The BRRRR Method: Buy, Rehab, Rent, Refinance, Repeat

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. It is the single best strategy for building a rental portfolio without running out of cash after two or three properties.

The concept is straightforward. You buy a distressed property below market value. You rehab it to force the value up. You rent it out to a tenant. You refinance based on the new, higher appraised value. The refinance pays back most or all of your original investment, and you use that capital to do it again.

The magic is in the forced appreciation. When you buy a house for $80,000 and put $30,000 into it, your total investment is $110,000. But if the ARV is $160,000 after rehab, a lender will refinance at 75% of that value, giving you a $120,000 loan. You just pulled out more than you put in, and you still own the property with a tenant paying the mortgage.

This works because you are buying at a discount and adding value through renovation. The gap between your all-in cost and the appraised value is your equity. The refinance converts that equity into cash you can redeploy.

FlipMantis runs the BRRRR analysis alongside your flip and wholesale numbers. When you underwrite a deal, you see all three exit strategies side by side. Some deals are better as wholesales. Some are better as flips. And some are BRRRR candidates where the long-term play beats the quick profit.

Not every deal is a BRRRR deal. You need three things: a significant discount to ARV, a neighborhood that supports strong rental demand, and numbers that work at current interest rates.

Start with the discount. Your all-in cost, purchase plus rehab, needs to be 70 to 75 percent of ARV or less. That gives you enough equity to refinance out most of your cash. If you are buying at 85% of ARV, the math does not work no matter how good the rent is.

Next, look at the neighborhood. BRRRR properties need tenants. B and C class neighborhoods usually work best. A class areas have high purchase prices that compress your cash-on-cash return. D class areas have low purchase prices but higher vacancy, more maintenance, and harder property management. The sweet spot is a working-class neighborhood with low vacancy, stable rents, and enough demand that you can fill the unit within 30 days.

FlipMantis List Builder lets you filter for BRRRR-specific criteria. Pull absentee owners with high equity in zip codes where rent-to-price ratios exceed 1%. Stack on tax delinquency or code violations to find motivated sellers. The platform shows you estimated rent alongside your ARV and rehab numbers so you can screen deals quickly.

Run the rental analysis before you make an offer. If the monthly rent does not cover PITI plus property management plus maintenance reserves, the deal does not work as a BRRRR regardless of how cheap you buy it.

BRRRR math has more moving parts than a wholesale deal, but it is still just arithmetic. Here is the sequence.

First, determine your ARV using comps. Same process as any deal. Pull sold properties within a half mile, similar size and condition, within the last six months. FlipMantis comps tool handles this and lets you adjust for differences.

Second, estimate your rehab. Use line items, not per-square-foot guesses. A BRRRR rehab should target the rental market, not luxury finishes. Durable flooring, solid cabinets, basic granite or quartz counters. You want things that survive tenants and still appraise well.

Third, calculate your all-in cost: purchase price plus rehab plus closing costs plus holding costs during renovation. This is the number you need to recover through the refinance.

Fourth, determine your refinance amount. Most lenders do 75% LTV on investment properties. Some go to 80%. Multiply your ARV by 0.75 and that is your maximum loan amount. If that number exceeds your all-in cost, you pull out all your cash. If it falls short, you leave money in the deal.

Fifth, run the rental analysis. Monthly rent minus PITI, property management (8-10%), vacancy reserve (5-8%), maintenance reserve (5-10%), and CapEx reserve (5%). The number left over is your cash flow.

FlipMantis runs all five steps in one screen. Plug in your inputs and it shows you cash-on-cash return, monthly cash flow, and how much capital you leave in the deal.

The refinance is where BRRRR either works or stalls. Get this step wrong and your capital stays trapped in the deal.

Seasoning is the biggest factor. Most conventional lenders require 6 to 12 months of ownership before they will refinance based on appraised value. Some DSCR lenders have no seasoning requirement. Others require 3 months. Know your lender options before you close on the purchase so you are not surprised by a 12-month wait.

DSCR loans, Debt Service Coverage Ratio, are the most common refinance tool for BRRRR investors. The lender cares about whether the rent covers the mortgage, not your personal income. If the property rents for $1,500 and the PITI is $1,100, your DSCR is 1.36. Most lenders want 1.2 or higher.

Prepare for the appraisal like it is a job interview. Clean the property. Provide the appraiser with your comp list and a scope of work showing what you renovated. Stage it if it is vacant. The difference between a $155,000 appraisal and a $170,000 appraisal can be $11,000 in refinance proceeds. That is real money you leave on the table by not preparing.

Start talking to lenders during the rehab, not after. Get pre-qualified for the refinance before the tenant moves in. That way, the moment seasoning is met, you close the refi and get your cash back. Every month your capital sits in a finished, rented property is a month you are not using it on the next deal.

One BRRRR deal is a project. Ten BRRRR deals is a business. The difference is systems.

After your first refinance, you have proven the process works in your market. You know your contractors, your lender, your property manager, and your numbers. The second deal should take half the time to underwrite because you already know what works.

Track every property in your pipeline. FlipMantis shows you each deal by stage: acquiring, rehabbing, leasing, refinancing. When you have four properties in different stages simultaneously, you need to know where each one stands without opening four different spreadsheets.

Build your team before you need them. Property manager lined up before the rehab finishes. Lender pre-qualified before you start looking for the next deal. Contractor scheduled for the next project before the current one wraps. Dead time between deals is the enemy of scale.

The numbers compound. If you do two BRRRR deals per year and leave $10,000 in each one, after five years you have 10 properties with $100,000 of equity, tenants paying down the mortgages, and monthly cash flow covering your living expenses. After ten years, those properties have appreciated and the loan balances have dropped.

FlipMantis portfolio tracking shows your total equity, monthly cash flow, and individual property performance. You can see which properties are underperforming and which ones are carrying the portfolio. That visibility is what lets you make smart decisions about whether to hold, sell, or 1031 exchange into something bigger.