Investment Strategy
The BRRRR Method: Buy, Rehab, Rent, Refinance, Repeat
How the strategy actually works, current refinance seasoning rules, and a calculator that factors in real holding costs — not just purchase price and rehab.
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How BRRRR Works
Five phases, each with its own financing, timeline, and risk.
- Buy — Find a distressed property priced below market, typically through off-market channels, auctions, or listings that have sat unsold.
- Rehab — Renovate to force both higher rent and higher appraised value, on a disciplined budget and timeline.
- Rent — Place a qualified tenant at market rent. Lenders will base your refinance partly on this actual (or achievable) rent.
- Refinance — Once seasoning requirements are met, refinance into a long-term loan based on the new appraised value, pulling out cash in the process.
- Repeat — Redeploy the cash recovered from the refinance into the next property.
Typical Full-Cycle Timeline
A realistic timeline runs 11-14 months total: 1-2 months to acquire, 2-4 months to rehab, 2-4 weeks to lease up, then 6-12 months of seasoning before the refinance can close.
Capital Needed to Start
Most investors need $50,000-$100,000 in accessible capital for a first deal — covering the down payment or cash purchase, rehab budget, and holding costs through lease-up.
"Slow BRRRR" as an Alternative
In higher-rate environments, some investors deliberately extend the hold to 18-36 months, prioritizing a stronger tenant and equity position over speed of capital recycling.
Refinance Seasoning Rules
This is the single biggest timeline variable in a BRRRR deal — and it varies significantly by loan type.
| Loan Type | Typical Seasoning Requirement |
|---|---|
| Conventional (Fannie Mae) | 12 months of ownership, since an April 2023 rule change extended this from the prior 6-month requirement. |
| DSCR (non-QM) | Commonly 6 months from the recording date; some wholesale DSCR lenders accept as little as 3 months. |
| FHA | 6 months of ownership plus 6 on-time payments on the existing loan. |
| VA | No seasoning requirement. |
| Delayed Financing Exception | Lets cash buyers refinance sooner without waiting out a standard seasoning period, subject to lender rules. |
Because conventional seasoning now runs a full year, many active BRRRR investors lean on DSCR refinancing specifically to keep their capital-recycling timeline closer to 6-9 months rather than waiting out 12+ months on a Fannie Mae-backed loan.
↑ Back to topThe 70% Rule
A fast screening formula for whether a deal's purchase price leaves enough margin.
The Formula
Maximum offer = (After Repair Value × 70%) − estimated rehab budget. Paying more than this leaves less room for renovation overruns, a soft appraisal, or a slower lease-up than planned.
Why 70%, Not 100%
The 30% gap covers financing costs, holding costs, selling/refinance costs, and profit margin — all the real expenses a simple purchase-plus-rehab number leaves out.
A Guideline, Not a Guarantee
Some strong deals justify going above 70% (better location, faster lease-up, lower financing cost); the rule is a fast first filter, not the final underwriting.
Why Holding Costs Matter
The line item most back-of-napkin BRRRR math leaves out entirely — and it can be the difference between a deal that pencils and one that doesn't.
Rehab Loan Interest
If you finance part of the purchase and rehab with a hard money or bridge loan, interest accrues every month you hold the property before refinancing — often the single largest holding cost.
Property Taxes & Insurance
These continue accruing during rehab and lease-up even though the property isn't yet producing rental income to offset them.
Utilities & Vacancy
Keeping utilities on during construction, plus any vacancy period between rehab completion and a signed lease, adds real monthly cost with no offsetting income.
Seasoning Extends the Exposure
Since seasoning requirements (see above) can run 6-12 months, holding costs aren't a rounding error — over a 9-12 month hold, they can add up to a meaningful percentage of total cash invested.
The calculator below adds up every month of holding costs — including rehab loan interest — as part of total cash invested, not just purchase price and rehab budget.
↑ Back to top
BRRRR Calculator
Enter your numbers below — holding costs are factored in automatically based on your expected timeline.
Quick-Reference Glossary
| Term | Meaning |
|---|---|
| ARV | After Repair Value — the property's appraised value once renovations are complete. |
| Seasoning | The minimum ownership period a lender requires before approving a cash-out refinance. |
| DSCR Loan | A loan qualified using the property's own rental income rather than the borrower's personal income. |
| 70% Rule | Max offer = ARV × 70% minus rehab budget — a quick purchase-price screening formula. |
| Cash-on-Cash Return | Annual cash flow divided by cash actually left invested in the deal. |
| Delayed Financing Exception | A Fannie Mae provision letting cash buyers refinance sooner without a standard seasoning wait. |
Questions about how this applies to your situation? I'm happy to walk through it with you — [AGENT_NAME], [AGENT_PHONE] · [AGENT_EMAIL].
Frequently Asked Questions
What does BRRRR stand for?
Buy, Rehab, Rent, Refinance, Repeat. An investor buys a distressed property below market value, renovates it to increase both rent and appraised value, places a tenant, refinances into a long-term loan based on the new value, and uses the cash pulled out to fund the next deal.
How long do I have to wait before I can refinance a BRRRR property?
It depends on the loan type. Conventional Fannie Mae-backed refinances require 12 months of ownership as of an April 2023 rule change. DSCR (non-QM) lenders are more flexible, commonly allowing cash-out refinances after 6 months, with some offering 3-month seasoning. FHA requires 6 months of ownership plus 6 on-time payments. VA loans have no seasoning requirement. A delayed financing exception can also let cash buyers refinance sooner without waiting out a seasoning period.
What is the 70% rule in BRRRR investing?
A quick screening formula for the maximum purchase price: multiply the after-repair value (ARV) by 70%, then subtract the estimated rehab budget. Paying more than that result leaves less margin for renovation overruns, a lower-than-expected appraisal, or a slower lease-up.
How much cash do I need to start a BRRRR deal?
Most investors need somewhere between $50,000 and $100,000 in accessible capital for a first deal, covering the down payment (or full purchase price if buying with cash), the rehab budget, and holding costs during the renovation and lease-up period. Using a rehab/hard money loan to finance part of the purchase and renovation can reduce the upfront cash needed, at the cost of paying interest during the hold.
What happens if the refinance appraisal comes in lower than expected?
The refinance loan amount is based on the appraised value, not your renovation budget or hoped-for value, so a lower appraisal directly reduces how much cash you get back at refinance. This is one of the most common ways a BRRRR deal falls short of plan, and it's why conservative ARV estimates and a real contingency buffer matter more than optimism.
