What Is the BRRRR Strategy?
BRRRR stands for Buy, Renovate, Rent, Refinance, Repeat—a real estate investment model designed to help investors quickly scale rental portfolios using recycled capital. Unlike traditional buy-and-hold investing, BRRRR allows you to build equity and generate cash flow without continuously needing fresh capital.
This method is ideal for both new investors looking to start with one rental property and seasoned investors aiming to grow rapidly.
Step-by-Step: Breaking Down BRRRR
1. Buy
Find an undervalued property—typically off-market or distressed. The goal is to buy below market value, leaving room for equity after repairs.
- Look for motivated sellers, auction homes, or foreclosures
- Run numbers using the 70% Rule: Don’t pay more than 70% of the ARV (After Repair Value) minus rehab costs
2. Renovate
Focus on value-add renovations that improve livability and increase rent potential. Think kitchens, bathrooms, and curb appeal—skip luxury upgrades unless the market justifies it.
- Work with contractors who understand rental-grade rehabs
- Prioritize improvements that increase appraised value and tenant demand
3. Rent
Place a qualified tenant quickly at market (or slightly above-market) rent. A solid lease in place boosts both cash flow and your refinance position.
- Screen tenants carefully
- Consider Section 8 or other voucher programs in cash-flowing markets
- Use professional property management if scaling
4. Refinance
Once stabilized, refinance the property based on the new appraised value. The goal is to pull out most or all of your original capital.
- Aim for a cash-out refinance with 75–80% loan-to-value (LTV)
- Lock in a long-term, low-interest rate if possible
- Use DSCR loans or portfolio lenders for faster scaling
5. Repeat
Use the cash from your refinance to go out and buy the next property. The BRRRR method becomes a flywheel for wealth if executed correctly.
BRRRR: Pros and Cons
✅ Pros
- Scale Quickly: Build a portfolio without saving for each new down payment
- Force Equity: You increase the value through rehab—not just market appreciation
- Cash Flow: Once rented and refinanced, properties typically cash flow immediately
- Tax Advantages: Benefit from depreciation, mortgage interest deductions, and more
⚠️ Cons
- Upfront Capital Still Needed: Especially for the first deal
- Refi Risk: Appraisals or lending conditions may not align with your timeline
- Renovation Headaches: Budget overruns, delays, and contractor issues are common
- Market Sensitivity: Rising interest rates or declining rents can hurt the model
Who Should Use BRRRR?
- New Investors: Start small with one single-family rental and scale from there
- Experienced Investors: Ideal for scaling into multi-family or larger portfolios using smart leverage
- Florida Market Investors: Markets like Ormond Beach, Ocala, and Deltona offer great BRRRR opportunities with affordable entry points and strong rental demand
Common Mistakes to Avoid:
- Not buying the distressed property at a sufficient discount (MAO = 70% ARV – renovation + holding costs).
- Underestimating the renovations in terms of cost of renovation or time to hold.
- Overestimating the Appraised Value (ARV) – meet the appraiser and explain the work done and the number your expecting and why.
- Have your lender lined up in advance to streamline the process and give your offer more impact.
- Thinking this is a passive income strategy. It can be, but it will take certain critical mass where the cashflow can support your team and professional property management..
Final Thoughts: BRRRR as a Scalable Investment Strategy
Whether you’re building a portfolio from scratch or expanding an existing empire, BRRRR is one of the most effective and repeatable strategies in real estate. It allows you to leverage your time, money, and effort to build long-term wealth through cash-flowing rental properties.
🧭 Ready to BRRRR in Florida?
If you’re ready to take action or want help finding the right property to start your BRRRR journey, let’s connect. From Ormond Beach to Ocala, I’ll help you source the deal, run the numbers, and build a winning portfolio.
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