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Is the BRRRR method still viable in this interest rate environment?

real estateinvestingBRRRR
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Dan_22
Joined:
20.11.2023
Posts: 2188
Topic Starter
16.02.2025 23:37
I have been reading a lot about the BRRRR strategy lately and it sounds like a great way to scale a portfolio without constantly needing new capital. However, with interest rates being where they are, I'm struggling to see how the numbers actually pencil out for cash flow after the refinance. Has anyone successfully executed this strategy in the last six months without having to settle for break-even cash flow? I'm looking for a step-by-step breakdown of how you handle the appraisal gap if the property doesn't force enough appreciation during the rehab phase.
11 replies in this topic
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Amelie_Z
Joined:
03.05.2023
Posts: 1081
08.03.2025 00:25
Honestly, BRRRR is much harder right now. Unless you are finding properties at deep discounts off-market, the debt service will eat your cash flow alive.
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Vic_S
Joined:
11.09.2020
Posts: 1180
02.06.2025 22:01
In reply to a previous post
I second that. The BRRRR method relies heavily on cheap leverage. With rates where they are, the 'Refinance' part of the acronym is where the deal usually dies.
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BlackCat
Joined:
19.05.2022
Posts: 1202
31.07.2025 14:37
In reply to a previous post
I closed on a duplex three months ago using this method. The trick is to focus on properties that need cosmetic work rather than structural. Keep your rehab budget tight and you can still make it work.
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Tony_M
Joined:
26.11.2021
Posts: 223
12.08.2025 07:02
In reply to a previous post
How did you handle the appraisal? That's my biggest concern. Did you have to bring cash to the table to cover the gap?
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wes_55
Joined:
28.07.2022
Posts: 1034
25.08.2025 08:55
In reply to a previous post
For the appraisal gap, I always get a pre-appraisal done before the final refinance. It costs a few hundred bucks but it saves you from being blindsided by the bank's numbers.
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BlackCat
Joined:
25.07.2024
Posts: 1413
27.09.2025 20:34
Is anyone actually seeing break-even cash flow as a success nowadays? That sounds like a nightmare waiting to happen with one major repair.
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Igor_Tech
Joined:
21.10.2023
Posts: 1840
28.09.2025 10:59
In reply to a previous post
It’s definitely not for the faint of heart right now. You really need to be buying at 60-65% of ARV, otherwise, the math just doesn't support the current mortgage rates.
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Yulia_M
Joined:
02.09.2025
Posts: 2296
28.12.2025 00:12
I've pivoted to owner financing instead. It allows for more creative terms and avoids the high interest rates of traditional lenders entirely.
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Lara_N
Joined:
23.03.2024
Posts: 1296
08.01.2026 07:16
In reply to a previous post
That's a great point. Owner financing is the secret weapon in this market for sure.
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monica_p
Joined:
18.07.2025
Posts: 401
04.02.2026 22:27
I'm sitting on the sidelines for now. I'd rather wait for the market to cool down a bit more than force a deal that barely breaks even.
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tech_geek
Joined:
12.08.2025
Posts: 1452
11.03.2026 00:44
In reply to a previous post
Waiting is a valid strategy too. Cash is king, and having liquidity when the market shifts is better than being over-leveraged on a bad deal.

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