BRRRR (Buy, Rehab, Rent, Refinance, Repeat)
A strategy to build a rental portfolio by recycling capital through refinancing.
BRRRR is a wealth-building strategy where you buy a distressed property below market value, renovate it, rent it out, refinance based on the new (higher) appraised value to pull your capital back out, then repeat the process with the recovered funds. The goal is to own a cash-flowing rental with little or none of your own money left in the deal. Done well, you can scale a portfolio without needing new capital for each property.
Cash Left in Deal = Cost Basis - Refinance Proceeds Goal: Cash Left ≈ $0
BRRRR is one of two analysis modes in Kaison. When you select BRRRR, the engine evaluates rent income, DSCR, refinance equity, and long-term cash-on-cash returns. The scoring rubric weights equity and DSCR heavily.
Buy at $130K, rehab for $40K, all-in $180K. ARV is $230K. Rent for $1,800/mo. Refinance at 75% LTV: $172.5K loan. Cash left in deal: $7.5K. You now own a property cash-flowing $300/mo with only $7.5K of your capital tied up.
The 'Repeat' in BRRRR only works if your refinance returns most of your capital. If you're leaving $30K+ in every deal, you'll run out of money by property #3. Target deals where cost basis is ≤ 75% of ARV.
Flip (Buy, Rehab, Sell)
Buy a distressed property, renovate it, and sell for a profit.
Refinance (Refi)
Replacing short-term acquisition debt with a long-term mortgage based on the improved value.
Cash-on-Cash Return (CoC)
Annual cash flow divided by total cash invested — your return on actual dollars deployed.
Debt Service Coverage Ratio (DSCR)
Net operating income divided by debt payments — can the property pay its own mortgage?
Equity
The difference between what a property is worth and what you owe on it.
Educational content only. Consult a CPA or attorney for advice specific to your situation.