What does BRRR mean in REHABILITATION

BRRR stands for Buy, Rehab, Rent and Refinance. It's an acronym that describes the process of purchasing a property with cash or equity if available, fixing it up as needed and then refinancing to get back much of the original purchase costs.

The basic concept behind BRRR relies on leveraging the renovated property's improved value to pay off much of the original cost of purchasing it. When an investor buys a below-market-value property with cash or equity money they can use to finance it further down the line if necessary, they can fix it up and rent it out while refinancing the loan in order to regain much of their initial investment along with potentially earning profit from rents received.

There are multiple benefits associated with using BRRR as an investment strategy. Firstly, by renovating a property before refinancing allows for borrowers to take advantage of potential tax deductions in regards to rehabilitation expenses incurred during repairs or renovations made on said property. Additionally since purchase costs can be paid back post-refinancing investors may also be able to access non-recourse refinancing which carries no personal liability risk in regards to repayment if tenants fail to pay rent or otherwise violate terms outlined in the lease agreement between them and landlord/investors.

As with any form of real estate investing there are certain risks that must be taken into account when considering this investment strategy such as market values fluctuations which could cause a decrease in valuation estimate appraised pre-refinancing meaning that higher interest rates may need to be paid due later on when obtaining financing through banks or other lenders after rehabbing AND market changes that could lower rental income generated from properties financed through this method.

In general residential multiunit rental properties have historically been most beneficial due to their high potential earnings through monthly rents received but single family residences (SFR) as well as mixed use commercial/residential buildings both can still yield profitable returns using this type of strategy depending on local market conditions.