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BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. The strategy uses hard money to acquire and renovate a distressed rental property, then refinances into a long-term DSCR loan once the property is stabilized. If executed correctly, the refinance returns most or all of the investor's initial capital — which gets deployed into the next deal.
The investor purchases a distressed or undervalued rental property using a hard money loan. The property must be priced low enough that after renovation, the stabilized value supports a DSCR refinance at favorable LTV.
Hard money funds the purchase because:
The investor renovates the property to rent-ready condition. Draws are funded through the hard money loan's construction holdback as work is completed and inspected.
The renovation goal in BRRRR is different from a fix and flip:
Cosmetic upgrades that boost appraised value are valuable. Over-renovating beyond what the market rents support is wasted capital.
The investor places a tenant before or during the refinance process. DSCR lenders underwrite based on the property's rental income — so having a signed lease with a qualified tenant in place strengthens the refinance application and supports the appraised value.
Target: a rent that produces a DSCR of 1.0 or higher on the refinance loan (rent covers the new loan's principal, interest, taxes, and insurance).
The investor refinances the hard money loan into a long-term DSCR loan. A DSCR loan qualifies based on the property's rental income rather than the investor's personal income — making it the standard permanent financing vehicle for real estate investors.
Key refinance inputs:
The refinance proceeds pay off the hard money loan. If the ARV is high enough relative to total project cost, the investor recaptures most or all of their invested capital — which then funds the next acquisition.
Example:
| Item | Amount |
|---|---|
| Purchase price | $120,000 |
| Renovation cost | $35,000 |
| Total project cost | $155,000 |
| ARV (post-renovation appraised value) | $220,000 |
| DSCR refi at 75% LTV | $165,000 |
| Hard money loan payoff | $140,000 |
| Cash returned to investor | $25,000 |
| Capital left in deal | $15,000 |
In this example, the investor deployed $155,000 in total project costs (some via hard money, some out of pocket) and after refinance has only $15,000 of their own capital remaining in the deal — while owning a cash-flowing rental property. That $15,000 is "stuck" in the deal, but the $140,000 hard money payoff and the $25,000 cash-out give them capital to move on to the next deal.
The BRRRR only fully works when the ARV is high enough that the DSCR refi returns all the investor's capital. When the numbers are tighter, some capital remains in the deal — which is still fine, just less capital-efficient than the ideal scenario.
ARV does not support the refi: The renovation added less value than projected, or the appraiser came in below expectations. The DSCR loan does not pay off the hard money loan fully, leaving the investor to cover a gap.
Rent does not support the DSCR: The market rents are lower than projected, the DSCR falls below 1.0, and the DSCR lender either declines or reduces the loan amount.
Seasoning requirement extends the hard money timeline: The DSCR lender requires 6 months of ownership before refinancing, but the hard money loan matures in 12 months. If the rehab runs long, there is no room.
Over-renovation: The investor spent too much on renovation relative to what the market's appraised value and rent levels support. The project cost is high; the refi cannot return enough capital.
Not all hard money lenders are equally suited for BRRRR deals:
Broker Cheetah lets you filter lenders by loan type (fix and flip / BRRRR) and see verified terms so you can match your BRRRR deal to the right hard money program before you submit.
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