The BRRR Method Made Simple (and Actually Doable) for First-Time Investors

Consulting Team
Aug 20
4 min read

Buy. Rehab. Rent. Refinance. Repeat.That’s it. Five letters, one powerful system to build a rental portfolio without needing a Silicon Valley trust fund. Below is your crisp, step-by-step playbook—built for first-timers, stress-tested by pros, and streamlined by SLB Consultants so you can execute with confidence.

TL;DR: Your 60-Second BRRR Checklist

Buy below market with clear comps and a real rehab plan.
Rehab to the neighborhood standard (no gold toilets).
Rent quickly to quality tenants at market rate.
Refinance at ~70–75% LTV based on after-repair value (ARV).
Repeat with your cash back and better terms.

Step 0 (Yes, Zero): Get Your Money + Team Lined Up

Before you ever write an offer:

Money options

Hard/Private Money for purchase + rehab (common on BRRR #1)
Cash + Credit Lines (HELOC, business LOC) for speed + flexibility
Gap Funding to cover down payment/closing if HML doesn’t do 100% all-in
Refi Target: Conventional, portfolio bank, or DSCR lender (uses rent to qualify)

Minimum team

Investor-friendly agent, contractor, property manager (even if you plan to self-manage), lender(s), title/closing attorney, insurance broker, inspector, appraiser (via lender).

SLB Pro Tip: Talk to your refi lender before you buy. Seasoning rules and LTV caps can make or break your numbers later.

Step 1: Buy Right (ARV Backwards)

You don’t buy for today—you buy for your future appraisal.

Your guardrails

ARV: Proven by 3–5 recent, nearby comps (same bed/bath/sqft condition).
Max Offer (quick sanity check):Max Offer ≈ (ARV × 0.75) − Rehab − Closing/Holding cushion(Adjust the 0.75 based on your target LTV and market.)

Underwriting snapshot

Neighborhood rents support your future DSCR ≥ 1.20 (more on that below).
Property has no deal-killers: foundation, sewer, major structural surprises.
Clear exit: your refi lender is comfortable with property type and area.

Step 2: Rehab for Appraisal & Rentability

You’re not flipping to HGTV—you’re upgrading to “neighborhood standard” so the appraiser and tenants say “yes.”

High-ROI priorities

Safety/compliance first (electrical, roofing, water, egress).
Kitchens/baths (mid-grade finishes), flooring, paint, lighting.
Mechanicals (HVAC/plumbing) if near end-of-life.
Curb appeal (landscaping, exterior paint, entry).

Execution tips

Write a scope with SKUs and per-room line items.
Use progress-based draw schedules with your lender.
Document everything: before/after photos + invoices (your appraiser loves receipts almost as much as your accountant).

Step 3: Rent Fast, Rent Right

Speed = lower holding costs. Quality tenant = fewer headaches.

Rent-up checklist

Price at market (check 3–5 active comps + leased comps).
Pro photos, online applications, written criteria (credit, income, eviction checks).
Target lease start aligned with your refi timeline (month-to-month can spook lenders).
Keep proof: executed lease, first month’s rent, deposit receipt—your refi underwriter will ask.

Step 4: Refinance on the New Value

This is where the magic happens: you replace the short-term money with a long-term loan based on the ARV.

Typical refi terms (varies by lender)

LTV: ~70–75% of appraised value
Seasoning: 0–12 months depending on program (ask early)
DSCR Loans: Many lenders want DSCR ≥ 1.20 using market rent vs. PITIA

Quick DSCR math

DSCR ≈ (Gross Rent × 0.75) / PITIAWhere PITIA = Principal + Interest + Taxes + Insurance + HOA (if any)

Documents to expect

Final rehab invoices + photos
Lease + rent ledger or 1007 rent schedule
Insurance, taxes, HOA details
Entity docs + operating agreement (if in an LLC)

Step 5: Repeat (with Systems)

You now have a playbook. Turn it into a machine:

Keep a “BRRR Binder” (digital is fine) with your scope template, lender list, and checklists.
Track KPIs: cash left in deal, DSCR, cash flow per door, rehab days, vacancy days.
Rinse and duplicate—same team, faster cycle.

A Simple Example (Numbers You Can Copy)

Deal Snapshot

Purchase: $150,000
Rehab: $40,000
Closing + Holding Cushion: $10,000
All-in Cost: $200,000

After Repair Value (ARV): $260,000Refi at 75% LTV → New loan ≈ $195,000Cash left in deal ≈ $200,000 − $195,000 = $5,000

Monthly performance (illustrative)

Rent: $2,400
P&I (30-yr @ ~6.75% on $195k): ≈ $1,265
Taxes + Insurance: $350
Management (8%): $192 (if you self-manage, this can be $0)
Maintenance/CapEx (10%): $240
Vacancy (5%): $120

Total expenses with management ≈ $1,265 + $350 + $192 + $240 + $120 = $2,167Cash flow ≈ $2,400 − $2,167 = $233/moSelf-managed scenario (skip mgmt fee): ~$425/mo

DSCR check (lender view):

PITIA ≈ $1,265 + $350 = $1,615
DSCR ≈ (2,400 × 0.75) / 1,615 ≈ 1.11 (borderline)
At $2,600 rent, DSCR ≈ 1.21 (more lender-friendly)

Takeaway: Either buy with a stronger ARV spread, reduce taxes/insurance, or target rents/units that comfortably clear 1.20. We’ll help you structure it.

Common Rookie Mistakes (Skip These, Keep Your Sanity)

Buying the wrong comp set. Your ARV dies when you compare apples to mangoes.
Over-rehabbing. You’re building a rental, not a spa.
Ignoring seasoning rules. Some lenders won’t use new value for X months.
Underwriting on “wishful rent.” Use real comps and a DSCR test.
Forgetting holding costs. Interest, utilities, insurance—budget them or bleed.

Your BRRR Toolkit (Copy/Paste)

Pre-Offer

✅ 3–5 comps with ARV
✅ Rehab scope + bids (line-item)
✅ Lender call for refi criteria (LTV, seasoning, DSCR)
✅ Insurance + taxes estimate
✅ Exit strategy if appraisal comes in low

During Rehab

✅ Permits pulled (if needed)
✅ Progress photos + invoices saved
✅ Weekly punch-list and timelines

Rent-Up & Refi

✅ Lease executed + rent ledger
✅ Rent comps printed/saved
✅ Final photos + cost log
✅ Appraisal access notes for the lender

How SLB Consultants Can Help (Shameless, but useful)

Deal Triage: We review your ARV, scope, and DSCR before you commit.
Funding Stack: Private/hard money for purchase & rehab + streamlined refi options.
Process Guardrails: We flag soft spots (seasoning, appraisal gaps, draw schedules) before they become headaches.

Ready to BRRR without the burnout? Book a consult or submit your deal and we’ll help you blueprint the numbers and line up the money—so you can go from “first” to “repeat” on autopilot.