How does the BRRR refinance work?

By Danté M. Shackelford, Founder and Managing Principal of EMx Lending
Updated November 5, 2026

The steps

1. Buy and rehab with a bridge loan: up to 90% of purchase and 100% of rehab.
2. Rent it and get a signed lease.
3. Order a new appraisal. At purchase, the appraisal estimated the after-repair value. Now it measures what the finished property is actually worth.
4. Refinance into a DSCR loan, up to 75% of the new value on a cash-out refinance at the top credit tier.

What the refinance needs

• The new appraisal and the lease
• Bank statements showing closing costs plus 6 months of the full payment in reserves
• If we did the bridge loan, we already have your entity documents and most of the file, so it is usually a couple of documents and about a week to close

When we write the bridge loan, we also show you what the refinance should look like, so there are no surprises six or twelve months later.

Underwrite it to survive a flat market

The whole plan rests on the after-repair value. Late in the cycle, we'd be conservative on two things:

• Discount the after-repair value. Don't count on prices rising while you renovate. In a correcting market like Detroit, take about 10% off today's comps.
• Test the refinance at 70%, not 75%. If the deal still works with less cash coming back, it's a good deal. If it only works at maximum leverage and full value, it's fragile.

BRRR still works. It just needs a margin of safety built in from the start.

This is general education, not investment, legal or tax advice. Loan terms are general guidelines, depend on credit, experience and the property, are subject to change and are not a commitment to lend. EMx Lending makes business-purpose loans on non-owner-occupied investment property in all states except Vermont, North Carolina, North Dakota, South Dakota, Idaho, California, Arizona and Nevada.