BRRRR Method Loans, how they work and where to get them

Brrrr Method Loans

Many people are interested in getting a loan for rental property using the Brrrr Method, but don’t know what they should be looking for. With so many options available, it can be hard to find the right one. In this blog post, we will go over everything you need to know about loans for rental property including Brrrr loans, what types of loans are available and which ones might work best for you!

Whats a Brrrr loan?

Buy, Rehab, Rent, Refinance, Repeat is how it works! This is the Brrrr Method and this strategy allows you to obtain the property, fix it up, rent it out, and refinance. And if you bought it for the right price in the beginning you will be able to get all of your upfront costs out in the refinance limiting all or most of the money invested in the property.


To obtain the property in the first place your loan will depend on how much work the house needs. If it needs work your either going to need to pay cash or get a hard money loan. If it does not need much work, then a conventional rental loan will suffice.

If your lucky enough to have the cash then that is the easiest way to purchase. Of course you could also use home equity lines or other lines of credit if you have access to them.

If you dont know what hard money is , it is a loan that can be used to purchase fixer uppers, but they do have their own set of issues. Hard money lenders don’t usually put as much emphasis on your credit score or other factors like this because they are typically lending on the value of the real estate. Saying that, usually you will need at least a 650 credit score to get approved.

Hard Money Loans are more expensive than other loans and you will need at least 20% down payment because the interest rates tend to be higher as well – usually between 12-20%. Typically hard money lenders want there investment secured well and your 20% down gives them piece of mind that you will repay.

Seller Financing/Owner Carry Back Hard Money Loan

Another option for funding is the seller carry back. The way this works, you purchase a home from an owner and then agree to pay them monthly or annually until you have paid off the entire amount that they are asking for. These loans can be structured in any number of ways.


The hard money loan usually covers the purchase of the house and all of the rehab budget. That is, if you have an accurate rehab plan and don’t run in to too many unexpected repairs. However, there is a catch. There often times will be an expense limit on the rehab budget and you cannot go over that amount without their approval.


At this point, you should have a fully rehabbed property ready for a new tenant. Research carefully to make sure you are asking for the maximum allowable rent for your area taking in to account location and quality of your property compared to others in the area. You can research other rental units in the area with craigslist, facebook marketplace and


Once you have the rental property and it is fully renovated, your next step will be to refinance. You can get this from a local bank or one of many online lenders.


Now you can do it all over again! Repeat the Brrrr Method cycle as many times as you wish.

Thats the process of Brrrr loans!

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