The BRRRR strategy starts with acquisition. You must buy significantly below ARV to create the equity that the refinance will pull out. Target properties at 60–70% of ARV before rehab. If a property is worth $200k renovated, your maximum purchase price is $120k–$140k. At 75% LTV refinance, you can pull out $150k — covering your purchase and most of your rehab if you bought right.
BRRRR rehab is not a flip rehab. You do not need quartz countertops and designer fixtures — you need a clean, functional, durable rental-grade renovation. Focus on mechanicals, LVP flooring, functional kitchen and baths, and curb appeal. Average BRRRR rehab runs $25k–$60k depending on property size and condition.
Find a tenant before you finish the rehab. List the property 30 days before your projected completion date and accept applications. A vacant property during the refinance process costs you carrying costs and weakens your refinance case — lenders want to see a lease in place. Target rent that covers PITI plus 20% for repairs and vacancy.
After 6–12 months of seasoning (most DSCR lenders require 6 months of rental history), refinance into a DSCR loan at 70–75% LTV. Use the appraised ARV — which should now reflect your completed renovation. The cash out from the refinance replenishes your capital for the next deal.
With capital recycled, find the next property and repeat. Each completed BRRRR leaves behind a cash-flowing rental with equity. Over 5–10 years of consistent execution, a BRRRR investor can build a portfolio of 10–20 properties starting from a single $50k–$100k capital base.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been investing in Northern Virginia real estate for 20+ years.