The BRRRR method (Buy, Rehab, Rent, Refinance, Repeat) is a popular real estate investment strategy that allows you to build a strong portfolio over time.

It involves buying undervalued properties, rehabbing them to increase their value, renting them out for steady income, and then refinancing to recoup your initial investment and potentially some profit. This frees up capital to repeat the process and expand your holdings.

For investors, having a reliable capital partner that is well-versed in the BRRRR strategy can significantly enhance your success through each stage of the process.

BUY: Securing the Initial Property
The first step is finding a property where you can boost the value through renovations. For a smooth acquisition, you’ll need a lender that can provide you with short-term bridge financing.

REHAB: Transforming the Property
Time to add value! Here’s where you focus on renovations that enhance the property’s value. Most private money lenders offer Rehab Financing which allows you to stay liquid through the renovation process.

RENT: Finding Qualified Tenants
Now that your property is rental-ready, it’s time to find tenants to rent out the property. At this stage you’ll be getting close to refinancing the loan into long-term rental financing. It’s important to consider a lender that offers DSCR loans which qualifies you based on the property’s rental income and not your personal income.

REFINANCE: Recycle Your Cash
The most important “R” of the process. Once you’ve completed the rehab, it’s time to access the property’s appreciated value by taking advantage of a cash-out refinance and transitioning into a long-term DSCR loan. These cash out funds becomes the foundation for your next project.

REPEAT: Scaling Your Portfolio
The goal with the BRRRR is to be able to recycle your capital quickly. Find a lender that offers high LTV cash out refi’s so you can maximize your funds and put your money back to work, scale your business, and continue on with the BRRRR.

Supercharge your BRRRR with a Specialized Lender

Not all lenders are created equal. Having a lender well-versed in the BRRRR strategy can significantly enhance your success. Here are some key things to consider within different stages of the process when it comes to finding a capital partner that specializes in supporting BRRRR investors:

• 1007 Appraisals: Traditional refinancing often requires a tenant in place. A lender offering 1007 appraisals allows you to refinance based on the property’s future rental income potential, even if it’s currently vacant. This eliminates a potential hurdle and speeds up the process.
• DSCR Loans: Debt-Service Coverage Ratio (DSCR) loans focus on a property’s rental income to qualify you for a refinance, rather than your personal income. This is ideal for BRRRR investors as the property’s income stream takes center stage.
• No Seasoning Requirements: Typically, lenders require a seasoning period (often 6-12 months) after closing before allowing a refinance. A lender with no seasoning requirements allows you to refinance your BRRRR property as soon as renovations are complete and the property is rent-ready.

By partnering with a lender who understands the BRRRR method, you can navigate the process with more confidence, potentially secure better loan terms, and ultimately achieve your real estate investment goals faster.