What Does BRRR Stand For?
The acronym BRRRR is an abbreviation often used in property investing. It stands for Buy, Refurbish, Rent, Refinance, Repeat.
BRRRR is a type of property investment strategy that involves buying properties that require refurbishment, doing them up, renting them out and then refinancing to release some (or all) of the invested capital.
Read our full article explaining the BRRRR method.
How BRRRR Is Actually Financed
The refinance step is where the strategy either works or stalls, and it is governed by lender rules rather than by the numbers in your spreadsheet.
Most lenders apply a six month rule. For the first six months of ownership they will lend against the price you paid, not against the new valuation. A smaller number will refinance at value on day one where genuine refurbishment work has been carried out and can be evidenced with invoices, a schedule of works and before and after photographs.
Refurbishment gives a valuer a far clearer basis for an uplift than a claimed discount does, which is why a BRRRR refinance lands more reliably than a straight below market value purchase. The usual structure is a bridging loan to buy the property and fund the works, then a term refinance onto a buy to let mortgage once the property is let and the six months have passed.
Budget for the bridging interest across the whole refurbishment and letting period, not just the build. Voids, a slow valuation or a delayed tenancy are what turn a workable BRRRR into an expensive one.
« Back to Glossary Index