The BRRRR strategy
BRRRR (Buy-Rehab-Rent-Refinance-Repeat) is the rental portfolio building strategy that recycles capital across multiple deals. Hard money financing for the acquisition and rehab phase; long-term DSCR refinance after stabilization. The refinance proceeds become the down payment for the next deal.
Top BRRRR lenders for Chicago
Renovo Financial is the largest Chicago-based hard money lender. Founded 2011, they've closed thousands of loans across the Midwest and have particularly deep penetration in Chicago, Indianapolis, and Milwaukee. Strong relationships with the local broker community make them a default first-call for many Chicago investors.
Kiavi (formerly LendingHome) is one of the largest hard money lenders by volume in the country. Tech-forward platform with online application and fast underwriting for experienced borrowers. Active across Chicago and all major investor markets.
Lima One Capital is one of the deepest non-QM lenders in the country with a full product suite spanning fix-and-flip, BRRRR, rental, and new construction. Particularly strong on the rental refi exit, which makes them a one-stop shop for BRRRR strategies.
Easy Street Capital has one of the more flexible non-QM platforms in the market, with particular strength in short-term rental DSCR underwriting (counting projected nightly revenue rather than long-term lease income).
LendingOne is an established national non-QM lender with deep coverage across hard money and rental products.
RCN Capital is a national non-QM lender with capacity for larger transactions and strong experience on multi-unit and small commercial deals.
BRRRR strategy by Chicago submarket
The strategy works differently across Chicago submarkets:
- South-side cash flow markets: Chatham, Auburn Gresham, South Shore — Strong Section 8 cash flow, modest appreciation.
- West-side gentrification: Humboldt Park, Austin — Mix of cash flow and appreciation potential.
- Northwest 2-flat belt: Belmont Cragin, Albany Park, Portage Park — Strong 2-flat BRRRR economics.
- North-side premium: Tight cash flow margins; appreciation drives returns.
Frequently Asked Questions
BRRRR is Buy-Rehab-Rent-Refinance-Repeat — a real estate investing strategy that uses short-term financing for acquisition and rehab, then refinances into long-term DSCR (Debt Service Coverage Ratio) financing after stabilization. Capital is recycled into the next deal.
Phase 1: Hard money loan for acquisition + rehab (typically 9.5-12.5% interest, 1-3 points, 12 months). Phase 2: DSCR refinance into 30-year amortized loan at 75-80% LTV after stabilization (typically 7.5-9.5% rate). The DSCR refi returns capital to recycle.
Lima One Capital, Kiavi, Renovo Financial, and Easy Street Capital all offer both hard money acquisition and DSCR rental refi — making them effective one-stop BRRRR programs.
5-12 months total: 1-3 months acquisition, 3-6 months rehab, 1-3 months stabilization and lease-up, then refinance.
DSCR refi at 75% LTV against stabilized value. If you all-in for less than 75% of stabilized value, you can pull 100%+ of your capital out. Many Chicago BRRRR deals don't hit this ratio — typical "cash left in deal" runs $10-50K per property.
Yes, particularly in south-side neighborhoods (Chatham, Auburn Gresham, South Shore) and west-side neighborhoods (Belmont Cragin, Humboldt Park, Albany Park) where acquisition prices are reasonable relative to rents.
2-flat and 3-flat properties typically produce the best BRRRR economics due to higher rent-to-price ratios. Single-family also works in cash-flow markets.
You can either (a) hold longer with the hard money loan extended (typical extension fees apply), (b) refinance at lower LTV (leaving more cash in the deal), or (c) sell. The DSCR ratio is calculated as gross rent divided by PITI — lenders typically want 1.0+ DSCR minimum.