BRRRR

What it is

BRRRR is buy, rehab, rent, refinance, repeat. Instead of selling your house on the market to a buyer, you’re selling it to a bank. You get a mortgage put on the property so you can hold it, and that mortgage pays off the hard money loan you used to buy and rehab the thing.

Here’s how the mechanics work. You buy a house using hard money — they’ll typically give you up to 70% of the after repair value, which usually covers your purchase and your renovation costs. You go do the rehab, same as a flip. Then you place a tenant. Now you’ve got a stabilized, fully rented house. Banks love that. They’ll give you a 30-year mortgage at 80% of the appraised value. That mortgage pays off the hard money loan. And because you bought at a discount and forced appreciation through the renovation, you’re all in for less than what the bank will lend you back — so you pull your original cash back out.

That is what Ross calls cash recycling. With the same money, you can buy multiple properties in sequence. One deal funds the next.

Why it matters

The point of running flips at all, for Ross, is to build a rental portfolio. Flipping puts cash in your pocket today. But the wealth — the compounding equity, the tenant buydown, the long-term appreciation — that’s in the rentals. BRRRR is the bridge between the two.

Ross explains it like this: if you buy right using the 70% rule — all in for 70% of ARV — and then a bank gives you back 80% of ARV as a mortgage, you’ve pulled out more than you put in. You don’t just keep your money. You keep a house.

The constraint is holding costs. You’re paying interest on the hard money loan while the rehab runs. If it drags, that eats the spread. That’s why the same discipline that makes a good flip — buy box, scope control, managing the gauntlet — makes a good BRRRR. The strategy is identical. The exit is different.

How it shows up

In 2026, I’m running four flips and four BRRRR projects simultaneously. The construction work is the same — my op-co gets paid on both. The difference is what happens when the renovation is done: a flip goes on the MLS, a BRRRR goes to an appraiser and then to a conventional lender for a 30-year fixed.

I also run BRRRR on tenant turnovers. Three houses came back in turnover with 20 to 30 grand each tied up in the renovation. Instead of leaving that equity sitting in the deal, I refinanced out. Even on houses with seller financing at 3%, if a turnover drops 50 grand in, a refinance gets that working again.

The tenant cash flow on a stabilized BRRRR doesn’t need to be big. My benchmark is simply net positive. If the tenant’s rent covers the mortgage plus expenses by even a dollar, it’s a deal. I’m not banking on monthly cash flow in year one. I’m banking on 30 years of appreciation and paydown.

Related

hard money, refinance, cash flow, equity gap, tenant buydown, holding costs, 70 percent rule, rental income