The BRRRR strategy — Buy, Rehab, Rent, Refinance, Repeat — is one of the most powerful wealth-building strategies in real estate investing. And hard money loans are the fuel that makes it work. Here’s exactly how to use hard money financing to execute the BRRRR strategy and build a rental portfolio with little to no money left in each deal.
What Is the BRRRR Strategy?
- Buy — Purchase a distressed property below market value using hard money financing
- Rehab — Renovate the property using the construction draws from your hard money loan
- Rent — Place a tenant and stabilize the property at market rents
- Refinance — Pay off the hard money loan with a DSCR or conventional cash-out refinance
- Repeat — Use the cash-out proceeds to fund your next deal
Why Hard Money Is Perfect for BRRRR
Hard money loans are ideal for the acquisition and rehab phases of BRRRR because they close fast, fund renovation costs, and don’t require the property to be in rentable condition at closing — unlike conventional loans which require a habitable property.
BRRRR Example Deal
Purchase price: $80,000
Rehab cost: $35,000
ARV: $160,000
Hard money loan: $104,000 (65% ARV)
Out of pocket: $11,000 (down payment + closing costs)
After stabilization refinance at 75% ARV: $120,000
Cash out: $120,000 − $104,000 (loan payoff) = $16,000 back in your pocket
Monthly rent: $1,400 | Monthly cash flow: ~$350 after PITI
In this example, you recovered your initial $11,000 investment plus an additional $5,000 — and you now own a rental property that cash flows $350/month with virtually none of your own money left in the deal.
Best Hard Money Lenders for BRRRR
Not all hard money lenders are BRRRR-friendly. Look for lenders who offer longer terms (12–18 months), high LTC ratios to minimize your cash out of pocket, and a clear path to conventional refinancing. Our top picks for BRRRR investors are RCN Capital and Kiavi.