Refinance (Refi)
Replacing short-term acquisition debt with a long-term mortgage based on the improved value.
In BRRRR, the refinance is where the strategy pays off. After rehab, the property appraises at the new ARV. A traditional lender gives you a mortgage at 70-80% LTV (loan-to-value) based on that appraisal. You use the mortgage proceeds to repay your LOC/hard money, freeing that capital for the next deal. The goal is to pull out 100% of your invested capital while keeping a cash-flowing rental.
Refi Amount = ARV × LTV% Cash Recovered = Refi Amount - Refi Closing Costs Cash Left = Cost Basis - Cash Recovered
Kaison's BRRRR analysis calculates refinance proceeds at 75% LTV by default (configurable). It shows cash left in deal and flags if you're leaving too much capital behind.
Build relationships with portfolio lenders (local banks and credit unions) who lend based on property cash flow, not just your W-2 income. They'll do cash-out refis faster than big banks.
BRRRR (Buy, Rehab, Rent, Refinance, Repeat)
A strategy to build a rental portfolio by recycling capital through refinancing.
Loan-to-Value Ratio (LTV)
The loan amount as a percentage of the property's appraised value.
After Repair Value (ARV)
What a property will be worth after renovations are complete.
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.