📘 What is the BRRRR Strategy in Real Estate?

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. It’s a real estate investment strategy that allows investors to build a portfolio of rental properties using the same initial capital over and over again.

📌 When and Why the BRRRR Strategy is Used

This strategy is popular among real estate investors looking to scale quickly without constantly needing new capital. It allows you to recycle your cash by pulling equity out of a property after increasing its value through renovation and then reinvesting it in another deal.

It’s best used in markets where:

• Properties are undervalued
  
• Rehab costs are manageable
  
• Rents are strong
  
• Refinancing options are accessible
  

🔄 How the BRRRR Strategy Works

Here’s how each step flows:

1. Buy – Purchase an undervalued property, often with cash or hard money.
   
2. Rehab – Renovate the property to improve condition and increase value.
   
3. Rent – Lease it out to generate steady rental income.
   
4. Refinance – Use a long-term loan to pull out equity based on the new appraised value.
   

Repeat – Use that equity to fund your next deal.

🧮 Common BRRRR Equity Formula:

Example: If the property’s After Repair Value (ARV) is $250,000 and total investment (purchase + rehab) is $180,000:Equity = $250,000 − $180,000 = $70,000

✅ Pros

• Rapid portfolio growth using recycled capital
  
• Builds equity and cash flow
  
• Improves property value and neighborhood condition
  

⚠️ Cons

• Higher risk during rehab and refinancing stages
  
• Requires strong financial planning and good credit
  

Delays in renting or refinancing can stall growth