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Will BRRRR work in 2025? 

How to Succeed in Real Estate When the Easy Deals Are Gone

Want to generate $300-$500 monthly cash flow per house with built-in equity and appreciation potential, all with minimal out-of-pocket investment? What if you did all this with little or no money out of your pocket?  How many deals would you do? 

The year was 2010 and I was buying as many properties in Denver as possible.  Down payments were not an obstacle because I figured out how to do it without a down payment.  I was using what is now known as the BRRRR strategy.  I honestly thought I created this strategy, and it did not have the catchy name it does today. Later, while browsing BiggerPockets, I discovered thousands of investors nationwide were using this same powerful strategy. BRRRR is an acronym for buy, rehab, rent, refinance, repeat. The approach uses hard money lenders, like Pine Financial, to fund most or all purchase and construction costs, minimizing your initial investment. After rehabilitation, you rent the property and refinance the hard money loan, potentially rolling all closing costs into the new loan. Your only out-of-pocket expense could be the monthly hard money payments.  

This minimal investment strategy allows you to acquire more properties, each with cash flow and built-in equity. It’s quite astonishing to watch your income and net worth accelerate. 

While BRRRR worked exceptionally well for me in Denver in 2010, is it still viable in 2025? Success requires finding distressed homes where you can add significant value through renovation, in areas where rent minus expenses exceeds your final mortgage payment. 

The short answer is yes – but it’s not 2010 anymore. These deals are increasingly rare, making the strategy less prevalent. Though some of our clients still find these opportunities and are building wealth quickly, they’re no longer readily available on the MLS. Success requires focusing on neighborhoods with higher rent-to-price ratios and start making offers. Let us know if you want feedback on a deal you are considering, we are always happy to jump on a call and be a second set of eyes. 

The good news is if you don’t have the time or energy in 2025 to focus on making this successful, there are some alternatives.  

Alternative Strategies for 2025: 

Larger Down Payments – Traditional investing with conventional financing offers a slower but reliable path. Larger down payments reduce monthly expenses, ensuring positive cash flow despite lower cash-on-cash returns. 

Increase Monthly Income A Property Produces –BRRRR will still work well if you can find ways to increase the amount of income a property produces, but to do this you need to be creative.  Here are some ways you can do this:  

  • Room-by-room rentals 
  • Short or medium-term rentals 
  • Strategic tenant selection  

Long-term rentals, leases of a year or more, typically are the easiest to manage but have the smallest monthly income so pivoting how these are rented can increase cash flow. You can also be creative with your tenants. We recently rented a tri-plex to a single tenant who subleases by the room. We like this because we have one tenant with a long-term lease, even though they are making money on our property by increasing the income with a creative strategy.   

Fix and Flip – Flip and Flips still work! They will always work. We are currently experiencing tightened inventory, so fix and flip opportunities are more difficult to find but that does not mean they have gone away. One successful flipper that I was recently talking to let me know that he makes about 50 offers per deal, demonstrating today’s required effort. While flipping alone won’t build wealth, it pairs well with long-term strategies. 

Commercial Deals – Larger projects often face less competition and trade based on returns rather than emotion. As I have moved along in my own career, I have gained the confidence to move into these larger deals.  When you are willing to buy larger projects, like commercial buildings, you typically have less competition, so deals are easier to find.  Also, commercial buildings almost always trade based on a return on your investment. Commercial buildings can provide better cash flow opportunities without competing against emotional homebuyers. 

Passive Strategies – You do need cash to invest in real estate passively, so this is very different than the BRRRR strategy, but it is something to consider.  Investing in debt, like what Pine offers, provides the most secure investment in the capital stack. Returns are still great but if you are trying to maximize returns you can consider investing as a partner in another investor’s deal.  This can be a small group, or you can be a single partner with someone you know.  Alternatively, you can invest with a larger group into a larger project.  That is known as syndications which are very popular with multi-family investments.  When investing in projects like this though you will be giving up control, so there is some significant risk to consider.  

Long-term Appreciation – Another option, one I am even hesitant to mention, is to focus on appreciation of your investment properties and play the long game. Some investors accept negative cash flow for tax benefits and future appreciation, planning to refinance when rates drop. However, negative cash flow poses significant risks and may force premature sales.  

Make no mistake about it, real estate investing is alive and well and is still making more millionaires than most other investments with a fraction of the risk.  Risk-adjusted returns are beyond any other investment vehicle I have seen.  Success in 2025 depends on selecting and executing the right strategy for your situation.