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BRRRR Strategy
Buy, Rehab, Rent, Refinance, Repeat — a strategy for recycling capital to build a rental portfolio.
Definition
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. An investor purchases a below-market property, renovates it to increase its value and rent potential, places a tenant, then does a cash-out refinance to recover most or all of the initial investment. The recovered capital is then deployed into the next deal. When executed well, BRRRR allows investors to accumulate rental properties with minimal long-term capital tied up in each deal. The strategy requires finding undervalued properties, managing renovations effectively, and ensuring the after-repair value supports a refinance at the right LTV.
How This Relates to DSCR Loans
DSCR loans are ideal for the refinance step of BRRRR because they qualify based on the property's new rental income rather than the investor's personal debt-to-income ratio.
Related Terms
Cash-Out Refinance
Replacing an existing mortgage with a larger one and taking the difference in cash.
After Repair Value (ARV)
The estimated market value of a property after planned renovations and improvements are completed.
Forced Appreciation
Increasing a property's value through deliberate improvements rather than waiting for market growth.
Value-Add
An investment strategy focused on improving a property to increase its income or value.
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