BRRRR Method (Real Estate Investing)

BRRRR is a real estate investing strategy: buy a property below its finished value, rehab it, rent it, refinance on the new appraised value to recover the cash, and repeat with the next property. It is the buy-and-hold version of flipping, keeping the property instead of selling it.

The method works when purchase plus rehab plus soft costs come in at or below what a refinance lender will advance, typically 70 to 75% of after-repair value. On a $300,000 purchase with $60,000 of rehab and a $500,000 appraisal, a 75% refinance returns about $94,000 of the $121,000 invested and leaves a rental with $125,000 of equity.

Wikipedia treats BRRR under its real estate investing article and credits BiggerPockets with popularizing the term. The strategy is older than the acronym; investors have bought, improved and refinanced rentals for decades. What the acronym added was a repeatable checklist and a large community trading numbers on it.

Brrr is the common three-R spelling of brrrr, and it means the same strategy: buy, rehab, rent, refinance, repeat. The missing r is repeat, the step that recycles the same cash into the next property. Searching brrr, brrrr or buy rehab rent refinance repeat lands on this one method.

The four r steps after buy are rehab, rent, refinance and repeat, so the acronym carries five letters even when people type three. On a $500,000 arv deal, a 75% refinance lends $375,000, which pays off the short-term loan and returns most of the cash invested. Wikipedia treats brrr inside its real estate investing article and credits biggerpockets with popularizing the term.