This term has been mentioned a few times, and I decided to reference this article for it.

How BRRRR Works

  1. Buy: You buy a rental property for a below-market price. This typically involves a property that needs a little TLC.
  2. Repair: You then repair, rehab, or renovate that property so you can attract tenants who will pay the monthly rent to live in the property.
  3. Rent: Once the property is rented to good tenants, the property starts generating income, which thereby increases the home’s value.
  4. Refinance: Once you can show a lender that you are making money from this property and that you have equity in it, you should be able to do a cash-out refinance.
  5. Repeat: Go back to Step 1 (above), buy another property and do it all over again!

A note on the BRRRR strategy: it works best with properties you can get for below market value or in other words, homes that aren’t move-in-ready.