🧊 The BRRRR Method: Build Wealth With One Rental at a Time

If you’ve ever dreamed of owning rental properties, building passive income, and creating long-term wealth—but didn’t know how to get started—the BRRRR method might be your perfect starting point.

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. It’s a powerful strategy used by real estate investors to scale their rental portfolios while recycling the same capital.

Let’s break it down in simple steps—with examples for how even brand-new investors can fund their first deal and what exit options are available once you’ve built equity.

🔁 What Is the BRRRR Method?

1. Buy – Purchase a distressed or undervalued property at a discount.
2. Rehab – Make improvements that boost the property’s value and rental potential.
3. Rent – Lease the property to a tenant to generate monthly income.
4. Refinance – Pull your cash (or most of it) back out by refinancing the new, higher value of the home.
5. Repeat – Use that same capital to buy your next deal!

💰 Funding Your First BRRRR: Creative Ways to Buy the Property

You don’t need a pile of cash in the bank to get started. Many BRRRR investors use creative financing options like:

🔹 Cash Purchase

Maybe you sold a home, inherited money, or saved up a nest egg. Buying with cash makes things simpler and faster.

🔹 HELOC (Home Equity Line of Credit)

Use the equity in your primary residence or another property to access funds for a down payment or full purchase.

Example: You have $80K in equity in your home. A HELOC lets you access that to fund the purchase and rehab of a rental.

🔹 Life Insurance Line of Credit

Certain whole life policies allow you to borrow against the cash value, often at low interest, and keep your policy intact.

Example: You have $100K in cash value in your policy and borrow $50K tax-free for your BRRRR project.

🔹 Hard Money Loan

Short-term, interest-only loan designed for fix-and-flip or rehab deals. These are fast to close and asset-based.

Example: You borrow 85% of purchase price + 100% of rehab costs and refinance before the balloon payment hits.

🔹 Credit Card Stacking

Using multiple 0% interest business credit cards to access quick capital (best done under professional guidance).

Example: A business credit pro helps you secure $50K across 3 cards. You use that to fund rehab or closing costs.

🔹 Private Money

Borrow from friends, family, or local investors looking for a return. You agree on simple terms and interest rates.

Example: Your friend lends you $60K at 10% interest, secured by a promissory note and lien on the property.

🏘️ Rent: Cash Flow & Market Rent

Once the rehab is done, place a reliable tenant in the property. Look for:

• Market rent vs your cost basis

• Tenant screening (credit, income, rental history)

• Landlord-friendly leases and protections

A good BRRRR deal should cash flow even before you refinance—ideally $200+/month after all expenses.

🏦 Refinance: Pull Your Cash Back

This is the exit that makes BRRRR so powerful—you extract your original investment and keep the property!

Common Refinancing Options:

✅ 30-Year Conventional Mortgage

• Low rates

• Requires strong credit and income

• Up to 75-80% LTV (loan-to-value)

✅ DSCR Loan (Debt Service Coverage Ratio)

• Based on the property’s cash flow, not your personal income

• Easier for full-time investors or self-employed borrowers

• Requires 1.1+ DSCR (rent/income must exceed loan payments)

✅ 15-20 Year Commercial Loan

• Ideal for multi-units or investor portfolios

• Higher rates, shorter terms, but often easier to qualify for

✅ New HELOC on the Investment Property

• Once you have equity, you may be able to get a HELOC on the rental itself

• Gives flexibility to borrow as needed again

📌 Pro Tip: Aim for a refinance that returns 100% or more of your initial investment. That means you’re playing with “house money” on the next deal.

🔁 Repeat: Grow Your Portfolio

Once you’ve done it once, you can do it again—and again. The same $50K can potentially fund 5–10 rental properties over time.

📊 BRRRR Example in Action:

🔹 Property Purchase:

• Purchase price: $90,000 (off-market distressed duplex)

• Rehab: $30,000

• Total investment: $120,000

🔹 After Rehab:

• Appraised value: $180,000

• Rents: $1,800/month

🔹 Refinance:

• New loan at 75% LTV = $135,000

• Pays off original $120K investment

• Leaves $15,000 “profit” + cash-flowing rental with $400/month profit

You now own a cash-flowing property… and have your original capital back to do it all again.

🧠 Final Thoughts

The BRRRR method is one of the most powerful wealth-building tools in real estate. With the right team, smart deal analysis, and creative funding, you can build a profitable portfolio one rental at a time—even if you’re starting from zero.

📌 Want to Learn More or Start Your Next Deal?

Let’s talk about how you can start BRRRRing your way to financial freedom. Whether you're looking for your first property or funding strategies, I’m happy to help you take that first step.