Buy, Rehab, Rent, Refinance, Repeat — work out how much capital you actually get back out, and what the deal yields on what's left in.
Realistic valuation once works are complete.
Management, maintenance, insurance. Exclude the mortgage.
Capital left in the deal
$5,000
Lower is better
Indicative only. Excludes taxes and fees, which vary by market.
BRRRR is buy, rehab, rent, refinance, repeat. You acquire a property below market value, renovate it to raise the valuation, let it, then refinance against the new higher value to pull your original capital back out — and use that capital to do it again.
The whole strategy turns on one number: how much of your capital you get back at refinance. If the after-repair value supports a loan large enough to return everything you put in, you own a cash-flowing asset with none of your own money left in it, and your capital is free to repeat the process. If it does not, you have simply bought a rental with a lot of your capital tied up.
Every BRRRR failure traces back to an optimistic ARV. Investors estimate the post-renovation valuation from what they hope comparable properties will achieve, the lender's valuer disagrees, the refinance comes in lower than modelled, and capital that was supposed to be recycled is stuck in the property.
Be conservative. Use recent completed sales of genuinely comparable properties, not asking prices, and stress-test the model by lowering ARV by ten per cent. A deal that only works at the top of the valuation range is not a deal.
Cash-on-cash divides annual cashflow by the capital still in the deal. When you recycle everything, the figure is mathematically infinite — which sounds impressive and means only that you have no capital left in, not that the deal is risk-free. A property refinanced to the maximum carries a larger mortgage and thinner margin for a rate rise or a void period.
The cashflow figure above uses interest only, which is how most BRRRR investors evaluate a deal at the modelling stage. A capital-repayment mortgage will show lower monthly cashflow and build equity instead.
If you source BRRRR deals for investor clients, the work is matching stock to mandates and keeping refurb pipelines moving. RealEstateCRM.io holds acquisition costs, works status and post-refurb valuations on each property, and matches new inventory to the investors whose criteria it fits.
See property managementThese tools work on one deal at a time. RealEstateCRM.io tracks them across your whole portfolio — yields, commissions, forecasts and reporting from the deals already in your CRM.