Posted on: March 29, 2022
WI 917 | BRRRR Method


Wholesaling means buying great and selling good. And if you want to go the classic route, why not consider the BRRRR method? Of course, every real estate deal is unique, and there’s no promise that this negotiating trick will work with every seller. But with the right seller in the right place at the right time, the odds are that this approach eventually will give you shiny deals. If you’re not yet convinced, then give this podcast a go.

What Exactly Is The BRRRR Method And How To Use It To Build Passive Income And Legacy Wealth

We know that finding discounted properties is the most proven path to financial freedom and let’s face it. We all want financial freedom and security, but few of us have been taught how to build long-term wealth while still earning an income. The truth is owning rental property is the best, most effective way to increase your income and build legacy wealth fast.

In this show, you will discover how to take control of your finances and make your money start working for you. I am here to show you how to build long-term wealth and cashflow while paying less in taxes through owning rental properties. Stop trading your time for money and get off of the transaction treadmill.

In this episode, we are going to be talking about the BRRRR Method. What it is, why you would want to use the BRRRR method, and how you can get started using the BRRRR method right away. If you are unfamiliar with the BRRRR method, it is an acronym. It is a strategy that I have been using for several years exclusively to buy over probably 250 properties at this point.

The B

It is a strategy that allows us to acquire assets with little to none of our own money. It is my favorite strategy when it comes to real estate. It is my favorite thing in real estate, hands down. Let’s talk about it, break it down, and explain it. Again, it is an acronym. It starts with a B, and it has four Rs behind it. The first letter B stands for Buy.

In the BRRRR method, we are going to have to buy a property first. That is the main thing that we are going to need to do. We are going to want to find a property that we can get a discount on, and that is important. As you know, from wholesaling, this is a marketing business. We are trying to find sellers that are motivated so we can get these properties under contract at good deals.

It is the same thing when you are buying rental property. You do not want to pay retail for properties. I have not paid retail in probably close to 700 transactions. Since I learned about wholesaling, I have never bought property retail since. When you are buying rental properties, you want to maintain the same mindset of buying properties at a discount. It is incredibly important, especially if you want to do this like I do and use little to none of your own money. Buying at a discount is step number one.

Wholesaling is a marketing business. You’re trying to find motivated sellers so you can get your properties under contract at good deals.

The First R

Once you buy a property, we are going to move on to the first R in the BRRRR method. That stands for Rehab or Renovate either way. It is the same thing. We are going to find a deal and buy a property at a discount. Next, we are going to go and fix this property up. We are going to increase the value of these properties by rehabbing them or renovating them. This is going to increase the value of the property. It is also going to allow us to get more rent or get the highest amount of rent possible.

We are always looking to get market rent or even above. The beautiful thing about when you rehab a property prior to renting it is you can usually get a market rate or, in some cases, you can get higher than the market rate because the property looks great. When we are rehabbing properties, we are typically going in and spending about $20,000 to $25,000 on these rehabs.

Sometimes we can get away with $5,000, $10,000, maybe $15,000. Other times, it may be a little bit more expensive, and it may cost $25,000, $30,000, or $35,000 but I typically do not like buying rentals that need more than $30,000 or $35,000 worth of work. You may have a different strategy, but I like to keep my rental rehabs around $20,000 to $25,000.

The first B is to Buy at a discount. The first R is to Rehab or Renovate the property. This is going to allow you to get a high appraisal on it when it comes to refinancing later and get the highest rent possible. Additionally, it is going to rent much faster if it has got a fresh coat of paint, maybe new flooring, a new kitchen, or a new bath. I’m typically putting new roofs on my houses when I’m rehabbing them and new countertops.

The Second R

I love replacing HVACs, windows, and roofs. Those three things specifically, because it is three phone calls. I call a roofer, HVAC tech, and my window company. Sometimes that might make up 50% of my rehab. What we are going to do is we are going to move to the next R in our acronym, BRRRR. The next R is going to stand for Rent. It is that simple. We are going to buy a discount. We are going to fix it up with rehab.

Next, we are going to rent the property out. If you want to be your own property manager, I suggest that is where you start. That is where I started. I did it on my own for about then years. You are going to find a good tenant that you can rent the property to. If you have bought it at a discount, you have built-in equity. If you have rehabbed it, you have increased the value of the property creating even more equity and now you are going to rent this property out to a great tenant.

WI 917 | BRRRR Method

BRRRR Method: Once you find a deal and buy a property at a discount, you’re going to fix this property up and increase its value by rehabbing or renovating it.


Find yourself a tenant that has got good credit, no history of evictions, bankruptcies, foreclosure, or anything like that. Hopefully, you can get a good family in there, and you are going to rent that out. You find that person, use online marketing, and have them sign a lease. You collect a deposit on the first month’s rent and you give them the keys. It is that simple. Let’s not overcomplicate this.

The Third R

The next R in our BRRRR method acronym is to Refinance. I do not like using any of my own money when I’m doing the BRRRR method or buying rental properties with the BRRRR method. The beautiful thing is that you do not have to have a ton of your own money involved. In fact, I borrowed the purchase price and the rehab from my private and hard money lenders. I probably owe my lenders anywhere from $1 million to $3 million because I have 10 or 15 projects somewhere in the BRRRR method at any given time.

Another great thing about this method is you are not limited to doing one at a time. You can scale this method and have 10, 15, or 20 of these going at the same time. I’m moving over into the refinance stage of the BRRRR method. What I’m looking to do is I looking to find a local bank or a local credit union that will allow me to refinance.

Notice, I did not say purchase. I’m saying refinance. The reason I like to refinance is because the underwriting is going to be way easier and shorter to get through than the purchase. Banks do not like to create new risks, but they do not mind transferring risks. That is the goal. It is transferring the risk, not creating a new risk.

That is why I personally like to buy all of my properties with cash from a private or a hard money lender. I create a note, and I owe money on that. When I go to refinance, I take that information to the bank or the credit union, I’m using local ones typically, and I will say, “I got at this property. Here is what I paid for it and put into it. I think it should now appraise for this amount.” What I’m looking to do with my banks and my credit unions is I’m looking to get a loan that is based on the appraisal and the appraisal only.

I do not even tell the bank anymore what I bought my property for. I know I said that. I take that back. In the beginning, I used to, but at this point, when I go to a bank, I’m saying, “I got this property. I fixed it up. It is rented. It is bringing in this amount of rent. I would like to refinance this loan.” The bank says, “Dave, we can’t wait to do another deal with you. Let’s send our appraiser out to the property and get it appraised.” That appraiser comes back to the bank, and the bank will lend me 70%, 75%, or even 80% of what it appraises for.

Let’s do some simple math. Let’s say I buy a property for $80,000. I go and put that $20,000 worth of rehab into it. I’m all-in to this property for $100,000. If this property appraises for $130,000 or $140,000 after I bought it at a discount, I rehabbed it, went to, got it rented, and the bank is going to lend me 75% or maybe even 80%. That is great news because that means that I’m going to be able to pay back my lender for the purchase, the rehab, all of my holding costs in between, and even include the interest that I would owe that private or hard money lender.

Leverage is your best friend. It is what makes the BRRR Method strategy possible.

When I do my appraisals and get a loan, I’m getting a loan based upon what it appraises for. I am not getting a loan based on what I am all in it for. If you think of it this way, 80% of what you are all in it for, no matter what that number is going to be a positive number, 80% of a $100,000, you are going to leave $20,000 in there. If you can get an 80% loan on what it appraises for, and you are all in for less than that number, you can acquire a rental property with none of your own money. How amazing is that? That is awesome. I have done this strategy over 200 times in five years alone. I love it.

BRRRR is nothing more than an acronym. It is a B with four Rs behind it. The first one stands for buy, and you want to buy at a discount. You guys know that from reading this blog post, that is what wholesaling is. It is buying great and selling good so do not stop doing that. You are going to buy great and you are going to keep it this time.

The first R in the strategy is the Rehab or the Renovate. One thing I want to point out here is when you go to the bank and you want to get a loan based on the appraisal, a lot of banks may have a minimum requirement of updates, renovations, or rehab that they may require in order for them to give you a refinance loan based on the appraisal and the appraisal alone. Go talk to your local banks or local credit unions and figure out what that minimum is.

Some of my banks are $18,000, some of them are $20,000, others are $25,000. I do not want to go get a loan based upon a percentage of what I’m all in. Instead, I want to get a loan that is a percentage of what it appraises for because I’m typically all in for less than that. That is the beautiful thing. The first R is Rehab. The second R is Rent, and that is the fun part.

Your property is already all fixed up. It looks nice, clean, new, and pretty. You can bring over some tenants, and you can say, “This is going to make a great home for you. All I need is the deposit, the first month’s rent, do a credit check, a background check, and assuming everything checks out, you can have the keys and move in now or tomorrow.”

The third R is the Refinance. That is where this comes full circle and the refinance is where you go get that loan. As I mentioned, it is based upon what it appraises for. If you are all in for less than the 70%, 75%, or 80%, that your local bank is willing to lend on that appraisal, again, that is how you are going to be able to do this with little to none of your own money.

The Last R

The last R in the BRRRR method is Repeat. Some people even refer to this method as the BRRRS method. Instead of having a fourth R, it is B with three R’s and an S. They use that as a Scale. Repeat and scale are the same thing at the end of the day. You are going to want to buy at a discount. You are going to want to rehab, which is going to increase the value even more. You are going to rent it out, and then you are going to go to a local bank, get it appraised and refinance that lender out.

WI 917 | BRRRR Method

BRRRR Method: You don’t want to get a loan based upon a percentage of what you’re all in. Instead, get a loan that’s a percentage of what it appraises for.


The outcome here, assuming that you are all in for less than what they are going to lend you, is that you can acquire a cashflowing asset at that with little to none of your own money. I have done hundreds of these and had none of my own money in them in the end. I refinanced three and I did not have $1 invested in these after refi. It is amazing.

A Few Things To Remember

A couple of things, guys, it is so incredibly important to buy at a discount. If you are buying deals retail, it is very difficult to be all-in in the end after your purchase and your rehab at 75% or 80% of what it is going to appraise for. Buying at a discount is so incredibly important. Rehabbing the property is important because it is going to increase the value of that appraisal.

When your appraiser comes out, and they see that the property is tip top and everything is shiny, clean, and new, they are going to give you a healthy appraisal on it. It is important to do the rehab. It is also important to find out what your local banks are going to require in terms of the rehab. That way, when you go to try to get a refinance down the road, they are not saying, “What did you buy this thing for? What did you put into it? We are going to give you 75% or 80% of that number.” “No, I want to get 75% or 80% of what it appraises for. What do I have to do to get that loan?” They are going to typically say, “Great, no problem. We need to see that you have done at least this amount of updates and repairs.”

Put yourself for a second in the shoes of the banker. Why would the banker require that? It is simple. The banker is going to require a minimum amount of rehab or renovations to reduce and mitigate their own risk. If I go to a bank and I get a loan or a refinance for a property, but for whatever reason, I do not pay them, they have to foreclose on you.

This has never happened, but it can. If that property needs $20,000 worth of work, it is going to be difficult for that bank to go ahead and sell it and get their money back. If that property looks great and it is in tip-top shape, you have reduced the risk the bank is taking on by giving you a loan. By doing that and by reducing their risk, that is when they are able to say, “We will send the appraiser out, we will get it appraised, and we will give you a loan based on the appraisal. We no longer care as much about what you paid for it.”

I have mentioned a couple of times now, 70%, 75%, or 80%. The reason that it is not always the same percentage is because each bank that you work with may have different guidelines or appetites for certain asset classes or for certain types of loans. It also is going to affect the percentage of your loan depending on the area you are buying. Is it a good area? Is it a bad area? Does it have low crime? Does it have high crime? Are the school is good or bad? These factors may affect the percentage in which they’re going to lend.

I do not typically buy properties in C, D, and F class areas. I like to stick to the B and the C-plus areas. Some Cs but mostly season Bs. By doing that, the banks say, “That is a good part of town, good schools, low crime, we will happily lend you 80% on these deals.” Whenever you start getting into the higher crime and the lower valued neighborhoods, the bank may want to reduce their risk. As I mentioned with the rehab, they may also want to reduce their risk and say, “We will end 75% in that neighborhood.” In some cases, I have even seen them say, “We will do this deal, but we are not loving this street, this neighborhood, or this school district, so we will happily do a 70% loan.”

Turn your bankers into your coaches.

I’m typically shooting for the 75% or even 80% and you should do the same because leverage is our best friend. Leverage is what makes this whole strategy possible. We are using other people’s money to buy, rehab, even holding costs and interest on that loan. It is all typically going to be paid back at the time of refinance. I love it.

BRRRR Method Requirements

The BRRRR method is such an amazing strategy. Anybody and everybody can do it. The only requirements are that you have to have decent credit. It does not have to be great, but you have to have decent credit and you have to be lendable. You have to be able to get approved for a loan. The first thing that I always suggest anybody and everybody do, if they are interested in buying rentals and using the BRRRR method, is go talk to your local bank and get pre-approved.

If you get pre-approved, great. Maybe even go talk to 2 or 3 banks and get pre-approval so you can hit the ground running. When it comes time to get through the entire process and you are at the refinance stage, you are not going to have any headaches or hiccups, but check this out. If you get all the way to the bank or your local credit union, and you say, “I’m looking to use this BRRRR method strategy and buy some rental properties, I would like to get pre-approved before I hit the ground running.” They say, “Unfortunately, we are not going to be able to lend you.”

Guys, it is okay. I still, to this day, get turned down by certain banks. Go talk to more banks and other banks. If they turn you down, ask them, “Why did you turn me down?” I like to turn my bankers into my coaches because I will say, “How do I get pre-approved if you are not going to do that now?” What they are going to do is they are going to say, “Dave, you need to get your credit score up a little bit. You need to fix your debt to income ratio. You need to pay your credit cards down.” Whatever it may be. Do not get discouraged. If the banks won’t lend to you now, figure out what you need to do so you can get a loan next month or the month after. Turn these bankers into your coaches. It is that simple.

The last thing is repeat. The coolest part about the last thing is you can do this over and over again. As of now, I believe I probably have somewhere between 12 and 15 properties that are somewhere in the BRRRR method. Somewhere in the buying stage, the rehab stage, the renting stage, or even waiting to be refinanced by one of my local banking partners. I love this strategy. If you guys want to learn how you can do this yourself, come work with me. Book a call over on Thanks for reading.


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About David Dodge

David Dodge is a real estate coach, author, and investor with over 17 years of experience. David specializes in using the BRRRR Method to acquire Rental Properties with NONE of his own money and has taught others how to generate passive income using his systems.

He’s also the co-author of the book “The Brrrr Method” and currently has over 90 properties in his rental portfolio with a goal to grow to over 200 properties in the next 24-36 months.

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