Real-estate investors seized upon a tried-and-true strategy to fix up homes and make money. Then the market turned.

Sun, 03/05/2023 - 06:20

A man wearing blue pants, a blue top, and work boots checks the alignment of a vertical wood beam with a bubble level. He stands amid an unfinished roof with exposed beams and insulation. — Real-estate investors who embrace the "BRRRR" method buy a home, rehab it, rent it out, refinance it to withdraw cash, and repeat to buy their next property.
Thomas Trutschel/Photothek via Getty Images

Rental-property owners look for reliable ways to scale up quickly and ensure steady cash flow.
One way: buy a home, fix it up to rent out, then refinance to get cash and buy the next one.
Two investors lay out the reasons they're now shying away from that model, nicknamed BRRRR.

Jessica Davis Holland, an Austin, Texas real-estate investor, and her husband recently spent $225,000 on a three-bedroom, two-bathroom home in the growing suburb of Cedar Creek.