling and turn-keying it to yourself part. That being said, it’s easy to get lazy when you’re doing buy and hold and not getting as good a deal as you should and you really should have some money in reserves to leave in because you just can’t guarantee you will get a good enough deal to “BRRRR out” as they say.

  6. Jean Norton

    I’m doing the BRRR strategy and finding it a REAL Pain in the A$$ to refinance. I will go through your recommendations in this article, but if you find a nationwide lender that promotes this strategy, please let me know.

    The best deal I could find on my first one was 80% of my purchase price, unless I owned it for a year. The other one I have I paid all cash, but I’m using it for short term rentals – nobody will finance that – any ideas?

    I’ve got a new one coming up in Alabama – and that’s at a pretty low price, but good returns – some banks have a low-end limit. I hope you address these questions in your webinar, and here.

    • Andrew Syrios

      It’s hard to get 75% sometimes, especially with the market as hot as it is. When BRRRR works right, you don’t need any cash, but often you will need a little. Rehabs go over or appraisals don’t come back quite as good as you think. Things happen. On our properties, we’re at about 81% all in. We can stomach that so we’re pretty aggressive, but it’s good to have at least some money or source of income when starting.

      Refinancing short term rentals is a tough one. If you have several properties to refinance and most are long term rentals, I would bet a bank would let you roll that one in. Otherwise, I’m not sure.

      • xavier mc holder

        If you don’t mind could you help me understand how does an investor account for the holding cost without having any cash flow on a property? What I am asking is if you have very little cash reserved is the BRRR strategy actually viable to a new investor? During the first six months before you are required to pay the hard mony lender in full you still have to make monthly payments correct?

  7. John Murray

    My BRRR strategy works well in Portland Oregon. Never ran into a seasoning period. I do all my own work and when the property hits $50K in appreciative value I refinance. My mortgage broker is great and and never had a problem. Going to refinance 2 of my properties in October and extract $150K. October is a great time frame after the summer feeding frenzy is over. The key to success is buy at a 25-30% discount, renovate for a minimum cost , rent for maximum profit and refinance for a minimum of $50K clear. Being in a market of increasing population adds to the profit margin, especially if the population is aged 25-45 and have little or zero building skills, They will pay a premium for housing.

  8. Mike S.

    Insightful article however I admit to being a bit slow. I’m trying to determine how this strategy might be executed as it applies to me so that I might be able to better comprehend it.

    I bought a 2 unit last year for purposes of owner occupation and renting the other unit to give me some experience in real estate. I made the purchase, completed some major renovations, and now have secured a tenant for the unit I am not occupying. According to a quick evaluation from my current lender, I have roughly $200K in equity in the property, a $290k mortgage balance, and I am eligible for a HELOC, which the same lender states will allow me to finance 90% of the equity with a variable rate that I can access anytime for whatever purposes.

    So, if I want to buy another 2 or 3 unit, which would run me ~$450,000, I am seeing this HELOC strategy as gaining the CASH that will allow me to make a down-payment and execute any repairs of such an investment. Is this right?

    Assuming I execute, then it seems I am going to have a: (1) 1st mortgage ($290K), (2) HELOC (~$180K), and (3) new mortgage (~$270K). It it the assumption that the purchase plus the repairs of the new investment would deliver the promise of delivering back the ~$180K in aggregate equity (which could then be used in the future or retained) OR that the aggregate rental income would cover my new aggregate debt ? Or something else ? Sorry for the drawn out post and questions. Any and all help is appreciated.

  9. Skylar Vincent

    Hi everybody, I hate asking for value without much to offer but I’m so new I’m not sure what I can bring to the table, save for partnering on deals. I’m looking to get started using the BRRRR Method. However I live in California where it a bit hot for me to start. My question is does anyone have any recommendations as to good out of state markets to start implementing the BRRRR Method? Thanks in advance everyone!!!

  10. Paul Moore

    Great post, Andrew. What stood out to me is your comment about effectively having zero invested once your refinance. This is one of the beautiful things about real estate, and this strategy in particular.

  11. Jacob Ayers

    Great stuff, Andrew! I just completed my first BRRRR and I learned a couple important lessons:

    1. Make sure to consider the increase in both property taxes and insurance on your newly refinanced property. The lender will likely require you to insure the property for the new value. And of course, your taxes will go up eventually.

    2. LTV’s for refinances are different (lower in my experience) than purchases.

    Agree with Paul Moore that you make a great point about pulling out all of your initial capital. That’s where the real power of the BRRRR is!

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