Bridge, Rental and Build
The BRRRR Method, Explained Properly
Short-term capital is a timing tool. This guide covers one of the timings.
Bridge, Rental and Build
The short version, then the substance.
Key Takeaways
- The five letters
- Where hard money fits
- Where BRRRR goes wrong
The five letters. Buy, rehab, rent, refinance, repeat. Buy distressed with short-term money, renovate, place a tenant, refinance into long-term debt at the new value, and pull your capital back out for the next one. Done right, one pile of cash builds a portfolio.
Where hard money fits. The buy and the rehab. Banks will not fund the distressed purchase, and that is the entire entry point of the strategy. A 12 month hard money note covers acquisition and renovation, then the refinance retires it.
Where BRRRR goes wrong. Overpaying at the buy and overestimating the refinance appraisal. The strategy forgives neither. Buy at a real discount, renovate to rental standard not flip standard, and model the refinance at a conservative value before you ever close.
The South Texas angle. Averlend underwrites this every week in Corpus Christi and across Nueces County. If you are working a deal in downtown or anywhere else in the metro, the theory above comes with a local desk attached: see our Corpus Christi lending page or send the deal directly.
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