5 BRRRR Mistakes That Will Wipe Out Your Returns

BRRRR looks bulletproof in a spreadsheet — buy at 65% of ARV, rehab, refinance at 75% LTV, recover all capital. In practice, five common failure points consume most novice deals.

First, overpaying at acquisition. Second, underestimating rehab by 20–40%. Third, appraising lower than expected. Fourth, seasoning requirements delaying refinance. Fifth, rate environments that push debt service above sustainable rent levels.

Model each of these as downside scenarios in your underwriting. A deal that only works in the base case is not a deal — it is a hope.