Complete BRRRR Method Financing Guide
Written by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
The BRRRR method is a real estate strategy: Buy, Rehab, Rent, Refinance, Repeat. It lets investors recycle the same capital into property after property, and Florida's mix of affordable and appreciating markets suits it well.
This guide explains the financing at each stage, from the initial purchase loan to the cash-out refinance that frees your capital. Mortgage Capital, NMLS# 1859012, finances every stage of BRRRR deals in Florida.
Buy: acquisition financing
The first stage often uses hard money or a short-term loan to buy a distressed property fast, since these deals move quickly and the home may not qualify for conventional financing in its current condition.
Cash and private lenders are also common at this stage. The goal is to acquire below market value with room to add value.
Rehab: funding the work
You renovate to raise the property's value and make it rentable. Hard money loans can include a rehab budget released in draws as work is completed.
Stick to improvements that add appraised value and rent appeal. Over-improving for the neighborhood wastes capital.
Rent: stabilizing income
Once renovated, you place a tenant. A signed lease and rental income are what let you refinance into a long-term loan, especially a DSCR loan that qualifies on cash flow.
Stable occupancy also proves the property's income to the appraiser and lender.
Refinance: pulling capital out
A cash-out refinance, often a DSCR loan, replaces the short-term financing with a long-term mortgage and returns much of your invested capital based on the new, higher value.
The better your rehab raised the value, the more capital you recover to fund the next deal.
Repeat: recycling capital
With your capital returned, you buy the next property and run the cycle again. This is how investors scale without saving a fresh down payment each time.
Florida's appreciating markets can amplify the equity you create, but run conservative numbers so a flat market does not trap your capital.
Complete BRRRR Method Financing Guide: step by step
Frequently asked questions
What is the BRRRR method?
A strategy to Buy, Rehab, Rent, Refinance, and Repeat, recycling the same capital into multiple rental properties.
How do I finance the buy stage?
Often with hard money, a short-term loan, or cash, since distressed properties may not qualify for conventional financing.
What loan do I use to refinance?
Commonly a DSCR cash-out refinance, which qualifies on the rental's cash flow and returns much of your invested capital.
How much capital can I recover?
It depends on how much your rehab raised the value. A strong value increase lets you pull out more in the refinance.
Does BRRRR work in Florida?
Yes. Florida's mix of affordable and appreciating markets suits the strategy, though you should run conservative numbers.
How does the rehab get funded?
Hard money loans can include a rehab budget released in draws as work is completed and inspected.
Why rent before refinancing?
A signed lease and rental income let you refinance into a DSCR loan that qualifies on the property's cash flow.
What is the main risk of BRRRR?
A flat market or a low appraisal can leave your capital trapped. Conservative projections protect against that.