RE Investing: How to BRRRR in a Seller’s Market

Real estate investors love formulas. Spreadsheets, acronyms, neat little rules of thumb—the whole toolbox. But what happens when the market stops cooperating with the classic playbook?

That’s exactly the problem this episode of Selling Greenville tackles: how investors who want to build a rental portfolio can still use the BRRRR strategy—even when the market clearly favors sellers.

Instead of throwing up his hands at tight inventory and rising prices, the host walks through a different way of thinking about equity, appreciation, and timing that lets investors stay active without insisting on unicorn deals that almost never appear.

BRRRR in a Seller’s Market

The focus here is simple but specific: how to BRRRR in a seller’s market without relying on fantasy math or once-in-a-decade deals.

First, he defines the classic BRRRR method—spelled out as:

• Buy

• Rehab (or renovate)

• Rent

• Refinance

• Repeat

It’s a strategy designed for people who want to build multiple rentals, not just one vacation home or a casual Airbnb. The whole point is to recycle capital: put money into a distressed or underpriced property, force appreciation through repairs, refinance based on the new higher value, get cash out, and roll that into the next deal.

The “Perfect” BRRRR Example

He gives a straightforward example of how BRRRR works on paper:

• An investor buys a property for $100,000.

• They put $30,000 into rehab.

• Total all-in cost: $130,000.

• After the rehab and based on rents and condition, the property is worth $200,000.

• It rents for something like $2,000 per month.

A bank then looks at the after-repair value (ARV) and typically lends up to 80% loan-to-value on a rental. On a $200,000 property, that’s $160,000.

Since the investor only has $130,000 in the deal, the refinance not only wipes out what they’ve spent—it actually creates about $30,000 in extra capital they didn’t have before. The rent still easily covers the new mortgage payment, and they’ve pulled out funds to go hunting for the next property.

That’s the textbook version. And in a vacuum, it’s powerful. But there’s a catch: it assumes the investor can actually buy properties that cheaply.

Why the 70% Rule Breaks Down in a Seller’s Market

A lot of investors pair BRRRR with the famous 70% rule.

In short, the 70% rule says:

Never spend more than 70% of the ARV minus repair costs.

So if a home will be worth $100,000 after repairs and needs $20,000 in work, the rule says you shouldn’t pay more than $50,000:

• 70% of $100,000 = $70,000

• $70,000 – $20,000 repairs = $50,000 max purchase price

That’s a fantastic purchase… in theory. In practice, there are only two ways to consistently pull that off:

1. Off-market deals with motivated sellers

• These might come from mailers, cold calls, or wholesalers who specialize in finding people with equity and a reason to sell at a discount.

• But even they face heavy competition and need to work constantly just to find a few deals.

2. On-market deals in a true buyer’s market

• Ten years ago, when the market favored buyers, it was sometimes possible to let a fixer sit, then come in with a low offer close to that 70% number.

• In today’s seller’s market, that kind of discount is rare.

Right now, standard on-market listings almost never line up with the 70% rule. Sellers have options, investors are competing with each other, and properties that could fit the classic BRRRR numbers usually draw multiple offers—or get snapped up before anyone can negotiate that deeply.

So the question becomes: if the “perfect” BRRRR formula assumes deep discounts, how can an investor still build a portfolio when deep discounts are almost impossible to find?

Rethinking BRRRR: Low-Equity, Delayed Refinance

This is where the episode pivots to a twist on the traditional model: what he calls a “low equity delayed refinance” approach to BRRRR.

He makes a key observation:

There are two ways to end up with equity in a property:

1. Get it up front by buying far below ARV (the classic 70% rule).

2. Let it grow over time by buying in an area with strong appreciation and holding.

In a seller’s market, that second path is often much more realistic.

Property A vs. Property B

To show how this works, he compares two hypothetical properties, both with an ARV of $200,000:

Property A – Classic 70% Deal

• All-in cost (purchase + rehab): $140,000

• Starting equity: 30% ($60,000)

• Market appreciation: 5% per year

• After five years, the value rises to around $243,000

• Equity grows to about 42.4%, or roughly $103,000

Property B – Low Equity, Strong Appreciation

• All-in cost (purchase + rehab): $180,000

• Starting equity: 10% ($20,000)

• Market appreciation: 12% per year

• After five years, the value rises to roughly $315,000

• Equity grows to about 42.8%, or around $135,000

So even though Property B starts in a weaker position—only 10% equity instead of 30%—it ends up in a stronger place. The appreciation, fueled by choosing the right area, does more work than the initial discount ever did.

Both properties land at roughly the same equity percentage, but Property B’s owner holds tens of thousands more in actual equity dollars. And importantly, a Property B–type deal is usually much easier to find in a seller’s market than a pristine 70% deal.

That’s the core of how to BRRRR in a seller’s market: sometimes it’s smarter to accept lower initial equity in exchange for being in a zip code, neighborhood, or submarket that’s shown consistent 12–15% yearly appreciation—especially when the goal is long-term buy-and-hold.

Debt, DTI, and the Bank’s Point of View

Of course, none of this works without financing. The episode spends time on the bank’s perspective, too.

Lenders don’t just look at the property; they look at the borrower’s DTI (debt-to-income ratio). He gives a simple illustration:

• Say someone has $5,000 in monthly debt payments.

• Their monthly income is $10,000.

• That’s a 50% DTI.

Most banks start getting nervous well before that. Once a borrower’s DTI moves beyond the mid-30% range, approvals get trickier. Some banks might stretch into the low 40s if the borrower has strong credit and a good track record with rentals, but it’s not guaranteed.

There are more flexible lenders who will ignore standard DTI limits in exchange for:

• Higher down payments, and

• Higher interest rates.

That might work for some investors, but it does change the math and reduce cash flow. So even in a clever BRRRR setup, debt levels still have to be managed carefully.

A Real Greenville Example: Quadplex to Cash-Out

This isn’t just a theory in the episode. There’s a real-world example of the low equity delayed refinance approach in action.

Years ago, the host purchased a quadruplex for $158,000 in an area that, at the time, wasn’t considered especially exciting. Conventional wisdom said it had “low upside.”

The market proved otherwise. Over several years, that quad’s value climbed to nearly $300,000.

Run that through the usual refinance logic:

• 80% of $300,000 = $240,000 potential new loan

• The existing note is around $90,000

• That leaves up to $150,000 in available equity to pull out, depending on the appraisal

With a cash-out refinance, that equity can now be recycled into more deals—either as:

• Down payments on additional rentals, or

• Fuel for another BRRRR-style cycle on new properties

Crucially, he points out that this approach lets an investor keep the original asset and grow the portfolio, instead of selling through something like a 1031 exchange. For the right investor, that’s a big win: more doors, more cash flow, and still access to capital.

BRRRR vs. 1031: Two Roads to Growth

The episode briefly contrasts this BRRRR-based refinancing approach with a 1031 exchange, where an investor:

• Sells a property,

• Uses an intermediary,

• Buys a replacement property within specific timelines,

• Defers capital gains taxes on the new asset.

There’s nothing wrong with that path—it can be a powerful tool. But it also means giving up the original property.

By contrast, the BRRRR-style cash-out model keeps the original building in the portfolio while still turning trapped equity into deployable capital. For investors who like their long-term holds and believe in the area’s future, that can be a more appealing way to grow.

The Investor Mindset in a Seller’s Market

A subtle but important theme in the episode is mindset.

Investors who insist on only buying with deep equity today—no projection, no trust in appreciation, no willingness to look at trends—often find themselves stuck. They run the numbers, decide nothing ever works, and never actually close.

Others are willing to:

• Study market appreciation trends,

• Target areas that have shown 15–20% annual growth in recent years,

• Accept lower initial equity in exchange for strong long-term upside.

For those investors, how to BRRRR in a seller’s market comes down to patience and precision:

• Be selective about neighborhoods.

• Be realistic about initial equity.

• Plan on delayed refinancing once appreciation has done its work.

• 
  

It’s not about throwing caution to the wind—banks, DTI, and cash flow still matter. But it is about being flexible enough to use the market’s strength, not just complain about it.

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Bottom Line

BRRRR isn’t dead just because the market favors sellers. It just looks different.

Instead of chasing perfect 70% rule unicorns that rarely show up on the MLS, investors can adapt by:

• Targeting appreciating areas,

• Accepting lower initial equity,

• Letting time and market growth build their position, and

• Using delayed cash-out refinances to repeat the process.

In other words, the strategy hasn’t changed at its core—buy, rehab, rent, refinance, repeat still works. What’s changing is where the equity comes from and when it shows up.

For long-term rental investors willing to think beyond the first year’s spreadsheet, that shift can be the difference between sitting on the sidelines and steadily building a portfolio, one smart BRRRR at a time.

Ien Araneta

Journal & Podcast Editor | Selling Greenville