The BRRRR Method with On Market Properties: Complete Guide
The BRRRR method (Buy, Rehab, Rent, Refinance, Repeat) is the ultimate wealth-building strategy. Here's how to execute it using on market MLS properties no wholesalers or off market deals required.
Real BRRRR Example
On market BRRRR deal: Bought for $180K, invested $35K rehab, rented for $2,000/mo, refinanced at $260K (75% LTV = $195K loan), pulled out $170K cash, kept $15K invested, now earning $350/mo cash flow + building equity. Repeat!
Find BRRRR PropertiesWhat is the BRRRR Method?
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat—a strategy to build rental portfolio using minimal long-term capital.
The 5 BRRRR Steps:
BUY
Purchase below-market property (70-80% of ARV)
REHAB
Renovate to increase value ($20-50K typical)
RENT
Place tenant, establish rental history (6-12 months)
REFINANCE
Cash-out refi at 75% of new appraised value
REPEAT
Use pulled equity for next deal
Finding BRRRR Properties on MLS
Look for properties that meet these criteria:
Ideal BRRRR Property Profile:
Purchase price 70-75% of ARV: Leaves room for rehab costs + profit
Needs cosmetic work: Kitchen, baths, flooring, paint (predictable costs)
Good bones: Solid foundation, roof, HVAC, plumbing (no major systems)
Desirable area: Good schools, low crime (easier to rent + higher appraisal)
Strong rent comps: Verify $1,500+ monthly rent potential
Complete BRRRR Calculator
BRRRR Deal Example:
Step 1: BUY
- • Purchase price: $180,000
- • Down payment (20%): $36,000
- • Closing costs: $4,000
- Total to buy: $40,000
Step 2: REHAB
- • Kitchen: $12,000
- • Bathrooms: $8,000
- • Flooring: $6,000
- • Paint: $3,000
- • Misc/Contingency: $6,000
- Total rehab: $35,000
Step 3: RENT
- • Monthly rent: $2,000
- • Annual rent: $24,000
- • Vacancy (5%): -$1,200
- • Expenses: -$8,000
- • Mortgage P&I: -$8,400
- Annual cash flow: $6,400 ($533/mo)
Step 4: REFINANCE
- • New appraised value (ARV): $260,000
- • Refinance at 75% LTV: $195,000
- • Pay off original loan: -$144,000
- • Refinance closing costs: -$3,000
- Cash pulled out: $48,000
Step 5: REPEAT
- • Total invested: $75,000 ($40K buy + $35K rehab)
- • Cash recovered: $48,000
- Capital left in deal: $27,000
- Cash flow: $350/mo (after higher refi payment)
- Cash-on-Cash ROI: 15.6% on $27K
You now have $48K to repeat the process + a cash-flowing rental!
BRRRR Timeline
Find & Buy Property
Search MLS, analyze deals, make offers, close purchase
Rehab Property
Complete renovations (60-90 days typical for cosmetic)
Find & Place Tenant
Market property, screen tenants, sign lease
Season the Loan
Most lenders require 6-12 months rental history
Refinance & Pull Cash
Appraisal, cash-out refi, recover capital
Total timeline: 12 months per property
Common BRRRR Mistakes
❌ Mistake #1: Buying at Wrong Price
Purchase at 85-90% of ARV leaves no room for profit after rehab.
Solution: Target 70-75% of ARV max purchase price
❌ Mistake #2: Underestimating Rehab Costs
Budget $30K, spend $50K = no profit, can't refi.
Solution: Add 20% contingency, get 3 contractor bids
❌ Mistake #3: Property Doesn't Appraise
Expecting $260K appraisal, gets $235K = can't pull enough cash out.
Solution: Conservative ARV estimates, use recent sold comps
BRRRR Financing Options
Initial Purchase Loans:
- Conventional: 20-25% down, best rates
- Hard money: 10-15% down + points, short term
- Private money: Negotiate terms with investor
- HELOC: Use equity from existing property
Refinance Options:
- Conventional cash-out: 75% LTV max, 6-12mo seasoning
- Portfolio lenders: More flexible, relationship-based
- DSCR loans: Based on property cash flow, not income
Find Your Next BRRRR Deal
OnMarket CRM filters for perfect BRRRR candidates on MLS. Automatic ARV calculations, rehab estimates, and refinance projections—find deals faster.
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