The BRRRR Method in 2026: What 99,035 Investor Cash-Out Refinances and the Six-Month Rule Say About Your Refinance

What the BRRRR method is, in loan terms

BRRRR stands for buy, rehab, rent, refinance, repeat. You buy a property that needs work, usually with a short-term loan; you renovate it; you lease it; you replace the short-term loan with a 30-year rental loan sized on the new appraised value; and you use any cash that comes back for the next purchase. Every guide explains the five steps. What decides whether a deal works is narrower and more mechanical: what the two loans cost, how much the refinance lender will lend against the new value, and when it will use that value. Those three things are in public documents, and this page reads them:

• The loans: the federal HMDA file, in which lenders above a size threshold report every mortgage they originate with its note rate, amount, term, combined loan-to-value ratio and purpose. We downloaded the nationwide 2024 and 2025 files and computed everything below (our arithmetic).
• The timing rules: the Fannie Mae Selling Guide and the Freddie Mac Seller/Servicer Guide for conventional loans, and what Kiavi, Lima One and Visio Lending publish on their own sites for DSCR loans.
• The math: a worked example whose rates come from that data, and a calculator that starts from the same numbers.

If you already own a rental and only want to refinance it, our guide to refinancing a DSCR loan covers prepayment penalties and break-even. This page is the whole cycle, from the first loan to the cash you get back.

Step 1 and 2: the buy-and-rehab loan

Most BRRRR purchases are financed with a short-term, interest-only investor loan: hard money, bridge or fix-and-flip, the names overlap. HMDA has no field for them, so we use the same definition as our hard money loan rates page: originated, conventional, first-lien, one-to-four-unit investment-property loans made for a business purpose, with no debt-to-income ratio and a term of 36 months or less.

Short-term investor loans in HMDA (buy and rehab leg)

We use the non-bank purchase median, 10.39%, for the worked example because a BRRRR acquisition loan is a purchase and most investors borrow it from a non-bank lender; banks and credit unions made 14.3% of these loans at a 7.5% median (hard money page). The 12-month term was the most common, and 88.5% of all short-term loans were interest-only. HMDA does not report points on these loans, so the example adds them separately.

One limit matters for BRRRR specifically. Regulation C excludes temporary financing, and its official interpretation says a loan is temporary financing “if the loan or line of credit is designed to be replaced by separate permanent financing extended by any financial institution to the same borrower at a later time.” A purchase-and-rehab loan written from the start as the first half of a planned refinance can therefore fall outside HMDA, while the interpretation says a short loan to buy, renovate and resell “is not temporary financing under § 1003.3(c)(3) merely because its term is short.” The short-term figures above describe the market for these loans; they may undercount loans made on a planned buy-then-refinance basis.

Step 3 and 4: the refinance, in the federal record

HMDA reports a loan as a cash-out refinancing (purpose code 32) when the lender “considered it to be a cash-out refinancing in processing the application or setting the terms,” under its own or an investor's guidelines (Regulation C, Supplement I, comment 4(a)(3)-2). Here is every such loan on investment property, with the same base filters as our investment property mortgage rates page: originated, conventional, first lien, closed-end, not reverse, one to four units, occupancy “investment property.”

US investment-property cash-out refinances in HMDA

Two numbers set the ceiling on how much a BRRRR refinance returns. Three out of four investor cash-outs closed at 75% CLTV or less, and only 1.2% above 80% in 2025. If your plan needs an 80% cash-out to get your money back, you are planning for the top 1-2% of the market. The median, 70%, is the safer planning number; 75% is what the more leveraged quarter of borrowers got.

Investor cash-out refinances by product, 2025

DSCR-type loans, the product most BRRRR investors refinance into because it qualifies on the property's rent, became the majority of investor cash-outs in 2025: 56.8%, up from 49.0% in 2024, and their number rose 61.8% (our arithmetic). Our DSCR loan explainer covers the product; the DSCR-type definition here is identical to the one on our investment-property and hard money pages, and the 2025 DSCR-type total, 152,049 loans at a 7.375% median, matches them.

DSCR-type loans by purpose: what a cash-out costs

The cash-out premium over a DSCR-type purchase loan was 0.125 points at the median in both years, and the cash-out loans sat 5 points lower on CLTV (70% against 75%). Refinances of both kinds were 53.4% of all DSCR-type loans in 2025.

Rate by CLTV band, DSCR-type cash-outs, 2025

The 70% to 75% band is the single most common outcome (36.8%) and costs 0.25 points more at the median than 60% or less. The few loans above 80% have a lower median, which we read as a different set of lenders and programs, not as cheaper leverage.

Who makes the refinance loan

Investor cash-out refinances by lender type, 2025

Lender type follows the method of our hard money page: the federal agency code in each lender's FFIEC institution record, where the 2025 filing guide reads “If Federal Agency equals 7, indicating a non-depository institution”, with lenders under the CFPB code split by whether the name contains “bank”. Banks do refinance investors (8,952 loans), but almost all of their cash-outs were not DSCR-type: banks made 1.2% of DSCR-type cash-outs. For the DSCR-type refinance the non-bank lender is the market.

The 10 largest investor cash-out lenders in 2025 (names as filed)

The 15 largest lenders made 45.1% of the 2025 cash-outs. Several of the largest, such as United Wholesale Mortgage and HomeXpress, lend mainly through brokers. Velocity Commercial Capital priced far above the rest (9.865% median at 60% CLTV).

The three lenders in our lender box

Kiavi, Visio and Lima One in HMDA, 2025

Kiavi reported no cash-out refinances in either year, but 5,209 DSCR-type refinances in 2025 against 585 DSCR-type purchases. Regulation C lets a lender that “does not distinguish between a cash-out refinancing and a refinancing under its own guidelines” report all of them as refinancings (comment 4(a)(3)-2.iii), so Kiavi's refinances should be read as including cash-outs; that is why we also show both codes together above. Visio's originating entity reported 1,171 cash-outs at a 7.425% median and 75% median CLTV. Our Kiavi review covers the company's history and securitizations.

The seasoning rules: when the lender will use the new value

Seasoning decides which value the refinance is sized on: the appraisal after your rehab, or what you paid. It is set in two very different places.

Conventional loans (Fannie Mae, Freddie Mac). Three rules, quoted from the guides:

1. Six months on title. Fannie Mae: “At least one borrower must have been on title for at least for six months prior to the disbursement date of the new loan.” Freddie Mac: “at least one Borrower must have been on title to the Mortgaged Premises for at least six months prior to the Note Date”. Time held by an LLC the borrower controls counts, but title must move to the individual borrower to close (Fannie Mae B2-1.3-03; Freddie Mac 4301.5(b)).
2. The loan being paid off must be 12 months old. Fannie Mae: an existing first mortgage paid off through the cash-out “must be at least 12 months old at the time of refinance, as measured by the note date of the existing loan to the note date of the new loan.” Freddie Mac's 4301.5(c) says the same. For a BRRRR financed with a 12-month bridge loan, this is the binding rule: a conventional cash-out cannot pay off that bridge loan until its note is a year old, whatever the appraisal says.
3. Delayed financing is for cash buyers. The exception that waives the six months requires that the purchase settlement statement “confirms that no mortgage financing was used to obtain the subject property” (Fannie Mae), and the new loan is capped at “the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points on the new mortgage loan.” Freddie Mac caps it at “the sum of the original purchase price and related Closing Costs”, less gifts. Neither cap includes rehab spending, so delayed financing gets an all-cash buyer's purchase money back but not the forced appreciation.

The conventional alternative that does not wait a year is a limited cash-out refinance (Fannie Mae B2-1.3-02): it can pay off an existing first mortgage, uses the current appraised value for a refinance (B2-1.2-01: “The property value is the current appraised value”), and returns cash only up to “the greater of 1% of the new refinance loan amount or $2,000.” That moves you out of an expensive bridge loan on the new value, but it does not give you your capital back, which is the point of the second R.

DSCR lenders. Their rules are their own, published (or not) on their sites. What each said on October 7, 2026:

The practical reading: if you want your capital back inside a year, you are refinancing into a DSCR-type loan, not a conventional one, and the lender's own seasoning rule matters as much as its rate. Ask before you buy, in writing: how many days of ownership before the lender uses the appraised value, and what it uses before then. Our DSCR refinance guide lists other lenders' tiers.

A worked BRRRR example with sourced rates

The two rates and the timing below come from the sources above; the property, the rehab budget, the rent and the cost percentages are illustrative, chosen to be ordinary, and you should replace them with your own quotes.

Inputs

The arithmetic (our arithmetic; reproduced by check_math.py in the data folder)

1. Cash in. Cost is $200,000 + $50,000 = $250,000. Purchase closing costs are $4,000. The short-term loan is $180,000 + $50,000 = $230,000; two points are $4,600. Interest for six months on the full balance is $230,000 × 10.39% ÷ 12 × 6 = $11,948.50 ($1,991.42 a month). All-in cost: $270,548.50. Your cash: $270,548.50 − $230,000 = $40,548.50.
2. Refinance. 75% of $325,000 is a $243,750 loan. Closing costs at 3% are $7,312.50. After paying off the $230,000 short-term loan, $6,437.50 comes back to you.
3. Cash left in the deal: $40,548.50 − $6,437.50 = $34,111. Equity after the refinance: $325,000 − $243,750 = $81,250.
4. DSCR at the refinance. Principal and interest on $243,750 at 7.375% over 30 years is $1,683.52 a month; with $300 of taxes and $150 of insurance the payment (PITIA) is $2,133.52. DSCR = $2,400 ÷ $2,133.52 = 1.12, and rent exceeds PITIA by $266.48 before vacancy, repairs and management.

What changes the outcome

Three lessons sit in that table. A low appraisal does not hurt the DSCR; it hurts your cash. The loan shrinks, so the payment falls and the ratio rises, but the refinance no longer pays off the bridge loan and you bring $17,206 to closing. Seasoning is worth tens of thousands of dollars: a lender that sizes on cost instead of the appraisal leaves $88,674 in this deal. And getting all your money back needs a big value jump: with these costs the appraisal has to reach about 1.49 times the price plus rehab (our arithmetic), which is why a full-cash-out BRRRR is the exception and not the base case. At that appraisal the larger loan pushes the DSCR down to 1.01, so a full cash-out also leaves almost no cash flow.

BRRRR calculator

The calculator starts from the worked example above. Change the price, rehab, appraisal and loan terms to your quotes; the second column repeats the refinance with a lower appraisal, and the value selector shows what happens if your lender sizes the loan on cost because you have not met its seasoning rule.

For the rental side alone (vacancy, maintenance, cap rate, cash-on-cash), use our rental property calculator; for the refinance loan's DSCR against lender floors, the DSCR loan calculator.

How our numbers reconcile with our other pages

• Same definitions. DSCR-type, short-term and the investor base filters are those of our investment property rates page and hard money rates page. Their headline figures reproduce here: 486,530 investor loans in 2025, 152,049 DSCR-type at 7.375%, 68,319 short-term at 9.99%, 57,266 non-bank short-term at 10.25%, and 42,865 non-bank short-term purchases at 10.39%.
• Short-term cash-outs. The hard money page lists 2,746 non-bank short-term cash-outs at 9.625%; this page counts 3,070 short-term cash-outs from all lenders at 9.25%. The difference is the lender filter.
• Cash-out premium. Our DSCR refinance guide describes a cash-out add-on of about 0.2 points from lender sources; the HMDA median gap between DSCR-type cash-outs and purchases was 0.125 points in 2024 and 2025. Both are compatible, since a median gap is not a lender's price adjustment for a given borrower.

What a borrower can do with this

1. Plan the refinance at 70% to 75%, not 80%. Three out of four 2025 investor cash-outs closed at 75% CLTV or less. Run your deal at 70% too; if it only works at 80%, it depends on the top 1-2% of the market.
2. Get the refinance lender's seasoning rule before you buy. Ask how many days of ownership it needs before using the appraised value, and what value it uses before then. Kiavi publishes 90 days, or none on its own bridge loans; Lima One publishes no seasoning from its own FixNFlip loan.
3. Do not plan a conventional cash-out inside 12 months of a bridge loan. Fannie Mae and Freddie Mac require the first mortgage being paid off to be at least 12 months old. Delayed financing needs a purchase made without mortgage financing.
4. Use one lender for both legs if the price is close. The same-lender path is where the published seasoning rules are shortest. Compare the bridge rate against the 10.39% non-bank purchase median and the refinance rate against the 7.375% DSCR-type cash-out median.
5. Stress the appraisal, not only the rent. In the worked example a 10% lower appraisal turns $6,438 back into $17,206 owed at closing. Keep that much in reserve until the appraisal is in.
6. Count points and carry. Two points and six months of interest were $16,548.50 of the $40,548.50 cash in (our arithmetic). A faster rehab and refinance cuts that more than a lower note rate does.

Kiavi pays us a referral fee when a loan closes through its button in the box below. The HMDA figures above are the same either way. Kiavi makes both BRRRR loans, the short-term purchase-and-rehab loan (10.45% median in 2025) and the DSCR-type rental loan; Visio Lending makes only the 30-year rental loan; Lima One makes both.

FAQ

Loan-level data: FFIEC/CFPB HMDA Data Browser, nationwide originated conventional loans for 2024 and 2025 (request URL https://ffiec.cfpb.gov/v2/data-browser-api/view/nationwide/csv?years=2025&actions_taken=1&loan_types=1 and the same for 2024), downloaded October 7, 2026; investment-property (occupancy type 3), first-lien and the other filters applied locally by our scripts (hm.py, an.py, an2.py, an3.py), with the cash-out rows and exemplar records in the data folder; lender names and agency codes from the FFIEC filer lists and the FFIEC public institutions API, read October 7, 2026; loan-purpose and reporting rules from the FFIEC public LAR data fields, the FFIEC 2025 HMDA filing guide, 12 CFR 1003.3 and 1003.4 and the Supplement I official interpretations (eCFR). Refinance rules: Fannie Mae Selling Guide B2-1.3-03 (dated 12/10/2025), B2-1.3-02 and B2-1.2-01, and Freddie Mac Seller/Servicer Guide Section 4301.5 (effective 02/04/2026), read October 7, 2026. Lender statements: kiavi.com/rental, kiavi.com/llms.txt, limaone.com and visiolending.com pages, saved October 7, 2026. All medians, percentiles, shares, changes and the worked example are our arithmetic. This is analysis of public documents, not investment, legal or tax advice, and not a loan offer.