The BRRRR method -- Buy, Rehab, Rent, Refinance, Repeat -- is one of the most effective portfolio-building strategies in real estate investing. Done correctly, investors can recycle the same capital across multiple acquisitions, building a portfolio of cash-flowing rental properties with minimal net capital tied up in each deal. The financing stack -- specifically how you fund the buy and rehab, and how you structure the DSCR refinance -- is what determines whether the strategy actually works.
The BRRRR Financing Stack
Each phase of BRRRR requires a different financing tool:
Step 1: BUY -- Bridge Loan or Fix-and-Flip Loan
Acquisition of distressed property. Fast close (7-14 days). Asset-based -- qualifies on property value and ARV, not borrower income. Funds up to 85-90% of purchase price. Rate: 9-13%. Term: 12-18 months.
Step 2: REHAB -- Draw Schedule on Bridge Loan
Renovation funded through draws on the bridge loan as work is completed. Inspector verifies completion before each draw is released. 100% of renovation costs typically fundable within the bridge structure.
Step 3: RENT -- Stabilize the Property
Place a tenant before refinancing. Most DSCR lenders require 6 months of seasoning from the purchase date. Use this time to complete rehab, place tenant, and document rental income.
Step 4: REFINANCE -- DSCR Cash-Out
After 6+ months, refinance at new appraised value (post-renovation). No W-2s or tax returns required. Access equity created by renovation. Pay off bridge loan. If deal was structured correctly, you recover most or all of your initial capital.
Step 5: REPEAT -- Deploy Recovered Capital
Use cash from DSCR refinance to fund next BRRRR acquisition. Property remains in portfolio, generating cash flow. Cycle repeats.
BRRRR Math -- How the Numbers Work
A simplified BRRRR example in a Florida or Ohio market:
- Bridge loan: 85% of $150K = $127,500 (you bring $22,500 + rehab funds)
- Post-renovation appraisal: $250,000
- DSCR cash-out refinance at 75% LTV: $187,500
- Bridge loan payoff: $127,500
- Cash recovered at DSCR closing: $187,500 - $127,500 - closing costs = ~$50,000+
- Net capital remaining in deal: $22,500 down - $50,000 recovered = capital recovered plus profit
- Ongoing: Property cash flows monthly on a 30-year DSCR loan
DSCR Refinance Requirements for BRRRR
The DSCR refinance is the critical exit from bridge financing. Requirements:
- Seasoning: 6 months minimum from purchase date (delayed financing exceptions exist)
- Occupancy: Property should be rented or demonstrably rentable
- DSCR: 1.0 minimum at new loan amount and post-renovation rent level
- Credit score: 620+ minimum
- LTV: 75-80% of post-renovation appraised value
- LLC vesting: Available -- close DSCR refi in same LLC as bridge
BRRRR in Florida vs Ohio
Both Viador Partners markets are active BRRRR markets:
- Ohio (especially Columbus and Cleveland): Lower acquisition costs, higher cap rates, stronger post-renovation DSCR ratios. A $150K distressed property can become a $220-250K renovated rental. BRRRR math works well in Ohio.
- Florida (Tampa Bay, Orlando, Jacksonville): Higher acquisition costs but strong ARV premiums in improving neighborhoods. BRRRR works best in markets with clear value-add opportunity and strong rental demand. Insurance costs need careful modeling.
Frequently Asked Questions
The BRRRR strategy requires two financing instruments: (1) a bridge or hard money loan for the acquisition and renovation phase, and (2) a DSCR loan for the refinance phase. The bridge loan closes fast, funds the rehab, and then the DSCR loan pays it off at a higher appraised value -- allowing capital recovery.
Most DSCR lenders require 6 months of seasoning from the purchase date before allowing a cash-out refinance. Some lenders allow delayed financing exceptions for properties purchased cash or with bridge financing, potentially reducing the wait. Plan for 6 months minimum.
Yes. The bridge loan qualifies on the asset -- no income required. The DSCR refinance qualifies on the property rental income -- no W-2 or tax returns required. Self-employed investors and those without W-2 income can execute full BRRRR cycles through these loan types.
Yes, particularly in markets with clear value-add opportunity and strong rental demand: Jacksonville (most affordable distressed inventory), Tampa Bay (improving neighborhoods in Brandon and Riverview), and Orlando (Osceola County). Insurance costs in Florida require careful modeling -- factor actual insurance quotes into your BRRRR exit DSCR calculation.
Yes. Viador Partners originates both bridge/fix-and-flip loans and DSCR refinances. Working with one lender for both sides of the BRRRR cycle means no re-explanation of the deal at refinance time, continuous communication, and an advisor who knows your portfolio.