How to Apply the BRRRR Strategy Step by Step 

Want to build a real estate portfolio without saving for each down payment?

That’s the power of BRRRR: a proven strategy that allows you to recycle your investment capital and grow your holdings faster than traditional methods.

At SBGroup, we guide investors through each phase of the BRRRR method to minimize risk and maximize return. In this blog, you’ll learn how to apply it correctly in the U.S.—step by step.

What Is BRRRR?

BRRRR stands for:

1. Buy

2. Rehab

3. Rent

4. Refinance

5. Repeat

The goal? Use the same initial capital to buy multiple properties over time by extracting equity after increasing value through improvements and rental income.

Step 1 – Buy Below Market Value

📌 Look for distressed or underpriced properties with upside potential.
Key tactics:

• Off-market deals

• Foreclosures

• Motivated sellers

• Probate and code violations

✅ SBGroup Tip: Always calculate after-repair value (ARV) before making an offer.

Step 2 – Rehab to Increase Value

Focus on renovations that:

• Raise the property’s appraisal value

• Improve rental appeal and rentability

• Lower ongoing maintenance costs

⚠️ Avoid over-improving—stick to what boosts ROI.

Step 3 – Rent to Generate Cash Flow

Once rehab is done:

• Place a qualified tenant

• Use professional property management

• Document lease terms and income

📊 Important: This step proves income stability to lenders for the next stage.

Step 4 – Refinance to Extract Equity

Now you refinance based on the new, higher value of the property.

Types of refinancing:

• Cash-out refinance (most common in BRRRR)

• DSCR (Debt-Service Coverage Ratio) loans

• Bank or credit union portfolio loans

✅ Goal: Get most (or all) of your initial capital back.

Step 5 – Repeat the Process

With your capital back, you’re ready to:

• Buy the next deal

• Use lessons learned

• Expand your team and process

📌 This is how real estate becomes a repeatable wealth system, not a one-time investment

Common Mistakes to Avoid

❌ Overpaying on the first deal
❌ Underestimating rehab costs
❌ Poor tenant screening
❌ Trying to refinance too soon
❌ Not understanding lending requirements

The BRRRR method is not just a buzzword—it’s a strategic system.
But to make it work, you need the right numbers, people, and timing.

At SBGroup, we walk you through every stage, from market selection to lender connections—so you can scale with confidence.