Question 1

What does BRRRR stand for in real estate?

Accepted Answer

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. It is a real estate investment strategy where an investor purchases a distressed property, renovates it to increase its value, rents it out, refinances based on the new appraised value to pull out invested capital, then repeats the process with the recovered capital.

Question 2

What LTV can I expect on a BRRRR cash-out refinance?

Accepted Answer

Most DSCR and conventional lenders will refinance at 70-75% of the post-rehab appraised value (ARV). To pull all your capital out, you need to have purchased and rehabbed at below 70-75% of ARV. The difference between your total investment and the refinance proceeds is the cash left in the deal.

Question 3

What is infinite return in BRRRR investing?

Accepted Answer

Infinite return occurs when a BRRRR refinance pulls out 100% or more of the investor's invested capital, leaving zero dollars in the deal while still cash flowing positively. Any cash flow on a zero-cost-basis property produces an infinite percentage return on invested capital.

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