How to finance a BRRRR
BRRRR (Buy, Rehab, Rent, Refinance, Repeat) is financed with two loans working together: first a short-term rehab loan that funds the purchase and renovation (often up to ~90% of purchase and 100% of rehab, sized against after-repair value), then a long-term DSCR cash-out refinance (typically up to ~75% of the stabilized value) that pays off the rehab loan and returns your capital once the property is rented. The math works when your all-in cost is low enough relative to ARV that the refinance returns most or all of your investment.
BRRRR is the strategy that lets investors recycle the same down payment across deal after deal. But it only works if the financing is structured correctly — and that means understanding the two-loan stack.
The two loans that make BRRRR work
BRRRR is not a single loan product. It is two loans that have to hand off to each other cleanly. Loan one is short-term rehab capital; loan two is long-term rental financing. Get the relationship between them right and you can pull most (sometimes all) of your capital back out.
Loan 1 — the rehab loan (Buy + Rehab)
The first loan is short-term, asset-based financing much like a fix & flip loan. It funds the acquisition plus the renovation budget, sized against the after-repair value (ARV) — often up to roughly 90% of purchase and 100% of rehab, with the total capped against ARV. Rehab funds are released in draws as work is completed. Terms typically run 6–18 months, interest-only.
Loan 2 — the DSCR cash-out refinance (Rent + Refinance)
Once the property is renovated and leased, you refinance into a long-term DSCR loan. This is the take-out: it pays off the rehab loan and returns your invested capital in cash. DSCR cash-out refinances qualify on the property's rent-to-payment coverage — no personal income documentation — and typically go up to about 75% of the stabilized value.
The math that decides everything
Whether you get all your money back comes down to one relationship: your all-in cost (purchase + rehab + carrying costs) versus the stabilized value. Because the refinance caps out around 75% of value, the more equity your rehab creates, the more of your capital comes back.
- Buy at $150k, rehab $50k → all-in $200k
- Stabilized value (ARV) appraises at $280k
- Refinance at 75% of $280k = $210k
- Result: the $210k refinance pays off the ~$200k all-in and returns your capital
Why align both loans up front
The rehab loan and the refinance must line up on leverage, timeline, and seasoning (how long you must own the property before a cash-out at full value). Arranging both through one broker lets you pressure-test the full-cycle math before you buy, and match a rehab lender and a DSCR lender whose terms actually fit together.
Frequently asked questions
How many loans does a BRRRR require?+
How much of my money can I get back in a BRRRR?+
What is seasoning and why does it matter?+
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