How much money do you need to start BRRRR?

Enough to cover the part of the purchase a short-term lender will not fund, plus the rehab, closing costs, points, interest and holding costs. On a $150,000 purchase with $40,000 of rehab and a 90% hard money loan, that is about $70,000.

Hard money lenders typically fund 85 to 90% of the purchase. On $150,000 at 90%, you bring $15,000. Add about $3,000 in closing costs, $2,700 in points, and the $40,000 rehab, which most investors pay as work is completed.

Interest on $135,000 at 11% is about $1,240 a month, and taxes, insurance and utilities on an empty house add $300 to $500. Over six months that is roughly $10,000 more. Keep a 10 to 15% rehab contingency on top. Cheaper markets scale this down to $30,000 or so. Most of it returns at the refinance if the deal was bought right.