The BRRRR method, explained with numbers
BRRRR means buy, rehab, rent, refinance, repeat. The goal is to pull most of your cash back out at the refinance while keeping a rental that still pays for itself. Here is how to check both halves of that goal.
FlipMetric guide · Reviewed 2026-11-10
What is the BRRRR method?
BRRRR stands for buy, rehab, rent, refinance, repeat. You buy a property below its after-repair value, renovate it, rent it out, then refinance based on the new, higher value. The refinance can return much of the cash you put in, which you then use for the next deal.
A BRRRR succeeds only if two things are true:
- The refinance returns most of your cash, and
- The rental still makes money after the new, larger loan.
Many deals pass the first test and fail the second.
A worked example
Here is a cash purchase run through FlipMetric's BRRRR calculator with its defaults: four months of rehab at $600 a month in holding costs, and a refinance at 75% of the after-repair value, 7.25% over 30 years, with $4,000 in refinance closing costs.
| Input | Value |
|---|---|
| Purchase price | $140,000 |
| Purchase closing costs | $4,000 |
| Rehab | $40,000 |
| After-repair value | $240,000 |
| Property tax and insurance | $340 a month |
| Refinance | Value |
|---|---|
| Total cash in | $186,400 |
| New loan (75% of ARV) | $180,000 |
| Cash back after refinance costs | $176,000 |
| Cash left in the deal | $10,400 |
| Equity after refinance | $60,000 |
So far, an excellent result: almost all of the cash comes back. Now the rental test.
| Rent | Annual cash flow | Return on cash left in | DSCR |
|---|---|---|---|
| $1,850 a month | −$1,721 | Negative | 0.88 |
| $2,150 a month | $1,051 | 10.1% | 1.07 |
At $1,850 rent, the larger loan payment ($1,228 a month) turns the property cash-flow negative. At $2,150 it works, though DSCR is still below the 1.25 many lenders prefer, which could affect the refinance itself.
What makes a BRRRR work?
- A real discount. The gap between all-in cost and ARV is what the refinance unlocks.
- A supported ARV. The appraiser, not your spreadsheet, sets the refinance amount. See ARV and deal analysis.
- Rent that carries the new loan. Check cash flow at the refinance rate, not today's best case.
- A lender who will refinance. Ask about seasoning periods, maximum loan-to-value and DSCR minimums before you buy.
What are the main risks?
- The appraisal comes in low. A lower value means a smaller loan and more cash left in.
- Rates rise before the refinance. A higher rate shrinks cash flow.
- The rehab runs long. Holding costs grow every month.
- Rent comes in lower than planned. The example shows how quickly cash flow turns negative.
Run your own deal in the BRRRR calculator.
Questions people ask
Educational material from FlipMetric, not financial advice. Disclaimer.