Temelios
Busy investorUnderwritingBRRRRBuy & Hold9 min read

Quick answer

This is the data checklist for screening a BRRRR deal before you commit to a deep dive. BRRRR — buy, rehab, rent, refinance, repeat — combines a flip's rehab risk with a rental's long-term math, so it has more places to break than any other beginner strategy. The numbers that decide it are the after repair value the refinance appraises at, the refinance LTV the lender allows, the cash left in the deal after cash-out, and whether the property still clears DSCR and produces post-refinance cash flow.

The whole strategy hinges on the refinance. If the appraisal comes in low or the rate comes in high, the deal you screened is not the deal you own.

Who this is for

This is for investors who have read the BRRRR guide and want a disciplined screening sequence for individual deals. It assumes you understand the five stages and need a fast way to test whether a specific property can survive all of them.

It does not re-teach the strategy — every term links to its glossary definition. For the full walkthrough, start with the guide.

Step 1: ARV and the appraisal gap

BRRRR depends on the refinance appraisal coming in at or above your projected ARV. Build it from closed comps of renovated homes, exactly as you would for a flip.

Step 2: Buy and rehab inputs

The acquisition and renovation are the flip-like stage. Get in cheap enough, and forced equity makes the refinance work.

Step 3: The refinance — the make-or-break stage

This is where BRRRR is actually decided. Three inputs drive it.

InputWhat it controls
Appraised ARVThe value the new loan is sized against
Refinance LTVThe share of ARV the lender will lend (often 70–75%)
Rate & termThe new monthly payment, which sets post-refi cash flow

New loan amount ≈ appraised ARV × refinance LTV. Compare that to your total cash in (purchase + rehab + holding + closing) to find your cash-out equity and cash left in the deal.

Step 4: Post-refinance cash flow and DSCR

A successful cash-out is worthless if the new, larger loan payment kills the cash flow. The bigger the refinance, the higher the debt service.

Run post-refi cash flow: rent minus all operating expenses minus the new mortgage payment. Then run DSCR against the new debt service in the DSCR calculator.

Step 5: The core BRRRR tension

BRRRR forces a tradeoff that no calculator resolves for you:

  • Pull out more cash → less of your own money trapped, but a bigger loan and weaker cash flow.
  • Pull out less cash → stronger cash flow and DSCR, but more capital left in the deal.

Pass/fail summary

CheckPass condition
ARVConservative, from recent closed comps
Buy + rehabAll-in cost leaves equity below ARV
RefinanceAppraisal and LTV recover most or all of your cash
SeasoningLender's timeline accounted for in holding costs
Post-refi cash flowPositive after the new, larger payment
DSCRAt or above lender minimum (often 1.20) post-refi

FAQ

Why is the refinance the most important stage of BRRRR?

Because it determines two things at once: how much of your cash you recover, and what your ongoing payment — and therefore cash flow — will be. A strong buy and rehab mean nothing if the appraisal comes in low or the new payment sinks the cash flow. The refinance is where the strategy is actually won or lost.

What is a typical refinance LTV for BRRRR?

Many lenders cash-out refinance investment properties at 70–75% of appraised value, though this varies by lender, loan type, and borrower. Always underwrite with a conservative LTV assumption — if you model 80% and the lender offers 70%, your cash-out and your math change materially.

What does "cash left in the deal" mean?

It is the portion of your own money that stays trapped in the property after the cash-out refinance — your total cash in minus the cash you recovered. The BRRRR goal is to drive this toward zero, but only while keeping positive cash flow and an acceptable DSCR.

What is seasoning and why does it matter?

Seasoning is the minimum time a lender requires you to own a property before refinancing at its new appraised value, often 6–12 months. It matters because it extends your holding period — and your holding costs — before you can pull cash out and recycle it into the next deal.

Is "infinite return" actually a good thing?

Only when the property still cash flows after the refinance. Recovering all your invested capital is attractive, but if the larger loan leaves the property with negative cash flow or a DSCR below 1.0, you own a property you cannot comfortably hold. Cash flow and DSCR come first; the return on near-zero capital is a bonus, not the goal.

Next steps

Run the screen on a real BRRRR deal:

For the strategy behind these numbers, see the BRRRR guide. To compare BRRRR with buy and hold and flipping, see Real Estate Investing Strategies Compared.

This article is for education only and is not financial, legal, tax, or investment advice. Consult qualified professionals before buying property.

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