I don’t quite understand the BRRRR method

[Owen Thornton]

Over and over I hear the BRRRR method, but I consistently stumble over it and grasp it a little but then the fundamentals are washed away by wordiness.

Could someone write a small list of each step. I don’t need much explanation on each subject, I would like to get a better picture of it’s overall works

[Neil Henderson]

Buy - At a discount. Let's say you buy a $50,000 foreclosure that has an After Repair Value of $100,000. Meaning, similar homes in the area, when fixed up, have sold for $100,000 or better over the last 6 months.

Rehab - The home needs to be fixed up. Let's say the rehab costs $25,000. You are now "all in" for $75,000.

Rent - You put the now, newly renovated home on the rental market and sign a tenant to a long-term lease (12 months or more)

Refinance - You go to a lender and ask to put a long term mortgage on the property. Most lenders will lend you up to 75% of the After Repair Value, in this case, $75,000. You have now paid yourself back the initial "all in" amount with the funds from the mortgage. The rental property has a 30 year fixed rate mortgage on it for $75,000 and is hopefully also cash flow positive.

Repeat - Since you have all (or most) of your original capital back, you can go do it again, and again, and again...