BRRRR Method Calculator

What is the BRRRR Method?

The BRRRR method is a real estate investment strategy made famous by BiggerPockets. It allows investors to build a massive portfolio of rental properties using the exact same pool of initial capital over and over again.

Step 1: Buy

You buy a distressed property below market value. Typically, this is done with cash or a short-term hard money loan, because banks won't lend on unlivable houses.

Step 2: Rehab

You renovate the property to bring it up to neighborhood standards, forcing the value of the home (ARV) to skyrocket.

Step 3: Rent

You place a tenant in the newly renovated property. Banks want to see signed leases and steady rental income before they will refinance the property.

Step 4: Refinance

You go to a bank and do a "Cash-Out Refinance". The bank appraises the newly renovated house (the ARV) and gives you a new 30-year mortgage for 70% to 75% of that new value.

Step 5: Repeat

If you bought and rehabbed the house correctly, the cash the bank gives you will be enough to completely pay off your initial purchase and rehab costs. You now own a cash-flowing rental property with $0 of your own money left in the deal (an infinite ROI). You take your original capital and go buy the next house.