Spencer Buys Houses
Member
Building a rental portfolio doesn’t always require a huge amount of new capital for every property. At Spencer Buys Houses, we use a strategy called BRRRR — Buy, Renovate, Refinance, Repeat — to create equity, improve properties, and put our investment dollars back to work.
One of our recent Memphis projects is a good example of how the strategy can work when the purchase price, renovation, appraisal, and financing all come together.
We purchased the property for $165,000. After completing the renovation, the property appraised for approximately $230,000. We then refinanced the property with a 20-year loan at 7.25%, allowing us to recover capital while keeping the property as a rental.
The result? Approximately $600 per month in cash flow after the refinance.
Buy → Renovate → Refinance → Repeat
The concept is simple. Instead of purchasing a rental property and leaving all of your money tied up in it, you look for an opportunity where improvements can create additional equity.
Once the property has been renovated and its value has increased, you refinance based on the new valuation. Depending on the loan terms and the amount of equity created, an investor may be able to recover some of the original investment and use that capital toward another property.
It’s a strategy we continue to watch closely in the Memphis real estate market.
For investors, buying the right property at the right price can make a major difference. Properties that need cosmetic updates, deferred maintenance, or larger renovations can sometimes provide opportunities to create value.
Our purchase price on this particular Memphis property was $165,000.
The goal wasn't simply to buy a house. We wanted to acquire a property where improvements could increase its long-term value and rental potential.
Depending on the property, this can include updating kitchens and bathrooms, replacing flooring, repairing mechanical systems, improving the exterior, painting, and addressing deferred maintenance.
Renovation isn't just about making a house look better. For investors, the work should have a purpose: improving the property's condition, increasing its appeal to tenants, and potentially supporting a stronger market valuation.
After completing the improvements, this property appraised at approximately $230,000.
That created a significant difference between the original purchase price and the property's post-renovation value.
The property was refinanced using a 20-year loan at 7.25%.
Refinancing can allow investors to restructure the property's financing and, when sufficient equity exists, potentially recover some of the capital originally invested.
The exact amount an investor can pull out depends on the lender, appraisal, loan-to-value requirements, credit profile, property type, and other financing conditions.
That is why every BRRRR deal needs to be evaluated individually.
After the refinance, this Memphis property is generating approximately $600 per month in cash flow based on our numbers.
The property remains part of the portfolio while the capital recovered through the refinance can potentially be used toward another investment.
That's the basic idea behind repeating the process.
Creating equity doesn't happen automatically. It requires buying carefully, controlling renovation expenses, understanding the local market, and making sure the finished property supports the expected value.
That creates opportunities for different types of investors.
Some investors are looking for long-term rentals. Others focus on renovations and resales. Some are interested in multi-family properties, inherited homes, vacant houses, or properties that need significant work.
At Spencer Buys Houses, we work with homeowners and investors throughout Memphis and surrounding communities.
Maybe the property needs more repairs than expected. Maybe you're tired of dealing with tenants. Perhaps you've inherited a house, are ready to liquidate an investment, or simply want to move your money into another opportunity.
Whatever the reason, selling doesn't have to mean spending months preparing a property for the traditional market.
Spencer Buys Houses purchases properties as-is throughout the Memphis area.
You don't have to complete a major renovation before contacting us. We can look at the property, understand the situation, and discuss whether a cash sale makes sense.
We've been buying properties in the Memphis area for more than 10 years and understand that every property and seller has a different situation.
Call or text Spencer's team at (901) 979-9848 to discuss your property.
Spencer Buys Houses
Memphis, Tennessee
Cash Home Buyers | Investment Properties | As-Is Home Sales
Founder, Spencer Buys Houses | Memphis, TN
Spencer Shadrach has been buying homes across Memphis, Shelby County, and the Mid-South for more than 10 years. Spencer Buys Houses has completed 400+ transactions and maintains a BBB A+ rating and a 4.9-star rating across 113 Google reviews.
One of our recent Memphis projects is a good example of how the strategy can work when the purchase price, renovation, appraisal, and financing all come together.
We purchased the property for $165,000. After completing the renovation, the property appraised for approximately $230,000. We then refinanced the property with a 20-year loan at 7.25%, allowing us to recover capital while keeping the property as a rental.
The result? Approximately $600 per month in cash flow after the refinance.
What Is the BRRRR Strategy?
BRRRR stands for:Buy → Renovate → Refinance → Repeat
The concept is simple. Instead of purchasing a rental property and leaving all of your money tied up in it, you look for an opportunity where improvements can create additional equity.
Once the property has been renovated and its value has increased, you refinance based on the new valuation. Depending on the loan terms and the amount of equity created, an investor may be able to recover some of the original investment and use that capital toward another property.
It’s a strategy we continue to watch closely in the Memphis real estate market.
Step 1: Buy the Right Property
Everything starts with the purchase.For investors, buying the right property at the right price can make a major difference. Properties that need cosmetic updates, deferred maintenance, or larger renovations can sometimes provide opportunities to create value.
Our purchase price on this particular Memphis property was $165,000.
The goal wasn't simply to buy a house. We wanted to acquire a property where improvements could increase its long-term value and rental potential.
Step 2: Renovate and Add Value
The next stage was renovation.Depending on the property, this can include updating kitchens and bathrooms, replacing flooring, repairing mechanical systems, improving the exterior, painting, and addressing deferred maintenance.
Renovation isn't just about making a house look better. For investors, the work should have a purpose: improving the property's condition, increasing its appeal to tenants, and potentially supporting a stronger market valuation.
After completing the improvements, this property appraised at approximately $230,000.
That created a significant difference between the original purchase price and the property's post-renovation value.
Step 3: Refinance the Property
Once the renovation was complete, we moved into the refinancing stage.The property was refinanced using a 20-year loan at 7.25%.
Refinancing can allow investors to restructure the property's financing and, when sufficient equity exists, potentially recover some of the capital originally invested.
The exact amount an investor can pull out depends on the lender, appraisal, loan-to-value requirements, credit profile, property type, and other financing conditions.
That is why every BRRRR deal needs to be evaluated individually.
Step 4: Keep the Property Working
The final part of BRRRR is the part investors like most: keeping the property and allowing it to produce income.After the refinance, this Memphis property is generating approximately $600 per month in cash flow based on our numbers.
The property remains part of the portfolio while the capital recovered through the refinance can potentially be used toward another investment.
That's the basic idea behind repeating the process.
Breaking Down This Memphis Deal
Here is a simplified look at the numbers:- Purchase price: $165,000
- Post-renovation appraisal: Approximately $230,000
- Value difference: Approximately $65,000
- Refinance: 20-year loan at 7.25%
- Estimated monthly cash flow: Approximately $600
Creating equity doesn't happen automatically. It requires buying carefully, controlling renovation expenses, understanding the local market, and making sure the finished property supports the expected value.
Why Memphis Can Be Interesting for Real Estate Investors
Memphis has a diverse housing market with everything from older homes that need substantial rehabilitation to established rental properties and newer suburban housing.That creates opportunities for different types of investors.
Some investors are looking for long-term rentals. Others focus on renovations and resales. Some are interested in multi-family properties, inherited homes, vacant houses, or properties that need significant work.
At Spencer Buys Houses, we work with homeowners and investors throughout Memphis and surrounding communities.
Thinking About Selling an Investment Property?
Not every property owner wants to continue managing a rental.Maybe the property needs more repairs than expected. Maybe you're tired of dealing with tenants. Perhaps you've inherited a house, are ready to liquidate an investment, or simply want to move your money into another opportunity.
Whatever the reason, selling doesn't have to mean spending months preparing a property for the traditional market.
Spencer Buys Houses purchases properties as-is throughout the Memphis area.
You don't have to complete a major renovation before contacting us. We can look at the property, understand the situation, and discuss whether a cash sale makes sense.
Frequently Asked Questions
What does BRRRR mean in real estate?
BRRRR stands for Buy, Renovate, Refinance, Repeat. Investors use the strategy to purchase properties, improve them, refinance based on the property's new value, and potentially use recovered capital to acquire additional investments.Does BRRRR work with higher interest rates?
It can, but the numbers have to make sense. Investors should consider the mortgage payment, taxes, insurance, maintenance, vacancy, management expenses, and other costs before deciding whether a property will produce positive cash flow.How much equity can I create through renovation?
There isn't a guaranteed amount. Equity depends on the purchase price, renovation costs, completed property value, neighborhood market conditions, and the final appraisal.Do I need to renovate a property before refinancing?
Many BRRRR investors renovate before refinancing because improvements may increase the property's value. However, individual lender requirements vary, so investors should discuss their specific financing plans with their lender.Can I sell my Memphis investment property instead?
Absolutely. If continuing to own and manage the property no longer fits your plans, selling may be a better option. Spencer Buys Houses purchases Memphis properties in a variety of conditions and situations.Looking to Buy or Sell Property in Memphis?
Whether you're an investor looking for your next opportunity or a homeowner who wants to sell a property without dealing with repairs and a traditional listing, Spencer Buys Houses is ready to talk.We've been buying properties in the Memphis area for more than 10 years and understand that every property and seller has a different situation.
Call or text Spencer's team at (901) 979-9848 to discuss your property.
Spencer Buys Houses
Memphis, Tennessee
Cash Home Buyers | Investment Properties | As-Is Home Sales
About the Author
Spencer ShadrachFounder, Spencer Buys Houses | Memphis, TN
Spencer Shadrach has been buying homes across Memphis, Shelby County, and the Mid-South for more than 10 years. Spencer Buys Houses has completed 400+ transactions and maintains a BBB A+ rating and a 4.9-star rating across 113 Google reviews.