Two loans, one plan: short-term rehab money, then long-term rental financing.
The BRRRR method uses a short-term rehab loan to acquire and renovate a property, then a long-term rental loan to refinance and hold it. Ken Clark Jr. helps investors in Sacramento, New Jersey, and every state where PRMG is licensed (all except New York) plan both loans through PRMG programs before the first offer.
Short answer: it is financing for the buy, rehab, rent, refinance, repeat strategy. In practice it means two loans: a short-term fix and flip loan for acquisition and renovation, then a long-term DSCR loan to hold the rental.
The goal is to force appreciation through renovation, then refinance against the higher value so less of your own cash stays tied up in each property. Whether that happens depends on the numbers, not the acronym.
Short answer: with a business-purpose rehab loan sized on purchase price, rehab budget, and after-repair value (ARV).
Depending on experience, PRMG programs may finance up to about 90 percent of the purchase and up to 100 percent of the rehab, with the total commonly capped around 75 percent of ARV. Terms commonly run 12 to 24 months, interest-only, and many programs have no prepayment penalty, which matters because you plan to refinance early. See fix and flip loan requirements.
Short answer: finishing on budget and on time, with work that renters and appraisers both value.
Rehab funds are paid in draws as work is completed and verified. Pull permits where required: unpermitted work can create appraisal and insurance problems at the refinance. Rental-grade finishes that hold up well usually beat luxury upgrades that the rent will not support.
Short answer: because the DSCR refinance qualifies on the property's rent compared with its payment, not on your personal income.
DSCR is the debt service coverage ratio: monthly rent divided by the monthly payment including taxes, insurance, and any HOA dues. A ratio at or above 1.00 means the rent covers the payment. Stronger coverage generally means better terms. A signed lease and, in some cases, proof of deposits help document the income. The appraiser also estimates market rent.
| Feature | Generally |
|---|---|
| Program | DSCR rental loan, 30-year options available |
| Leverage | Commonly up to about 80% LTV on purchase or rate-term; cash-out typically lower |
| Qualification | Property rent vs. payment; credit and reserves also reviewed |
| Borrower | Individual or entity, depending on program |
| Property | Non-owner-occupied 1 to 4 units and some condos; other types by program |
The refinance pays off the rehab loan. If the new appraised value is high enough, cash-out may return part of your down payment and rehab money, subject to program guidelines.
Short answer: seasoning is the time since you bought the property. Some refinance programs limit how soon you can use the new appraised value instead of your purchase price plus documented rehab costs.
Rules vary by program and change over time, so there is no single number to plan around. Ask up front how the program treats a recent purchase, whether documented rehab costs can be added to your basis, and how long you need to own the property before a cash-out based on full appraised value. Build your timeline around the answer.
Short answer: by recycling the cash returned at refinance into the next purchase, while keeping reserves for the properties you already hold.
Each completed project also strengthens your experience record, which may unlock better leverage on the next rehab loan. Watch total reserves: DSCR programs may ask for reserves across your portfolio, not just the new property.
Educational illustration only. Not an actual client, loan offer, or commitment to lend.
An investor buys a dated duplex for $400,000 with a $90,000 rehab budget and an estimated ARV of $620,000. A rehab loan at 85 percent of purchase ($340,000) plus 100 percent of rehab ($90,000) totals $430,000, about 69 percent of ARV. After the work, both units rent for a combined $4,600 a month. If the property appraises at $620,000 and a DSCR cash-out refinance is available at 75 percent, the new loan would be $465,000: enough to pay off the $430,000 rehab loan plus closing costs and return part of the investor's cash, as long as seasoning rules allow the appraised value to be used and the rent covers the new payment.
Answered by Ken Clark Jr., Certified Mortgage Advisor. Program availability and requirements vary and are subject to change.
Financing for buy, rehab, rent, refinance, repeat. It is usually a short-term fix and flip loan followed by a long-term DSCR rental loan.
Usually two: a rehab loan to buy and renovate, then a DSCR loan to refinance and hold the rental.
Depending on experience, up to about 90 percent of the purchase and up to 100 percent of rehab, with the total commonly capped around 75 percent of after-repair value.
A rental loan that qualifies on the property's rent compared with its monthly payment, rather than your personal income.
It depends on the appraised value, program leverage (cash-out is typically lower than purchase or rate-term), seasoning rules, and whether the rent covers the new payment.
The time since you bought the property. Some programs limit use of the new appraised value on a recent purchase. Rules vary by program.
A signed lease helps document income. Some programs may use the appraiser's market rent estimate, depending on guidelines.
Rehab loans commonly lend to entities, and many DSCR programs allow entity borrowers, depending on program guidelines.
Many fix and flip programs have none, which fits a plan to refinance early. DSCR loans may have prepayment terms, so ask.
No. These are business-purpose loans for non-owner-occupied investment properties.
PRMG programs are available in every state where PRMG is licensed, which is all states except New York, including California and New Jersey, subject to program guidelines.
Guidelines change. Verify current program requirements with Ken Clark Jr. before relying on them for a transaction.
Disclaimer: This content is for educational purposes only and is not a commitment to lend, a guarantee of approval, or a rate quote. Loan programs, down payment requirements, terms, and eligibility depend on borrower, property, project, builder, and program qualifications, are subject to underwriting, and vary by state. Not all applicants or projects will qualify. Builder registration is a documentation review for program eligibility and is not an endorsement of any builder. Business-purpose loans are for non-owner-occupied investment properties only and are not consumer mortgage loans. Equal Housing Opportunity. Paramount Residential Mortgage Group, Inc. (PRMG), NMLS #75243. Ken Clark Jr., NMLS #225375. PRMG is licensed in 49 states, excluding New York.
Certified Mortgage Advisor and Branch Manager at PRMG Mortgage (NMLS #75243). 28 years in mortgage lending. Specializes in FHA, VA, conventional, DPA, jumbo, Non-QM, renovation, and construction financing for buyers and investors in Sacramento, New Jersey, and nationwide. PRMG is licensed in 49 states, excluding New York. Three-time Gold Award winner for Highly Reviewed Mortgage Team in Sacramento (2023, 2024, 2025). NMLS #225375.
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