Back to Home
IQInvestment Strategy

BRRRR Strategy

Buy
Rehab
Rent
Refinance
Repeat

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. You purchase a distressed property below market value, renovate it to increase its value, rent it to generate income, refinance to pull out your invested capital, then use that capital to repeat the process. It's a powerful strategy for scaling a rental portfolio with limited funds.

IQ's Take

"BRRRR is the closest thing to a wealth-building cheat code in real estate. Done right, you can acquire properties with zero money left in the deal—infinite returns. But it requires discipline on the buy and precision on the rehab. InvestIQ calculates your ARV and refinance potential instantly."

The Capital Recycling Advantage

Each successful BRRRR recycles your initial investment into the next property, creating a snowball effect that can transform a single investment into a portfolio of cash-flowing rentals. It requires more skill than traditional buy-and-hold, but for ambitious investors willing to learn, BRRRR is the fastest path to financial independence through real estate.

$50K
Initial Capital
1st
Property
$50K
Refinance Out
2nd
Property
∞
Repeat
IQHow It Works

The BRRRR Cycle

B

BUY

Purchase distressed property at 70-75% of After Repair Value (ARV). Focus on foreclosures, estate sales, and off-market deals.

R

REHAB

Renovate strategically to maximize value and rentability. Focus on kitchens, bathrooms, flooring, and curb appeal.

R

RENT

Place qualified tenant at market rent. Signed lease demonstrates income to lenders for refinancing.

R

REFINANCE

Cash-out refinance at new appraised value. Pull out 75-80% of ARV to recover your initial investment.

R

REPEAT

Use returned capital for next deal. Build portfolio with recycled capital—one investment funds many properties.

IQ

InvestIQ Calculates Your BRRRR Numbers

I analyze ARV, estimate rehab costs, and calculate your refinance potential. See exactly how much capital you'll recycle—before you make an offer.

IQIQ's Playbook

Your Guide to Success

1

Find Deals at the Right Price

BRRRR only works when you buy right. Target properties at 70-75% of After Repair Value minus repair costs. This margin is essential for pulling out your capital on refinance.

IQ
IQ's Pro Tip

The 70% rule: Maximum Purchase Price = (ARV × 70%) - Repair Costs. If ARV is $200K and repairs are $30K, pay no more than $110K.

2

Estimate Repairs Accurately

Walk every property with a contractor before making offers. Create detailed scopes of work with line-item budgets. Include 10-15% contingency for surprises.

IQ
IQ's Pro Tip

Get three contractor bids for major projects. Build relationships with reliable contractors—they're your most valuable asset in BRRRR.

3

Use the Right Acquisition Financing

Traditional mortgages don't work for distressed properties. Use hard money loans, private lenders, home equity lines, or cash. Hard money typically costs 10-14% with 2-3 points.

IQ
IQ's Pro Tip

Build relationships with private lenders who offer better rates than hard money. Friends, family, or fellow investors may fund deals for 8-10% returns.

4

Execute Rehab Efficiently

Time is money in BRRRR—every month of carrying costs eats into your returns. Create a detailed project timeline, order materials in advance, and maintain constant communication with contractors.

IQ
IQ's Pro Tip

Do cosmetic upgrades yourself if you have skills, but hire licensed professionals for electrical, plumbing, and HVAC. Permits matter for the appraisal.

5

Rent at Market Rate Before Refinance

Lenders require a signed lease for cash-out refinancing. Place a qualified tenant at or above market rent before approaching lenders. Higher rent improves your debt-service coverage ratio.

IQ
IQ's Pro Tip

Time your refinance for 3-6 months after rehab completion. This allows the property to 'season' and demonstrates stable rental income to lenders.

6

Refinance and Recapture Capital

Work with lenders who offer 75-80% LTV cash-out refinances on investment properties. Order your own appraisal comps beforehand and provide the appraiser with a detailed list of improvements.

IQ
IQ's Pro Tip

A successful BRRRR returns 100% of your invested capital (or more). If you're leaving significant money in deals, you're either paying too much or over-improving.

IQ

Ready to BRRRR Your First Deal?

Point your camera at any property and get instant BRRRR analysis. I'll calculate ARV, rehab costs, and refinance potential.

IQAnalyze a Property Now