BRRRR Financing: How to Fund Each Step of the BRRRR Strategy

The BRRRR strategy—Buy, Rehab, Rent, Refinance, Repeat—is one of the most powerful wealth-building tools in real estate investing.

But here’s the catch: BRRRR only works if you have the right financing strategy for every step.

From the initial purchase to the final refinance, each phase requires its own funding approach. Get it wrong, and your deal could stall. Get it right, and you’ve unlocked a repeatable, scalable path to financial freedom.

In this guide, we’ll break down how to finance each phase of the BRRRR method, which loan products work best, and how to stack them for long-term growth.

Step 1: Buy – How to Finance the Property Acquisition

Your goal here is to acquire the property fast, often at a discount—and usually in as-is condition.

✅ Best BRRRR Funding Options for Purchase:

1. Hard Money Loans

• Fast closings (7–14 days)
  
• Asset-based approval
  
• Often fund up to 85% of purchase + 100% of rehab
  
• Short-term (6–12 months)
  

2. Private Money

• Individual lenders (friends, family, investors)
  
• Flexible terms
  
• Minimal documentation
  
• Great for off-market deals
  

3. HELOC or Cash-Out Refi

• Tap equity from your primary home or another rental
  
• Use as cash to buy distressed properties
  
• Lower rates than hard money
  

4. Cash (if available)

• Makes offers stronger
  
• Ideal for quick-close auctions, estate sales, or wholesale deals
  

📌 Pro Tip: Many BRRRR investors combine hard money + a HELOC or gap funding to cover total project costs.

Step 2: Rehab – How to Fund Renovations

Your renovation budget depends on the scope, but even minor rehab needs funding. The key: fund the rehab without eating into your future refinance appraised value.

✅ Rehab Financing Options:

1. Hard Money + Rehab Draws

• Many lenders fund 100% of rehab with staged draws
  
• You front the first payment, then get reimbursed as work is completed
  

2. Private Capital

• Loans from other investors or partners
  
• Often more flexible and faster than institutional lenders
  

3. HELOC or Credit Lines

• Use revolving credit to fund labor, materials, or holding costs
  
• Pay off at refinance
  

4. Cash Reserves

• Great for small cosmetic updates
  
• Keeps control over timing and contractors
  

Step 3: Rent – Stabilize Cash Flow Before Refi

Once the rehab is done, you’ll lease up the property to generate income and support the refinance.

You may not need outside funding here, but cash reserves can help cover:

• Vacancy and marketing costs
  
• Lease-up bonuses or repairs
  
• First month of management fees
  
• Utilities or landscaping while vacant
  

📌 Lender Tip: Most refinance lenders want to see 1–3 months of stabilized rent before funding. Plan accordingly.

Step 4: Refinance – Pull Cash Out to Repeat the Process

Here’s where the magic happens. Once the property is stabilized and rented, you’ll refinance into long-term debt and pull out the equity you created through value-add improvements.

✅ Best Refinance Options for BRRRR:

1. DSCR Loans

• Based on property income, not personal income
  
• Great for self-employed or LLC-based investors
  
• Ideal for pulling equity out post-rehab
  
• Fast closings (2–4 weeks)
  

2. Conventional Loans

• Lower rates, but require W-2s, tax returns, and personal DTI
  
• Great for newer investors with solid W-2 income
  
• Must wait 6+ months in some cases (seasoning period)
  

3. Portfolio Loans

• Local banks or credit unions
  
• More flexible with underwriting
  
• May require banking relationship
  

4. Non-QM Loans

• Fall between DSCR and conventional
  
• Accept rental income, bank statements, or P&L instead of tax returns
  

📌 Appraisal Tip: Your refinance loan amount will be based on the after-repair value (ARV). Work with appraisers who understand investment properties and BRRRR outcomes.

Step 5: Repeat – Use the Recycled Capital Again

The final step is what makes BRRRR so powerful—you can reinvest the same capital over and over.

Ways to accelerate the repeat cycle:

• Line up your next deal while refinancing the current one
  
• Build relationships with repeat lenders and contractors
  
• Keep reserves ready from rental cash flow
  
• Track timelines and costs using a BRRRR project tracker
  

BRRRR Financing Timeline Example

Final Thoughts

The BRRRR method only works if you have a financing strategy built for each phase. Don’t treat it like a one-loan process. Each stage—buy, rehab, rent, refinance, repeat—has its own challenges and ideal tools.With the right mix of hard money, HELOCs, private capital, and DSCR refinance products, you can build momentum, recycle capital, and grow a rental portfolio with velocity.