BRRRR stands for buy, rehab, rent, refinance, repeat. The idea: instead of leaving a down payment locked inside each rental property you buy, you force the property's value up through renovation, then refinance to pull your original cash back out — and use the same money to buy the next one.
Buy — below market, because of condition
The strategy only works when you buy something whose price reflects its current condition, not its potential. The discount you capture at purchase is where the whole return comes from; everything after is execution.
Rehab — renovate for the appraiser and the tenant
A BRRRR renovation is not a flip renovation. You are renovating for durability and appraised value, not for a bidding war: kitchens, bathrooms, mechanicals, and whatever legally adds rentable space or units.
Rent — the step that makes the refinance possible
A signed lease at market rent is what the refinance lender wants to see. In our communities strong rental demand is the norm, but confirm the actual market rent for the block — the number your refinance depends on should come from comparable rentals, not optimism.
Refinance — where the math gets tight
The refinance lender orders an appraisal and lends a percentage of the new value — commonly around seventy-five percent. If the property appraises high enough, that loan repays your original purchase and renovation money, and your remaining cash in the deal is small or zero.
Two constraints decide everything here. First, the appraisal: if it comes in low, your cash stays stuck in the deal. Second, the rent: lenders check that rental income covers the new mortgage payment with room to spare — the debt service coverage ratio. A property that appraises beautifully but rents thin will not support the loan you wanted.
Run it before you do it
The BRRRR calculator models the whole cycle: purchase, renovation budget, holding costs, the refinance at your lender's terms including the rent coverage constraint, and your true cash left in the deal. The deep dive mode adds a scope-of-work builder, a rent roll for multi-unit buildings, and a five-scenario stress test. The deals that work on the stress test are the ones worth pursuing in person.