What Is the BRRRR Method and How Do You Calculate It?
Direct answer
BRRRR means buy, rehab, rent, refinance, repeat. Buy a property, repair it, rent it, and test whether a refinance can return enough of your invested cash to fund another purchase. For a cash-funded deal, cash left equals all-in cost minus refinance proceeds after closing costs. If you used a prior loan, subtract its payoff from proceeds separately. A low cash-left number does not prove profit: check rent, debt service, repairs, and reserves in the free BRRRR Calculator.
Illustrative BRRRR refinance check (cash-funded purchase)
| Purchase price | $90,000 |
|---|---|
| Rehab budget | $35,000 |
| Purchase closing and holding costs | $7,000 |
| All-in cost | $132,000 |
| Illustrative after-repair value | $180,000 |
| Refinance loan at 75% LTV | $135,000 |
| Less refinance closing costs | - $4,000 |
| Net cash returned at refinance | $131,000 |
| Cash left in deal | $1,000 |
In this hypothetical cash-funded purchase, $132,000 invested minus $131,000 returned leaves $1,000 in the deal. Actual lender terms, appraisal, rent, and any prior debt payoff can change the result.
Have a ZIP in mind?
Search live foreclosure inventory first, then bring any serious address back here for the state rules, checklist, and calculator math.
ZIP results are mixed inventory: pre-foreclosure, auction, and bank-owned REO listings.
Buy below market
Buy means acquiring a distressed or undervalued property, often from a foreclosure, motivated seller, probate estate, or off-market lead. A common starting target is a deep discount, often around 60-70% of after-repair value before you account for repairs, closing costs, and lender terms. The purchase price plus rehab budget must sit far enough below ARV that the refinance can still leave equity after closing costs and debt.
Rehab for value and rent
Rehab means improving the property enough to increase value and attract reliable tenants. Focus on repairs that support rent and appraisal value: kitchens, bathrooms, flooring, exterior issues, mechanical systems, safety, and energy efficiency. The repair budget and timeline directly affect cash-on-cash return.
Rent before refinancing
Rent means leasing the renovated property and proving the income. Monthly rent should cover mortgage, property taxes, insurance, maintenance, vacancy reserves, and management. Most lenders want a stable tenant and documented income before they size a refinance.
Refinance and repeat
Refinance is where BRRRR recycles capital. After roughly 6-12 months, depending on lender seasoning rules and property stabilization, you refinance at the new appraised value and may pull cash back out. If the new loan covers your purchase price, rehab, and closing costs, you have little or no cash left in the deal and can repeat the process on the next property.
Calculate cash left before you buy
Enter purchase price, rehab costs, projected rental income, ARV, refinance LTV, interest rate, and term in the free BRRRR Calculator. It shows all-in basis, refinance proceeds, cash left in the deal, debt service, monthly cash flow, and cash-on-cash return. Pair that with the Property Opportunity Score, Maximum Bid Calculator, and live ZIP-code foreclosure search before you decide a lead deserves full underwriting.
Related tools
BRRRR Calculator
Buy, Rehab, Rent, Refinance, Repeat. Measure cash left in the deal.
Rental Property Calculator
Analyze cap rate, cash-on-cash, and long-term rental returns.
Cash Flow Calculator
Break down monthly income, expenses, and net cash flow.
Property Opportunity Score
Score any lead 0-100 on distress and profit signals before you spend a minute underwriting it.
Take the checklist with you
Get the distressed-deal checklist, then use a real ZIP search to find properties worth underwriting.
Frequently asked questions
- What does each step of BRRRR mean?
- Buy means purchasing a distressed property below market value, often at a foreclosure auction or from a motivated seller. Rehab means renovating to raise the property's value. Rent means leasing it for monthly cash flow. Refinance means using the higher post-rehab value for a new loan that covers or nearly covers your purchase price plus rehab costs. Repeat means using recovered capital to fund the next deal.
- What is the 75% rule in BRRRR?
- The 75% rule says your total investment, purchase price plus rehabilitation costs, should not exceed about 75% of the property's after-repair value. Many investment lenders lend near 75% of ARV, so staying under that threshold gives the refinance a chance to return most or all of your capital instead of leaving too much cash tied up in the property.
- How do I know if a BRRRR deal is worth pursuing?
- Use the BRRRR Calculator to input your purchase price, rehab costs, projected monthly rent, ARV, and refinance terms. If the refinance loan covers your total investment with cash left over, or with zero cash left in the deal, the property is a candidate for deeper analysis. Cross-check the lead with the Property Opportunity Score to see whether it has enough distress and profit signals before you spend more time on it.
- Can I use BRRRR on any type of property?
- BRRRR works best on single-family homes and small multifamily properties, usually 2-4 units, in markets with steady rental demand and refinanceable collateral. The property must be rentable after rehab, so residential assets usually fit better than commercial or special-use properties. Always verify local demand, lender rules, ARV, and rent assumptions before you buy.