BRRRR Deal Analyzer

BRRRR = Buy, Rehab, Rent, Refinance, Repeat. Strategy: acquire distressed property below market, renovate to increase value, lease to tenants, refinance at After-Repair Value (ARV) to pull original capital back out, then deploy capital into next deal. Infinite cash-on-cash when you pull 100% of capital. Coined by David Greene of BiggerPockets.

The Math That Makes BRRRR Work

Total deal cost (purchase + rehab + closing) should equal ≤75% of ARV. Standard refi at 75% LTV then returns 100% of capital. If purchase $100k + rehab $30k + closing $8k = $138k total, and ARV is $200k, refi at 75% × $200k = $150k pulls all $138k back PLUS $12k profit. Then rent covers new debt service and produces cash flow. The leverage compounds — each deal becomes the down payment for the next.

Where Most BRRRRs Fail

(1) Overpaying for purchase — must buy 65-70% of ARV minus rehab. (2) Rehab budget overruns — always add 20% contingency. (3) ARV mis-estimate — get 3+ comparable sales BEFORE buying. (4) Refi appraisal comes in low — happens 30% of the time; have backup plan. (5) Cash flow margin too thin — under $200/door monthly cash flow is risky. (6) Hard money + private lender holding costs that eat ARV.

When NOT to BRRRR

Hot markets where distressed inventory is scarce (2021-22 era). Markets with high property tax (Texas 2-3% kills cash flow). Areas where 75% LTV refi is unavailable for investors (some banks cap at 70%). Tenant-unfriendly states with long eviction timelines. Older properties with unknown roof/HVAC issues. Better strategy in slow markets where sellers are motivated.

Last updated May 2026. Sources: BiggerPockets — BRRRR Method, David Greene — BRRRR Book.