BRRRR
Buy, Rehab, Rent, Refinance, Repeat — a strategy where an investor buys a property below market value, renovates it, places a tenant, then refinances against the new appraised value to recover much of the invested cash before repeating the cycle. The refinance step depends on the post-rehab appraisal and current lending terms, which is where the strategy carries most of its risk.
Related terms
ARV (After-Repair Value)
The estimated market value of a property after planned renovations are complete. ARV is usually derived from comparable sales of already-renovated properties nearby. Flippers and BRRRR investors work backward from ARV to set a maximum purchase price and renovation budget.
Hard Money Loan
A short-term loan from a private lending company, secured by the property and underwritten mainly on the asset’s value — often its ARV — rather than the borrower’s income. Rates and fees run well above conventional mortgages, but closings are fast and condition requirements are loose, which is why flippers and BRRRR investors use them as bridge financing.
Cash-on-Cash Return
Annual pre-tax cash flow divided by the total cash actually invested — down payment, closing costs, and upfront repairs — expressed as a percentage. Unlike cap rate, cash-on-cash accounts for financing, so it shows what the investor’s own money is earning. Two identical properties can have very different cash-on-cash returns depending on the loan.