BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. You buy a property below its potential — often with cash or short-term financing — renovate it to raise its value and rent, place a tenant, then refinance into a long-term mortgage based on the new, higher appraised value. If the refinance returns most of your original cash, you can deploy the same money into the next deal while keeping the first property as a cash-flowing rental.
The strategy lives or dies on the spread between all-in cost and after-repair value, and on the refinance actually appraising where you projected. The failure modes are predictable: renovation overruns, an appraisal that comes in light, rates rising between purchase and refinance, or rents that do not support the new loan's debt service. Many lenders also impose a seasoning period before they will lend on the new value. BRRRR compounds well when each step is underwritten conservatively — and compounds problems when it is not.