Updated: August 5, 2026
You've overheard trendy real estate investors talk about BRRRR (Buy, Rehab, Rent, Refinance, Repeat). You get the basic concept and you're more than a little BRRRR curious. This is a tried and tested method for making sure you're getting the most out of your investment property. If you want to learn how to BRRRR too, how do you get started?
What Is the BRRRR Method?
Finding deals on houses with "good bones" in great locations lies at the center of the BRRRR method. Investors treat these rental properties almost like house flips, using industry knowledge and careful accounting instead of guesswork. Knowing what to look for, and where to find it, is how you spot those diamonds in the rough. From there, the process breaks down into five steps.
Step 1: Buy (Research Properties)
Colorado has dozens of thriving areas, each with their own personality, that make for great real estate investment locations. You shouldn't have much trouble finding a project that fits your budget in a location you like.
Do you currently own investment property? If not, do your research and consult with experts who are well versed in good investment property, not just ones with "good bones." (What does that even mean, anyway?) Narrow your search before you waste time driving around looking at duds. An investment real estate expert can help you identify the types of projects that fit your portfolio goals.
Once you know what you're looking for, understand property values well enough to negotiate confidently when you find it. Experts generally recommend the 70% rule: aim to finance no more than 70% of a property's after-repair value, minus your estimated rehab costs. That discount is what creates the equity that makes the whole strategy work.
Step 2: Rehab (Understand Rehabbing Costs)
Ready to shed some blood, sweat, and maybe a few tears? If you plan to do any of the rehabbing yourself, honestly assess your skill level first. Letting your ego take on more than you can actually handle will cost more in the long run, especially once you need to call in professionals to fix whatever went wrong to pass building code inspections.
If you know you'll need help, get estimates from reputable contractors who actually call you back. Skilled friends who owe you a favor also make great contacts, if you can get them to call you back too. Knowing your limitations and getting real estimates for professionally done work will save you from yourself and keep you within budget.
Also, know the right level of amenities to use. There's no sense spending $300,000 on a house worth $250,000. Unless you plan to deal exclusively in luxury rentals, those high-end finishes only chip away at your return on investment.
Step 3: Rent
Once your rehab is done, this is where the investment starts to pay off. Getting high-quality tenants who pay solid rent into your property makes Step 2's sacrifices worth it. By determining the right rent rate, you can cover the mortgage and clear some profit each month.
Most investors stop here. BRRRRers take things further.
Step 4: Refinance
Let's say you found a diamond in the rough, rehabbed it, and now have renters happily living in your new investment property. That house you bought for a steal and improved strategically has increased in worth, and an appraisal will confirm it. Time to refinance.
Most lenders will cash-out refinance up to around 75% of the new appraised value, which lets you pay off your original mortgage and walk away with a chunk of change to put toward your next project. One thing that's changed in recent years: conventional lenders like Fannie Mae now generally require you to own the property for a full 12 months before a cash-out refinance, longer than the 6-month window investors used to count on. Many BRRRR investors get around this by using DSCR loans instead, which qualify based on the property's rental income rather than your personal finances and can allow a refinance in as little as 3 to 6 months, usually at a somewhat higher rate. Know your lender's seasoning period before you buy, not after.
Step 5: Repeat
With a solid purchase and a well-timed refinance, you now have the capital to start the process all over again. Each cycle brings new lessons and opportunities to improve your systems, and ideally, more passive income along the way.
Is BRRRR Still Worth It in Today's Rate Environment?
Investment property rates in 2026 run higher than they did a few years ago, typically in the 6.5% to 7.5% range. That means monthly cash flow on a lot of BRRRR deals is tighter than it used to be, sometimes close to breakeven right after the refinance. The strategy still works for building equity, capturing depreciation benefits, and recycling your capital into new deals. It just requires more conservative math up front than it did in a lower-rate market, so budget carefully and don't assume the numbers will work themselves out.
Scaling Challenges
Repeat this cycle enough times, and you may find yourself with a completely different problem: keeping up. Having a handful of rental properties where you serve as the landlord might be doable as a full-time gig. Having more than that can quickly become overwhelming, especially if you also hold a full-time job. Building wealth for the future shouldn't mean running yourself into the ground right now to do it all yourself. All work and no play makes for a burnt-out landlord and a lousy family member and friend. Don't be that person.
A good property manager can give you back your life and make your investment property a lot less stressful. Colorado Realty and Property Management, Inc. calls that rental property peace of mind. As a full-service realtor, we can also help you continue expanding your BRRRR property portfolio.
Are You BRRRR Curious?
Ultimately, investors who use the BRRRR method can grow their wealth with relatively little upfront capital of their own. They can also lose a lot if the numbers don't work out. Our advice? Do. Your. Research. Talk to lending experts, real estate and property management advisors, and other BRRRRers before you dive in.
Want to learn more about how to BRRRR in the Colorado area? Talk with leaders in investment real estate and property management in Colorado. Call us today at 303-665-7368.
