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 $150,000 purchase with $40,000 of rehab and a $260,000 appraisal, a 75% refinance returns about $54,000 of the $71,000 invested and leaves a rental with $65,000 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.

Further reading: BRRRR Method (Real Estate Investing) on Wikipedia.