If you want to build a rental portfolio but don't have unlimited cash to put 20% down on every property, the BRRRR method might be your answer.
Josh, a private money lender and owner of 65 rental properties, recently walked Foraker agents through the exact strategy he used to scale his portfolio without tying up all his capital.
What Is BRRRR?
BRRRR stands for:
- Buy a property below market value (usually one that needs work)
- Renovate to force appreciation
- Rent it out to generate cash flow
- Refinance based on the new, higher appraised value
- Repeat using the cash you pull back out
The key is that you're creating equity through renovation, not just waiting for the market to appreciate. Once the work is done and the property is worth more, you go to a bank and get a long-term loan based on that new value—often pulling most or all of your initial capital back out.
Why This Works
Josh explained that the first deal he ever bought was on the market. He paid $50,000 for a property that needed work, put in $25,000, and when it was done it was worth $125,000. That's $50,000 in forced equity.
Today, that same property would be worth $150,000—but he noted that it's much harder now to find deals on the market with enough
