Glossary
BRR: Buy, refurbish, refinance
Buy below value, add value with works, then refinance to pull your cash back out.
What it means
BRR means buying a property that needs work, often with cash or a bridging loan, refurbishing it to raise its value, then refinancing onto a buy-to-let mortgage at the new value. The aim is to recycle as much of your cash as possible into the next deal while keeping a property that pays its way. It only works if the end value, the works budget and the refinance all land.
Worked example
ExampleA Halifax terrace bought for £120,000 with a bridge, refurbished for £25,000, refinanced at a £180,000 valuation.
- Total cash in
- £71,590
- Released on refinance
- £135,000 − £90,000 bridge − £1,500 costs = £43,500
- Money left in
- £71,590 − £43,500 = £28,090
61% of the cash comes back out. The rest stays in the deal, earning the rent.
Information, not advice. Example figures are fictional and for illustration only.