BRRRR Strategy • 10 min read

The Complete BRRRR Strategy Guide: How to Build Wealth with No Money Down

Updated December 27, 2024 • By Eyal Goren

Learn the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat) step-by-step. Real examples, calculations, and how to find deals using BrickBear's tools.

Quick Summary: What is BRRRR?

BRRRR is a real estate investing strategy where you:

  1. Buy a property below market value
  2. Rehab it to increase its value
  3. Rent it out for monthly cash flow
  4. Refinance to pull out your initial investment
  5. Repeat the process with your recovered capital

Result: You own a cash-flowing property with little to none of your own money left in the deal.

Why BRRRR is the Best Strategy for Building Wealth

Imagine buying a rental property that pays you every month, then getting all your money back to do it again. That's BRRRR.

Here's why experienced investors love it:

  • Infinite returns: When you pull all your money out, your return on investment becomes infinite
  • Velocity of money: Use the same capital over and over again
  • Forced appreciation: You create value through rehab, not waiting for the market
  • Monthly cash flow: Each property generates passive income
  • Build a portfolio fast: No need to save for years between purchases

A Real BRRRR Example (With Actual Numbers)

Let me show you exactly how BRRRR works with a real example:

🏠 Example Deal: 123 Oak Street, Cleveland OH

Purchase Price:

$65,000

Rehab Budget:

$35,000

Total Investment:

$100,000

After Repair Value:

$140,000

Monthly Rent:

$1,400

Refinance (75% of ARV):

$105,000

You get back $105k - $100k = $5k MORE than invested!

Final Result:

✓ You own a $140,000 property

✓ It generates $300/month profit after expenses

✓ You have ALL your money back (plus $5k)

Step 1: Finding the Right Property (The Most Important Step)

Not every property works for BRRRR. You need to find properties with "meat on the bone" – enough room between purchase price and ARV to make the numbers work.

What Makes a Good BRRRR Deal?

The 75% Rule

Your total investment (purchase + rehab) should not exceed 75% of the After Repair Value.

Formula: Purchase Price + Rehab ≤ ARV × 0.75

Example: If ARV = $140,000, then max investment = $105,000

Where to Find BRRRR Properties

Start with the MLS (Zillow, Redfin, Realtor.com). Look for:

  • "Fixer-upper" or "handyman special" in the description
  • Properties sitting on market for 60+ days
  • Estate sales (heirs often want quick sales)
  • Foreclosures and REO properties
  • Homes with bad photos (seriously, this works)
  • "Cash only" listings (less competition)

Using BrickBear to Find Deals Fast

Here's my exact process using BrickBear's Chrome extension:

  1. Open Zillow/Redfin and set filters:
    • Max price: 70% of typical ARV in your area
    • Property type: Single family or small multi
    • Sort by: Days on market (highest first)
  2. Click the BrickBear extension on any property that looks promising
  3. The extension automatically saves:
    • All property details
    • Photos
    • Agent contact info
  4. Analyze in BrickBear (takes 30 seconds)
  5. Make offers on everything that meets the 75% rule

Pro Tip: Save 20-30 properties, analyze them all in BrickBear, then make offers on the top 5. It's a numbers game – most offers will be rejected, but you only need one to work.

Step 2: Analyzing Deals (Know Your Numbers)

This is where most beginners mess up. You MUST know these numbers before making an offer:

The Key Numbers You Need

BRRRR Deal Calculator

After Repair Value (ARV) Use comparable sales
× 75% (Max Investment) = Maximum All-In Cost
− Rehab Costs Get contractor estimates
− Closing Costs (3%) Title, attorney, etc.
− Holding Costs 3-6 months of payments
= Maximum Offer Price This is your MAO

Quick Analysis in BrickBear

BrickBear calculates all this automatically:

  1. Import the property using the Chrome extension
  2. Enter your ARV (BrickBear suggests based on comps)
  3. Input rehab estimate (or use BrickBear's AI estimator)
  4. BrickBear calculates:
    • Maximum offer price
    • Expected monthly cash flow
    • Cash-on-cash return
    • How much you'll get back in refinance

Step 3: Making Your Offer (The Numbers Game)

Here's the truth: You'll need to make lots of offers. Expect 20-30 offers to get 1 accepted. This is normal!

How to Structure Your Offer

Offer Template That Works

Price: Start at 80-85% of your MAO (leave room to negotiate)

Earnest Money: $1,000-2,000 (shows you're serious)

Inspection Period: 10-14 days (time to verify rehab costs)

Closing: 30 days (or less if cash)

Contingencies: Inspection and financing (if using a loan)

Include a personal letter explaining you're an investor who will close quickly and won't ask for repairs. Sellers love certainty.

Step 4: Financing Your BRRRR Deal

You need two types of financing for BRRRR:

1. Purchase & Rehab Financing

Hard Money Loan

  • ✓ 70-80% of purchase + 100% rehab
  • ✓ Close in 7-14 days
  • ✓ No income verification
  • ✗ High interest (10-14%)
  • ✗ Points and fees (2-4%)

Best for: Speed and convenience

Private Money

  • ✓ Flexible terms
  • ✓ Can fund 100%
  • ✓ Build relationships
  • ✗ Need to find lenders
  • ✗ May want equity share

Best for: Experienced investors

2. Long-Term Refinance

After rehab and renting, you'll refinance into a conventional rental property loan:

  • Loan amount: 75-80% of appraised value
  • Interest rate: 7-8% (as of 2024)
  • Term: 30-year fixed
  • Seasoning period: Most banks require 6 months of ownership

Warning: Talk to your refinance lender BEFORE buying! Make sure they'll lend on your property type and area. Some banks won't refinance properties under $75k or in certain zip codes.

Step 5: Managing the Rehab (Don't Blow Your Budget)

The rehab is where deals die. Stay on budget and on schedule, or your profits disappear.

Rehab Order of Operations

  1. Roof & Foundation - Fix structural issues first
  2. Plumbing & Electrical - Update major systems
  3. HVAC - Heating and cooling
  4. Windows & Doors - Security and energy efficiency
  5. Kitchen & Bathrooms - Biggest value adds
  6. Flooring - Throughout the property
  7. Paint - Interior and exterior
  8. Landscaping - Curb appeal for appraisal

Budget Guidelines for Rentals

Typical Rehab Costs (2024 Prices)

Kitchen (basic rental grade): $5,000-8,000
Bathroom (full rehab): $3,000-5,000
Flooring (vinyl plank, per sq ft): $5-7 installed
Paint (interior, whole house): $2,500-4,000
Roof (architectural shingles): $7,000-12,000
HVAC (new system): $4,000-7,000

Always add 20% contingency to your rehab budget. Something always comes up.

Step 6: Renting It Out (Cash Flow is King)

You need a tenant before you can refinance. Here's how to fill it fast:

Setting the Right Rent

  • Check Rentometer.com for area rents
  • Look at similar properties on Zillow/Craigslist
  • Price $50-100 below market for fast rental
  • Better to rent quickly than hold out for top dollar

The 1% Rule

Monthly rent should equal 1% of your total investment.
Example: $100,000 investment = $1,000/month minimum rent
This ensures positive cash flow after refinance.

Step 7: The Refinance (Getting Your Money Back)

This is the magic moment – pulling your capital back out!

Refinance Requirements

  • Seasoning: Own property 6-12 months
  • Occupied: Must have paying tenant
  • Appraisal: Must hit your ARV target
  • Credit: 680+ for best rates
  • DTI: Debt-to-income under 45%

What If the Appraisal Comes In Low?

Don't panic. You have options:

  1. Challenge the appraisal with better comps
  2. Try another lender (different appraiser)
  3. Wait 6 months and try again
  4. Keep as-is and move to next deal with remaining capital

Common BRRRR Mistakes (Learn From Others' Pain)

❌ Top 5 BRRRR Failures

1. Overestimating ARV

Use real comps, not Zillow estimates. When in doubt, be conservative.

2. Underestimating Rehab Costs

Always add 20% buffer. Hidden problems always appear once you start demo.

3. Over-Improving for the Area

Granite counters don't make sense in a C-class neighborhood. Match the area standard.

4. Not Vetting Contractors

Get references, check licenses, never pay more than 30% upfront.

5. Ignoring Holding Costs

Budget for 6 months of payments, utilities, insurance. Rehabs always take longer.

Your First BRRRR: Start Small and Simple

For your first deal, look for:

  • Price range: $50,000-100,000 purchase price
  • Rehab scope: Cosmetic only (paint, flooring, kitchen, bath)
  • Location: B or C class neighborhood you know well
  • Property type: 3 bed, 1-2 bath single family
  • Timeline: 2-3 month rehab maximum

The BrickBear Advantage: From Search to Success

Here's exactly how BrickBear speeds up the BRRRR process:

BrickBear BRRRR Workflow

1

Find Properties (2 minutes)

Browse Zillow → Click extension → Properties saved instantly

2

Analyze Deals (30 seconds)

Automatic MAO calculation, cash flow projection, refinance estimate

3

Track Everything (Ongoing)

Manage offers, rehabs, tenants - all in one dashboard

Start Free Trial Get Chrome Extension

BRRRR Success Stories

Real Results from BrickBear Users

"Found 3 BRRRR deals in my first month using BrickBear. The extension saved me hours of data entry."

- Sarah M., Cleveland investor

"The analysis tool caught issues I would have missed. Saved me from a bad deal."

- Mike D., Houston investor

"Went from 0 to 5 rentals in 18 months using BRRRR and BrickBear."

- Jennifer K., Atlanta investor

Your Next Steps

Ready to start? Here's your action plan:

  1. Install BrickBear Chrome Extension (it's free)
  2. Set up your BrickBear account (free trial available)
  3. Save 20-30 properties from Zillow/Redfin today
  4. Analyze them all in BrickBear
  5. Make offers on the top 5 that meet the 75% rule

Remember: The first deal is the hardest. Once you complete one BRRRR, you'll have:

  • Experience and confidence
  • A team (agent, contractor, lender)
  • Proof of concept for private lenders
  • Cash flow to support the next deal

Frequently Asked Questions

Q: How much money do I need to start?

A: With hard money, you'll need 20-30% of purchase price plus rehab reserves. For a $60k house with $30k rehab, expect to need $20-30k to start.

Q: What if I can't refinance for the full amount?

A: You'll leave some money in the deal. Not ideal, but you still have a cash-flowing property. Save the cash flow to fund your next deal.

Q: How many properties can I BRRRR per year?

A: Realistically, 2-4 as a beginner. Each deal takes 4-6 months from purchase to refinance. As you get experience and build a team, you can do more simultaneously.

Q: Should I use an LLC?

A: Talk to a lawyer and CPA. Many investors start in their personal name for easier financing, then transfer to LLC after refinance. Each situation is different.

Q: What markets are best for BRRRR?

A: Look for: median home price under $200k, population growth, diverse economy, landlord-friendly laws. Midwest markets like Cleveland, Indianapolis, and Kansas City are popular.

Final Thoughts: Just Start

Analysis paralysis kills more real estate dreams than bad deals ever will. You don't need to know everything to start. You need to:

  1. Find deals
  2. Analyze them
  3. Make offers
  4. Learn from each no
  5. Celebrate each yes

The BRRRR strategy has created more millionaire real estate investors than any other method. With BrickBear's tools, you can join them.

Start Your BRRRR Journey Today

Join 10,000+ investors using BrickBear to find and analyze BRRRR deals faster than ever before.

Get Started Free Install Extension

Disclaimer: Real estate investing involves risk. This article is for educational purposes only. Past performance doesn't guarantee future results. Always consult with qualified professionals before making investment decisions.

About the Author

Eyal Goren

Founder of BrickBear and active real estate investor. Passionate about making real estate investing accessible through technology.