From moguls like Donald Trump to HGTV house-flippers, countless people have invested in real estate to build their wealth. Some focus on commercial real estate, others restore and sell run-down residences, and still others buy single- and multifamily homes to rent out to tenants.
In Buy, Rehab, Rent, Refinance, Repeat, David M. Greene focuses on this last category. He explains how the buy, rehab, rent, refinance, repeat (BRRRR) method differs from traditional real estate investing, and he argues that the BRRRR approach is the most efficient way to build wealth and gain financial freedom by developing a large portfolio of investment rental properties.
(Shortform note: Although some experts dispute that BRRRR is the best method for buying investment properties, many agree that rental properties are ideal low-risk investments: You can use other people’s money to buy them, there’s a steady demand for rentals, and properties usually appreciate in the long term—even if markets dip in the short term. To protect yourself against market volatility, keep a cash reserve, regularly review your expenses, trim unnecessary costs, and maintain your properties.)
In this guide, we’ll describe Greene’s tips for executing each step of the BRRRR method and compare his strategies to other methods. We’ll also provide additional information and key context for using Greene’s advice effectively.
Greene began real estate investing in 2009. During the first eight years, he bought two to three properties each year by following the traditional method (which we’ll explain next). He began using the BRRRR method in 2017, and within two years he’d accelerated his investing to buy two properties a month. Greene now runs a real estate team within Keller Williams, he’s published three books on real estate investing, and he co-hosts the BiggerPockets Real Estate Podcast.
(Shortform note: Well-known real estate investor Brandon Turner coined the term BRRRR, though he acknowledges that other investors were already using the strategy. Turner and Greene helped popularize the method on the BiggerPockets podcasts, which they co-hosted from 2018 to 2021.)
The BRRRR model hinges on two elements:
Together, these steps represent the biggest difference between BRRRR and the traditional approach to real estate investing: BRRRR investors finance the property at a later stage than traditional investors. This chart illustrates the difference in the sequence of steps for each approach.
| BRRRR | Traditional | |
| Step 1 | Buy a property below market value and pay full price (without mortgage payments). | Finance: Borrow money from a lender to cover the property’s purchase. |
| Step 2 | Rehab, or renovate the property, paying for it out of pocket. | Buy the property with an out-of-pocket down payment. |
| Step 3 | Rent the property. | Rehab the property. |
| Step 4 | Refinance the property. | Rent the property. |
| Step 5 | Repeat: Use the money from refinancing to buy and rehab a new investment property. | Save or secure money through other means (which we’ll discuss later) for the down payment on a new investment property. |
(Shortform note: Although BRRRR is described as a five-step process, there is an implied preliminary step: saving or securing money to buy the property. Including this unstated step more clearly shows that the primary difference between BRRRR and traditional investing is that the “finance”—or “refinance”—stage and the “save” stage are flipped.)
Greene explains that the advantage of paying full price for a property and refinancing later is that the loan is based on the after-repair value (ARV), or the post-renovation appraisal. Since the renovations add value to the property, and the financing is proportionate to the home’s value, you get a bigger loan than you would if you’d financed the purchase of the property.
The goal is to pay as little as possible for the property and rehab it to increase the value as much as possible. Ideally, through refinancing, you recover all of your investment (or sometimes more), and you use that money to buy and renovate the next property. (Greene acknowledges that recouping your entire investment is a “home run”—something to strive for, but not something to expect on every project.) By pulling your money back out of the project, you make the same dollars work for you over and over, thereby increasing the velocity of your money.
BRRRR Is Best for Long-Term Profits and New Investors
The BRRRR process is best for investors who are focused on building a large portfolio of rental properties and growing wealth over time. By contrast, if you want to use rental properties to turn a profit quickly, a better strategy is to buy a turnkey property and begin renting it immediately.
Alternatively, real estate investor Chad Carson recommends using BRRRR only to begin building your portfolio of investment properties—otherwise, if you use BRRRR indefinitely, you’ll accumulate a large number of mortgages, and that creates greater risk if the market drops. Carson suggests that once you’ve acquired several properties, you use the rental debt snowball strategy by funneling all of your rental income into paying off one mortgage at a time until all of your properties are paid off. By eliminating your mortgage payments, you increase your cash flow, and at that point, you can choose whether and how to continue building your portfolio.
For example, imagine you find a fixer-upper for $95,000 and spend an additional $25,000 on renovations, making your total initial investment $120,000. After the improvements, the home is appraised for $160,000. You refinance, and the lender grants you a loan for 75% of this ARV, or $120,000. You’ve recovered your entire investment to use for your next property, and, as long as the tenants’ rent covers your mortgage and expenses, you’ve gained a consistent source of income. Greene asserts that even if the income from each property is just a few hundred dollars a month, this model allows you to quickly build your volume of properties and multiply that cash flow.
(Shortform note: A key to maintaining your long-term cash flow across your portfolio is to use the refinance to pull out only enough to recover your investment. If you’re approved to refinance for more than this amount, it can be tempting to borrow above your investment—or overleverage—so that you have more to invest in your next property. However, this creates a higher mortgage payment, which reduces your positive cash flow on that property.)
We’ll explore each step of the BRRRR method in detail. But Greene writes that there are a few things you’ll need to do before beginning: Begin looking for the agents and vendors you’ll work with through the BRRRR process and secure a loan pre-approval letter.
When you start investing, Greene says you need to assemble a team of people who you’ll work with on property after property. He calls this your “Core Four”; we’ll call it your Dream Team. Greene explains that the members of your Dream Team are not employees, but rather vendors and collaborators who specialize in working with real estate investors, which requires different knowledge and strategies than primary residence homeowners have.
(Shortform note: Greene offers two main pieces of advice for how to find the members of your Dream Team: First, build a reputation as someone people want to work with—by being fair, reliable, and helpful. Second, get recommendations through your network. But how do you build a network? Attend professional networking events, meetups, industry conferences, and open houses; host investment classes, parties, and charity events; and make an effort to constantly meet new people, both in person and online.)
Your Dream Team has four roles, though Greene advises having two people in each role to provide backup if one person becomes unavailable. The four roles are:
The Benefits of Investor-Friendly Vendors
Greene emphasizes the importance of ensuring your Dream Team members are investor-friendly. This requires that the vendor is not only willing to work with investors, who have different needs and demands than primary residence owners, but also that they have the knowledge and skills to cater to investors’ interests.
Investor-friendly real estate agents are versed in the area’s micro-markets, so they know which neighborhoods offer the best investments, and they have access to off-market properties, which gives investors a leg up on competing buyers.
Investor-friendly lenders understand investors’ objectives and work to get you approved for the high volume of loans needed for a large investment portfolio.
Investor-friendly contractors are likely to have lower prices because they expect you to bring a steady flow of new projects.
By definition, property managers would not work with primary residence homeowners.
It will take time to find the right people for your Dream Team, but once you do, you’ll build your relationships and develop more efficient systems through working together repeatedly. In some cases, because you consistently bring them business, you can even save money—for example, by asking for a lower agent commission, a discount on contractor work, or reduced management fees.
(Shortform note: Greene specifies that the members of your Dream Team are so important because they have the skills and knowledge to help you beyond performing their primary responsibilities—for example, a good PM not only manages properties but can also connect you with reliable handymen and estimate how much you can reasonably charge for rent. However, as a real estate investor, you’ll likely work with many other vendors, such as a bookkeeper, accountant, lawyer, notary, home stager, and photographer.)
Even though you’ll be paying full price for the property, Greene cautions that you must secure a loan pre-approval letter before beginning the BRRRR sequence, since the method hinges on your ability to refinance in Step 4. If you’re denied pre-approval, he suggests working with a business partner who can get pre-approved, or trying another form of real estate investing like house flipping.
(Shortform note: As a caveat, a lender can still deny your mortgage after pre-approval if your credit score, income, or assets drop, if your debt level rises, or if the loan requirements change.)
When you get pre-approved, find out key information that will impact your decisions throughout the rest of the process:
Greene recommends you get pre-approvals from at least two lenders because their rates and closing costs may vary.
When you’re ready to begin the BRRRR process, Greene claims that your success in Step 1 sets the tone for the success of the entire project: You need to buy significantly under market value to be able to recover most or all of your investment during the refinance. The amount of money you can save or make during the other steps is either more limited or is directly impacted by Step 1.
(Shortform note: Some critics of the BRRRR method say that it’s too difficult to find properties priced far enough below market value to make the math work. Others argue that real estate prices this low only exist in certain markets, like the Midwest and Southeast, which would force some investors to buy and manage their properties from out of state. Although Greene advocates for long-distance investing—he even wrote a book about it—other experienced investors discourage it.)
Greene strongly recommends saving money to buy (and renovate) your first property without debt, as he did. Doing this allows you to recoup your own cash during the refinance stage and use it to invest in your next property—without having to use money from your refinance or your property’s cash flow to pay off that initial debt. However, you don’t have to use your own money to do the BRRRR method; we’ll discuss alternatives later in this section.
But before explaining how to secure an investment property, Greene describes how to find a good deal.
Greene writes that the best deals are typically under one of three forms of distress:
To find properties that fall into one of the first two categories, you have to know where to look. Greene suggests finding foreclosures and property tax liens through live and online auctions. You can also drive through neighborhoods looking for distressed and neglected properties, search online for the owner’s name and contact information, and reach out with an offer to buy the property.
Greene also stresses networking with others to increase your chances of finding a great deal while reducing the leg work required. He suggests recruiting eyes and ears by networking with:
Additionally, advertise through direct mail and SEO, and frequently remind your family and friends that you buy homes in any condition.
Know Your Goals
Real estate investor and coach Phil Pustejovsky says that one pitfall of BRRRR is that it makes investors focus so narrowly on finding a property that is priced low enough to fit the BRRRR strategy that they pass up opportunities that could turn a profit using other investment methods, such as house-flipping or buying a turnkey rental property. According to Pustejovsky and other real estate investors, the key to success is to identify your goals and choose the investment strategies that will help you reach them.
Real estate investor Chad Carson lists five common goals and the best strategies for achieving them:
Get your start in real estate investing. The best strategies for beginners to start making money are BRRRR, live-in-flip (buy a fixer-upper, live there while renovating, and resell at least two years later to capitalize on tax benefits), house hacking (rent out extra rooms or units on your property), and live-in-then-rent (buy a home, live there, then leave and rent it out).
Start a business, rather than merely making an investment (as you would in stocks). The best strategies for this are house-flipping and becoming a wholesaler.
Make money without buying property, allowing you to take a more passive approach. The best strategies for this are to become a hard money lender or a discount note investor (someone who buys another person’s debt at a discounted price and earns the difference between the discount and face value).
Build wealth. The best strategies for this are short-term buy and hold rentals (buy rental properties and sell them after one to five years) and long-term buy-and-hold rentals (accumulate rental properties with no plans of selling).
Earn passive income. The best strategies for this are syndications (pool your money with others to buy properties or lend to investors) and real estate investment trusts (like a mutual fund that gives you a stake in profitable commercial properties).
To identify a good deal, Greene says you have to determine the property’s ARV (after-repair value), the renovation costs, and how much you’ll be able to charge for rent.
First, calculate your ARV and rehab expenses to gauge whether it’s possible to recover your capital when you refinance. As discussed, Greene recommends aiming for a 75% LTV, a loan worth 75% of the property value. With this rate, if your combined purchase and rehab costs are 75% of your ARV, then you’ll recover your entire investment when you refinance.
(Shortform note: It’s possible to secure up to a 95% LTV mortgage, though there are several trade-offs to consider. First, higher LTVs come with higher interest rates, which eat into your cash flow. Second, fewer lenders are willing to offer high LTVs because they are a bigger risk to the lending institution. Third, mortgages above 80% LTV typically require private mortgage insurance, which adds to your monthly property expenses.)
Estimating your ARV depends on the type of property you’re buying:
To estimate a property’s renovation costs, you’ll likely need a contractor to tour the property and provide an estimate. In his own investments, Greene brings a contractor and an inspector to the property at the same time to ensure that the contractor can factor in every major issue the inspector identifies. (Shortform note: Home inspectors can highlight issues a contractor may overlook. Inspectors check a home’s structure, foundation, flooring, roof, insulation, plumbing, electrical system, and HVAC system. For some properties, you may also want to bring in specialists to inspect for mold, water damage, asbestos, termites, radon, and lead paint or piping.)
Second, estimate how much you can charge for rent to calculate whether your property will cash-flow positively, meaning your rental income will more than cover your mortgage and expenses. As a general rule, Greene says that if you can rent the property for at least 1% of the purchase price, you’ll probably have a positive cash flow. (Shortform note: Real estate investment experts warn that single-family homes are riskier rental properties because your entire rental income relies on one tenant or family, so you have no cash flow on that property during vacancies. If it doesn’t look like rental income will produce a positive cash flow, you may still be able to profit by rehabbing the property and selling it as a flip.)
Once you’ve found a good deal, you may need to compete against other bidders to secure it—and Greene says that an all-cash offer makes your bid more competitive. Cash offers are attractive to sellers because they reduce the contingencies, which allow buyers to pull out of a deal without losing money within a window of time (the contingency period). Fewer contingencies mean greater odds that the deal will close smoothly and quickly.
There are three primary contingencies in every property sale:
(Shortform note: Each contingency is assigned a specific contingency period, during which the home is under contract. For example, a loan contingency may last 30 to 60 days, while an inspection contingency may be just 10 days. If the buyer’s financing isn’t approved or they can’t schedule a home inspection within the given time window, they have to decide whether to request an extension—which postpones the closing date—or move forward with the sale anyway.)
Greene adds that cash offers also open you to more investment opportunities because some extremely distressed properties don’t qualify for financing.
Although Greene stresses the importance of all-cash offers, it doesn’t have to be your cash. Alternative sources of funding include:
(Shortform note: Cash offers became more common as the pandemic turned the heat up on housing market competition: They accounted for 20% of home sales in 2019, and by 2021 that number jumped to 33%. Many of these offers came from buyers looking to downsize, who were flush with cash after selling larger homes in the hot market. Facing low housing supply and competing offers for tens or hundreds of thousands of dollars above asking price, buyers with cash offers were nearly four times as likely to win bidding wars in late 2020 and early 2021.)
Once you’ve found and bought a great deal, Greene says that executing a cost-effective, value-raising renovation is the second most important aspect of making a profit in the BRRRR method. This involves working with the right contractor and making smart upgrades to the property.
(Shortform note: Many real estate investors consider this to be the riskiest step in BRRRR, especially for rookie investors, since unexpected issues with the property, poor project management, and bad renovation decisions can add tens of thousands of dollars to the budget. As an alternative, buying properties that are already renovated and rented out allows wary investors to bypass two of BRRRR’s biggest potential hazards.)
As we mentioned, each member of your Dream Team should have experience working with investors. Greene describes an investor-friendly contractor as one who knows how to find cost-effective solutions to problems (like repairing instead of replacing worn flooring). (Shortform note: When vetting contractors, ask where they’re licensed, how many years’ experience they have, what types of repairs they can and can’t do, what payment method and schedule they require, and how they can guarantee that they’ll meet the required deadlines.)
If you don’t yet have a contractor on your Dream Team, Greene suggests a few strategies for finding one:
(Shortform note: When working with a contractor, your first project will be the riskiest—that’s when you’ll discover the contractor’s working and management style and find out if they can deliver the work quality and timeline they promised. If the contractor finds an issue that they previously overlooked, like outdated plumbing, the repair could derail your budget. Additionally, if the contractor gets other jobs and prioritizes those projects over yours, you’re likely to go over deadline, which delays your rental income and refinance and also increases the risk of people noticing and breaking into your empty property.)
As you plan your rehab, Greene writes that you must be strategic about how you approach repairs and upgrades: Maximize the value of the property—to maximize both the appraisal when you refinance and the rents you can charge tenants—but be aware that there is a point of diminishing returns. If you turn your fixer-upper into a five-bedroom, custom-designed home, there will still be a ceiling to the property’s appraisal and rent values based on the neighborhood and other external factors. Consult your PM to find out about comps’ conditions and amenities to ensure that you prioritize upgrades that make your property competitive.
To strike this balance, Greene offers tips for various aspects of your rehab.
Don’t Forget Permits
Major renovations—including additions and certain plumbing and electrical upgrades—require municipal building permits. When planning your rehab budget and timeline, factor in the time and money needed to obtain the necessary permits. The costs, requirements, and waiting periods vary by municipality, but the process can take up to six weeks, with additional fees for expedited permits. In the permitting process, you must draw up plans for your project, submit those plans for approval along with your permit application, and schedule inspections at various stages of the project to ensure the work matches the approved plan and complies with building and safety codes.
Despite the hassle and expense, permits are critical to raising your property value: Any home improvements for which building permits are required but not obtained will be excluded from the home appraisal when you refinance or sell the property. That can completely derail your return on a BRRRR investment.
As soon as your property is rehabbed, Greene writes that it’s time to start renting it and creating cash flow. (Shortform note: Finding tenants quickly is also critical because many lenders require you to have renters before refinancing. Delaying this step not only postpones your cash flow but also your ability to recoup your investment.)
Since you don’t have much wiggle room in your rent prices at this stage—they’re largely determined by the property you bought and the success of your rehab—your priorities in this stage are to minimize vacancy and manage your property effectively.
Greene states that you can minimize vacancy by strategically setting your rent prices and lease periods and by keeping tenants happy.
As we discussed in Step 1, you should have consulted local investors, PMs, and rent calculators on websites like Rentometer.com and Biggerpockets.com to estimate your rent prices before buying your property. Greene recommends you set rent prices at the lower end of your estimate initially to attract tenants and fill vacancies quickly. Then raise rents to the higher end of that range during lease renewals—at that point, most tenants are willing to pay more to avoid moving.
Additionally, set your lease periods to expire during the spring or summer, when most renters are looking for homes. If your tenants move out, you’ll have more interest from prospective tenants and reduce the “turn time,” how long the unit sits vacant between renters.
Finally, don’t give your tenants reason to leave: Be accessible, responsive, and prompt with maintenance requests. (Shortform note: The implied warranty of habitability requires residential landlords to keep properties in “habitable” conditions throughout the lease period. Although the definition of habitability varies by state and jurisdiction, it broadly includes electricity, heat and hot water, drinkable water, a functional bathroom and toilet, and a smoke detector.)
Greene also suggests rewarding tenants (those who pay on time, maintain landscaping, and keep the property in good condition) by discounting their rent raises during lease renewals. Although you lose some money in the lost rent, these tenants save you money in maintenance costs and city code violations.
Screen Your Tenants
The tenants who will contribute most to your income are those who cause minimal property damage and stay for many years (and rent increases), saving you lost earnings during vacancies and the time and money required to advertise and fill vacancies. Increase your chances of finding a good tenant by screening interested candidates.
Require references from past landlords and employers. Ask landlords if the renter paid on time and kept their property in good condition. Ask employers if the renter is reliable and verify that they’re still employed.
Run a credit check to find out if the tenant has filed for bankruptcy or faced prior evictions.
Ask for current pay stubs to ensure that the renter makes enough to cover rent.
Complete a background check of local, state, and federal records.
While screening applicants, avoid violating Fair Housing Laws by maintaining consistent screening requirements (ideally posting them with the advertisement for the rental) and steering clear of questions about the renter’s age, sex, race, religion, disability, native language, or familial status.
When it comes to managing your property—from responding to maintenance requests to handling lease renewals and evictions—you can do it yourself or hire a property manager (PM). Although Greene recommends having a PM on your Dream Team, you don’t have to use them to manage your property (they can still be a valuable member of your team, for example, by offering advice about the best neighborhoods to buy investment properties).
He lists the pros and cons of each option:
| Property Manager | Self-Management | |
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