Real estate investors who expanded to 24 units in a year say the BRRRR method can help investors scale fast - if they avoid 2 costly mistakes

"Short for buy, rehab, rent, refinance, repeat, the BRRRR approach involves buying a property with potential, renovating it, and then finding a tenant. Once rented, the next step is to refinance, allowing investors to pull out their original investment, plus any equity they've built in the property. (Banks typically lend up to 75% of the new value on a cash-out refi.)"

"It's a way for investors to essentially recycle their initial capital, rather than having to come up with, in many cases, a lot of new money for each deal. "With a $300,000 or $400,000 property, with closing costs, you have to come up with 60 to 80 grand, which is not very scalable," Louw told Business Insider. He's a real estate agent in Buffalo with a background in construction and engineering, while Swofford is a startup consultant in Charleston."

"Short-term financing, such as private money or hard money, is typically used in BRRRR real estate investing (Swofford and Louw have financed each of their deals with hard money). It allows investors to move quickly on distressed properties, but it can come with high interest rates, making it especially important to pay them off in a timely manner. Thanks to Louw's construction background, they can confidently predict their rehab costs and timeline. Even still, "things go wrong," said Swofford."

Connor Swofford and Pieter Louw scaled from zero to 24 rental units in 12 months using the BRRRR method: buy, rehab, rent, refinance, repeat. The approach relies on renovating properties, renting them, then cash-out refinancing to recycle capital, with banks often lending up to 75% of after-repair value. The partners primarily used hard-money loans to act quickly on distressed deals, making accurate rehab budgets and timelines essential. Common pitfalls include underbudgeting time and money and miscalculating after-repair value; inexperienced projects frequently encounter unexpected problems, so contingency planning and conservative financial estimates are critical.

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