BRRRR Loan Strategy

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Buy, Rehab, Rent, Refi Loans

  • Funds for your property rehab
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home under repair

Buy, Rehab & Rent Loan Highlights

Investor eligibility

Loan amount & terms

Acceptable Properties

 

Example of a BRRRR loan


• Buy a single-family home: $300,000
• Renovation costs: $75,000
• ARV (After Repair Value): $475,000

Step 1: Fix and Hold Bridge Loan:
• $255,000 to buy the property (85% of purchase price)
• $75,000 to renovate (100% of construction costs)
Total Loan Amount: $330,000

Step 2: DSCR 30 Year Fixed Loan:
• New Value (ARV): $475,000
• Cash out refinance (75% of value): $356,250

‐ You now have all of your cash back and more
‐ You have a property that cash flows
‐ Your property value is estimated to appreciate
fix and flip

Alternative loans to Buy, Rehab, Rent, Refinance (BRRR)

• Apply for a refinance mortgage if you have enough equity in a different property.

• Apply for a bridge loan if you have sufficient equity in another property.

• Apply for a fixed rate second mortgage on a property.

fix and flip profits

Buy, Rehab, Rent and Refinance Questions

Does the 70% rule apply to BRRRR strategy? + The BRRRR strategy does not have a difference. Most home flippers follow the "70% rule" for coming up with the maximum price. This rule says the most an investor should pay for a property is 70% of the After Repair Value minus the estimated rehab cost.
What makes the BRRRR Strategy better than house flipping? + The BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy is a better option than house flipping as it provides long-term passive income through rental property ownership while also building equity. Flipping a house can be a risky and unpredictable endeavor that relies heavily on market fluctuations and timing.

Some states are seeking to impose an added profit tax on house flippers. Plus, long term buy and hold adds stability to the area.
How long do I need to wait to refinance a home using the BRRRR strategy? + Some lenders will allow as little as six months while others want 12 months before refinancing a renovated home with a renter to ensure the property has increased in value.
How to use the BRRRR method without any money down?+ Find a property that is undervalued and can be renovated. The purchase price, ARV and renovation costs are what is key to determining if you need to bring money to the deal. Next, secure a loan or investor for the renovations. Once the property has increased in value, refinance it to pay back the loan or investor, and repeat the process.