BRRRR Strategy Playbook

Buy, Rehab, Rent, Refinance, Repeat—a framework for building a rental portfolio while recycling your capital.

1. Property Acquisition

Target criteria:

Below-market purchase (distressed, motivated seller, or off-market)
Value-add potential (cosmetic or light structural)
Strong rental demand
Numbers that support refinance after rehab

Key metric: 70% rule (or similar):

MAO = (ARV × 70%) − Rehab − Closing/Holding

You need enough spread to cover rehab, holding costs, and still refinance out with little or no money left in the deal.

Due diligence:

Comps for ARV
Rent comps for monthly income
Inspection for rehab scope
Title review
Financing terms (bridge/hard money for acquisition + rehab)

2. Value-Add Renovations

Focus on rent-boosting improvements:

Kitchen and bathroom updates
Flooring, paint, fixtures
Curb appeal
Sometimes: add bedroom, convert space, finish basement

Avoid over-improving: Don’t put $50K into a $150K neighborhood. Match the comps.

Rehab timeline: 2–4 months typical. Faster = less holding cost, quicker to refinance.

Budget: Use your renovation template. Add contingency. Get contractor bids before closing.

3. Tenant Placement

Rent comps:

Use 3–5 comparable rentals (same beds/baths, similar sq ft, same area)
Adjust for condition and amenities
Aim for market rent, not top of market

Lease terms:

12-month lease standard
Security deposit (check local limits)
Pet policy, maintenance responsibilities
Late fees and lease terms in writing

Screening:

Credit check
Income verification (2.5–3× rent)
Rental history
Background check (where allowed)

Property management:

Self-manage to start, or hire at 8–10% of rent
Document everything: condition, lease, communications

4. Refinancing Strategy

When to refinance:

After rehab is complete
After property is rented (or has strong rent comps)
Typically 6–12 months after purchase

Refinance loan types:

DSCR loans: Based on property income, not personal income
Traditional rental loans: 15–30% down, 20–25% for investment
Portfolio lenders: More flexible, relationship-based

Target:

Refinance at 75–80% LTV of new appraised value
Pull out most or all of your initial capital
Cash flow positive after refinance (rent > PITI + reserves)

Example:

Purchase + rehab: $120,000 all-in
Appraised value after rehab: $180,000
Refinance at 75% LTV: $135,000
You get back $135,000 − pay off $100K bridge = $35K back
Net capital left in deal: $120K − $35K = $85K (or less if you refinance higher)

Goal: Recycle capital so you can do the next deal with minimal new money.

5. Portfolio Scaling

Repeat the cycle:

1. Use recycled capital + savings for next down payment

2. Find next value-add property

3. Rehab, rent, refinance

4. Repeat

Scaling considerations:

Financing: More properties = more lender options (portfolio, commercial)
Management: At 5–10+ units, professional management often makes sense
Entity structure: LLCs, land trusts, or other structures for liability and taxes
Reserves: 6+ months of expenses per property
Market concentration: Diversify across areas or property types over time

Tracking:

Per-property P&L
Total portfolio cash flow
Equity and loan balances
Refinance dates and terms

BRRRR Quick Checklist

[ ] Purchase below market with value-add potential
[ ] Rehab budget and timeline defined
[ ] Rent comps support target rent
[ ] Refinance exit planned (DSCR or traditional)
[ ] Numbers support pulling most capital out
[ ] Property cash flows after refinance
[ ] Lease and screening process in place
[ ] Systems for scaling (management, accounting, legal)

BRRRR Strategy Playbook