BRRRR
An investing strategy: Buy a distressed property, Rehab it, Rent it out, Refinance to pull cash out, Repeat. The goal is recycling the same down payment across many properties.
Get the steps of a home sale by email, in order, one short email at a time.
Eight short emails, free. Unsubscribe any time. What's in them
Part 1 of 4
Why a seller cares
A BRRRR investor buys a home needing work, fixes and rents it, and refinances out their cash. If that is who is offering on your house, they need a steep discount, and they need it to appraise high after the work.
Part 2 of 4
A simple example
An investor offers $160,000 for your dated house. They plan $40,000 of work, rent at $1,900, and a refinance at 75% of a $260,000 appraisal.
| The step | What it means for the price offered |
|---|---|
| Buy | As low as possible; every dollar comes back out at the refinance |
| Rehab and rent | Their cost, their tenant |
| Refinance | The bank's appraisal has to cover their purchase plus rehab |
A BRRRR offer is priced so the investor can get their money back. That is why it is low.
Part 3 of 4
What people get wrong
That an investor's cash offer is generous because it is cash. Cash is how they buy cheap; it is not a premium.
Part 4 of 4 · where to read next
Where it appears in the sale
What a definition is, and what it isn't
Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.
Written and researched by Keighbor Research · drawn from the reference glossary · how we research and check what we publish
In your Room, this word explains itself where it appears.
Your Room defines brrrr in the step you meet it in, beside the document or the date it belongs to. Free to set up, with an agent or on your own.
Organize my saleFree to set up. Pay once when you list: $89 or $189. 7-day refund.