Walk one property through all five steps of BRRRR. Each step uses the numbers from the one before.
“You make your money when you buy.” Start with the kind of distress, the price, and what it’ll be worth after the work.
Use sold comps of fixed-up homes like this one, with standard finishes. Your rehab picks in step 2 move it from there. Right now they make it $203,100.
Pick Skip, Standard, or Best value for each area. Best value is the book’s pick. Sometimes it costs less for nearly the same result. Sometimes it costs a little more and pays you back more.
Your picks move the after-repair value by $3,100, to $203,100. Comps already assume standard finishes, so Standard moves it nothing, and Skip takes that value away. Only skip what’s already in good shape.
Prices are rough 2026 contractor costs, labor included, for a two-bed, one-bath house of about 1,300 sq ft. Set local prices for your area, and trust real bids over these. Value added is a rough guess. Your appraiser has the final say.
The fastest way to a higher value isn’t more granite. It’s more bedrooms, more bathrooms, and more square footage. Tap an item to see the book’s advice for it.
Rent against what you put in is the first check. Then the book’s napkin: rent minus the mortgage, tax, insurance, and management. We add a set-aside for vacancy and repairs, since the book calls them the two biggest costs.
Enter two quotes. Pick one, and its rate and loan-to-value flow into the cash-flow math and the ten-year view.
This deal, repeated. BRRRR pays cash, fixes it up, and refinances out once the cycle and the lender’s wait are both done. Traditional puts 25% down on a finished house at full value and holds. Both start with the same cash.
Net worth is equity plus cash. Both paths pay closing costs and set money aside for vacancy and repairs. It skips loan paydown and rent growth, and it assumes you can find a deal every cycle, so treat it as the shape of the idea, not a promise.
This deal clears all three filters. All-in at 73.9% of ARV, rent at 1.30% of all-in, and $126/mo of cash flow after a set-aside for vacancy and repairs. The book calls this overcoming fear with math. This is the math part.