BRRRR Strategy Financing
BRRRR Loans for Real Estate Investors
Total Quality Lending’s DSCR cash-out refinance powers the “Refinance” step in BRRRR — recycle equity into the next deal without conventional loan friction.
What is BRRRR?
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat — a real estate investing strategy that recycles the same dollars of investor capital across multiple properties. You buy distressed at a discount, force appreciation through renovation, stabilize the property with tenants, refinance to pull your capital back out, then deploy it into the next acquisition.
The strategy lives or dies on the refinance step. That’s where TQL’s DSCR cash-out refinance comes in.
The 5 BRRRR steps — and where TQL fits
An honest map of which steps we finance and which steps you need other capital for.
- 1
Buy
Acquire below market — often with cash, hard money, a private loan, or a DSCR purchase loan at acquisition. The goal is to buy at a basis low enough that, after rehab, the after-repair value (ARV) supports a refinance that returns most or all of your capital.
How TQL fits: TQL DSCR purchase loans (up to 80% LTV at top tier, FICO 640+) work at acquisition when the property already cash-flows. For deep-discount distressed buys that don't cash-flow today, most BRRRR investors use hard money or cash here.
- 2
Rehab
Add value via renovation — kitchens, baths, mechanicals, flooring, exterior. The renovation must lift the property's appraised value enough to justify the refi math. Track every receipt; the appraiser and lender will both want them.
How TQL fits: TQL does NOT fund the rehab step. DSCR loans are long-term permanent financing — they don't disburse rehab draws. Pair with hard money, private capital, a HELOC on another property, or your own cash for this step. We're ready when the rehab is complete and the property is rentable.
- 3
Rent
Place a tenant and stabilize. For a DSCR refinance, the property needs to be leased (or rent-ready with a market-rent appraiser opinion of value). Lease + first month's rent collected is the cleanest path.
How TQL fits: A signed lease at market rent, plus evidence of rent collection, supports the DSCR ratio underwriting uses to size your refinance. Short-term rentals (Airbnb / VRBO) qualify too — we use 12 months of STR history or AirDNA market data.
- 4
Refinance
Replace your acquisition / rehab capital with a long-term DSCR cash-out refinance. This is the step that recycles your money into the next deal. Get this step right and BRRRR works. Get it wrong (over-leveraged, under-rented, or wrong seasoning treatment) and you're stuck.
How TQL fits: TQL DSCR cash-out refinance — up to 80% LTV at top tier (740 FICO at $2.5M loan, or 720 FICO at $1.5M loan). Critical: 0–6 month ownership uses the LESSER of (purchase price + documented improvements) or appraisal. After 6 months of ownership, full appraised value is used. Cash-in-hand caps: $500K at LTV >65%, $1M at LTV ≤65%.
- 5
Repeat
Deploy the cash-out proceeds into the next acquisition. The whole point of BRRRR is that the same dollar of investor capital cycles through multiple deals — each property becomes self-funding once you've successfully refinanced.
How TQL fits: No 10-property cap (conventional Fannie Mae caps you at 10 financed properties; we don't). Returning-client underwriting fee is waived. Same underwriter handles deal 1 and deal 11.
BRRRR advantages with TQL
- DSCR cash-out up to 80% LTV (at top FICO + loan tier) recycles maximum equity per deal
- No personal income docs — your portfolio's growth doesn't disqualify you
- LLC vesting allowed — keep the strategy off your personal credit
- 15-day close speed lets you cycle deals faster
- No conventional 10-property cap — keep stacking
- Cash out may be used to satisfy your reserve requirement
Ownership seasoning — the refinance value rule
This is the single most important rule in BRRRR underwriting. Get the seasoning treatment wrong and your refinance comes in lower than your model predicted.
| Scenario | Value Used | Note |
|---|---|---|
| 0–6 months of ownership | LESSER of (purchase price + documented improvements) or appraisal | This is the standard non-QM rule. Track receipts on every rehab dollar — they directly increase your refinance basis. |
| >6 months of ownership | Full appraised value | Most BRRRR investors wait the 6 months when possible because the appraisal-based value typically beats (purchase + improvements). |
| Renovation Cash-Out exception (under 6 months) | Appraised value may be used | When the property was purchased and renovated per appraiser inspection with SSR (sales subject to repair) ≤ 2.5. See full guidelines for documentation requirements. |
DSCR cash-out matrix — how much can you pull?
Maximum cash-out LTV depends on your FICO and loan size. 80% is reserved for the top tiers — the matrix below shows the real numbers.
| FICO | Loan amount | Max cash-out LTV |
|---|---|---|
| 740 | $2.5M | 80% |
| 720 | $1.5M | 80% |
| 700 | $1M–$1.5M | 75% |
| 700 | $2M | 70% |
| 660 | $1M | 70% |
Cash-in-hand caps
Total equity withdrawn cannot exceed $500K when LTV is above 65%, or $1M when LTV is at or below 65%. These caps apply to the final cash to borrower at closing.
BRRRR loan — FAQs
Does TQL fund the rehab step?
No. DSCR loans are long-term permanent financing — they don't disburse construction or rehab draws. The rehab step is funded by hard money, private capital, a HELOC on another property, or cash. TQL comes in at the refinance step (step 4) once the property is rehabbed, leased, and rent-ready.
What's the seasoning requirement for the refinance?
0–6 months of ownership: refinance uses the LESSER of (purchase price + documented improvements) or appraised value. After 6 months: full appraised value is used. There's a Renovation Cash-Out exception that may allow appraised value under 6 months when the property was purchased and renovated per appraiser inspection with SSR ≤ 2.5. Keep every rehab receipt — they directly raise your basis under the 0–6 month rule.
How much equity can I pull out?
Up to 80% LTV at the top tier (740 FICO + $2.5M loan, or 720 FICO + $1.5M loan). Lower FICO and smaller loans cap at 75% or 70% LTV. Cash-in-hand caps: $500K when LTV exceeds 65%; $1M when LTV is at or below 65%. Total equity withdrawn cannot exceed these limits.
What FICO score do I need for BRRRR refinancing?
Minimum FICO is 640 with DSCR ≥ 1.00. Top-tier 80% cash-out requires 720+ FICO at $1.5M or 740+ FICO at $2.5M. 700 FICO caps at 75% LTV cash-out for $1M–$1.5M loans. 660 FICO at $1M caps at 70% LTV cash-out.
Can I BRRRR inside an LLC?
Yes. DSCR loans accept LLC vesting at closing — single-member, multi-member, series, and holding LLCs all qualify. Title can be in the LLC's name from the refinance step forward, keeping the rental and its debt off your personal credit.
How fast can the refinance close?
Most TQL DSCR cash-out refinances close in 15–21 days from a complete file. Faster is possible when the appraisal turns quickly and the entity docs are ready upfront. Returning clients get the underwriting fee waived.
Run the BRRRR refinance math with us
Send us the purchase price, rehab spend, and target rent — we’ll quote the cash-out refi in 24 hours.