BRRRR Loans: Finance the Flip, Then Refinance Into a Rental Loan

BRRRR financing combines a separately underwritten acquisition and rehab loan with a later rental refinance.

Buy, renovate, rent, refinance, and repeat describes the operating sequence, not a promise of recycled equity. At purchase, you need an acceptable basis, a defined scope, and cash to execute. At refinance, you need supported value, acceptable property condition, documented income, and a loan that can repay the existing debt. The refinance is a fresh decision. We do not treat the earlier approval as proof that the permanent exit will qualify.

The Fix & Flip program can finance up to 95% LTC plus 100% of rehab, capped at 75% of supported after-repair value and $5M, subject to underwriting.

Its rates are starting at 9.00%, subject to underwriting, with a 12-month term. Purchase proceeds and approved rehab draws serve different purposes. Draws reimburse verified work rather than creating an unrestricted reserve for operations.

Write the scope for a rental you can maintain, not a resale finish package that adds cost without supporting rent. Keep contractor bills, change orders, and completion records organized. You will need cash for carrying costs and the interval between paying for work and receiving a draw. A refinance plan does not pay those obligations while the building is still under renovation.

A DSCR refinance replaces the renovation debt when the finished rental's income, value, and condition meet the separate program requirements.

DSCR financing offers up to 80% LTV, a 30-year term, and a maximum loan of $5M. Rates are starting at 6.50%, subject to underwriting. Cash-out refinance is available, but net proceeds depend on the approved amount, existing payoff, costs, and other conditions.

Rent is evaluated against debt service and included housing expenses, not against your preferred payment. Taxes, insurance, and association dues can change the result. Ownership requirements, accepted rental documentation, and any interest-only option are confirmed per deal. The useful target is sustainable replacement debt, not extracting equity at the expense of the property's ability to carry itself.

Planning the DSCR refinance before acquisition exposes repayment gaps while you can still change the purchase decision.

Run the rental plan against supportable rent and current expense information. Compare the expected new loan with the renovation loan payoff and closing costs, then identify any cash shortfall. Ask what property condition and income records the eventual request needs. If leasing takes longer or the appraisal supports less than expected, decide how you would cover the difference. We prefer an exit with alternatives to a model that works only when every assumption lands exactly on target.

Read why we ask investors to plan the DSCR refinance before closing rather than treating it as an afterthought.

BRRRR deals break when supported value, rental income, or rehab execution cannot carry the planned refinance.

A lower appraisal can leave less debt available to pay off the renovation loan. Rent that looks attractive in an advertisement may not support the payment after accepted taxes and insurance are included. A longer rehab increases carry and can leave little room to lease before the short-term debt matures. An extension is not assumed. Track the remaining budget and exit readiness during construction instead of waiting until the contractor leaves to discover the refinance gap.

Submit a BRRRR scenario with both the renovation plan and the intended rental exit so we can review the transition, not just the acquisition.

Provide the address, purchase terms, scope, budget, expected finished value, estimated rent, taxes, insurance, association dues, borrower details, and available cash. Distinguish existing evidence from projections. Tell us whether the property is occupied and what must happen before it can be rented legally. Indicative terms follow review of the submitted scenario; the eventual refinance remains subject to its own underwriting, appraisal, and approval.

Use the deal form and identify the rental refinance as your intended exit.