BRRR is an acronym for Buy, Rehab, Rent, and Refinance. There’s often another R added that represents Repeat. It is an investment strategy that starts with purchasing and fixing a distressed property that needs substantial work to get up to building codes and to make it ready to rent. That usually involves considerable renovation work. That’s followed by renting the property. The refinance step involves a cash-out long-term loan that allows the investor to withdraw their equity and use that cash to purchase another property. That’s also when a repeat can be added to the acronym.

A BRRR loan is a short-term loan designed to support this investment strategy. For example, a fix and flip bridge loan can cover the first phases, followed by a long-term DSCR (debt service coverage ratio) rental loan to obtain the equity put into the property and finance the rental income. 

BRRR loans are available from hard money lenders and banks. They can take the form outlined above as a short-term bridge loan while the property is renovated, followed by a long-term rental loan once the property provides rental income. Or there are single-close loans where a hard money lender provides all the funds needed for purchase, renovation, and renting in one lump sum.