BRRRR — Buy, Rehab, Rent, Refinance, Repeat — is one of the most widely discussed strategies in residential real estate investing, and for good reason: done well, it allows an investor to recycle capital and scale a portfolio faster than a traditional buy-and-hold approach. Here’s how it actually works, and what to consider before using it.

The strategy starts with buying a property below market value, typically one needing renovation, and completing a rehab that brings it up to a competitive rental standard. Once the property is renovated and rented, the investor refinances based on the property’s new, higher appraised value — ideally pulling out most or all of the original capital invested, which can then be redeployed into the next acquisition.

When it works, BRRRR is powerful precisely because it reduces how much of an investor’s own capital stays tied up in each individual deal, allowing faster portfolio growth from a fixed amount of starting capital. But it depends on several things going right: an accurate purchase-price and rehab-cost estimate, a renovation that’s completed on time and on budget, and an appraisal that actually reflects the value the improvements created.

BRRRR tends to suit investors who are comfortable with renovation project management, or who have a trusted team — like an in-house Improvement & Maintenance division — handling that piece for them. It is generally not the right fit for investors seeking a purely passive, hands-off experience, since the rehab phase requires active oversight even when a professional team executes the work.