Buy & Hold vs BRRRR: Which strategy fits your first investment?

Every new real estate investor faces the same question: what strategy should I use? Two approaches dominate the conversation for good reason. Buy & Hold and BRRRR both build wealth through rental properties, but they take different paths to get there.

Understanding the difference helps you pick the right approach for your first property and set realistic expectations from day one.

Buy & Hold: The straightforward path

Buy & Hold is exactly what it sounds like. You purchase a property, rent it out, and hold it for the long term.

How it works:

1. Find a property that cash flows with current rents
2. Put down 20-25% and finance the rest
3. Place a tenant and collect rent
4. Hold for years while building equity through appreciation and loan paydown

Why investors choose it:

• Simpler execution with fewer moving parts
• No renovation expertise required
• Predictable timeline from purchase to rental income
• Lower risk of cost overruns or project delays

The tradeoff: Your capital stays locked in each property. With a 25% down payment on a $200,000 property, $50,000 of your cash sits in that deal until you sell or refinance.

BRRRR: Recycling your capital

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. The strategy targets distressed properties you can improve, then refinance to pull your capital back out.

How it works:

1. Buy a property below market value (often distressed)
2. Rehab it to increase value and make it rent-ready
3. Rent it to a qualified tenant
4. Refinance based on the new, higher appraised value
5. Repeat using the recovered capital

Why investors choose it:

• Potential to recover most or all of your initial investment
• Scales faster by recycling the same capital
• Forces equity creation through improvements
• Can achieve higher returns on invested capital

The tradeoff: More complexity, more risk. Renovation costs can exceed estimates. Appraisals can come in low. The refinance might not return as much capital as planned. Success requires accurate projections and solid execution.

Choosing your strategy

Your choice depends on three factors: available capital, time commitment, and risk tolerance.

Choose Buy & Hold if:

• You have steady capital but limited time
• You prefer predictable outcomes over maximizing returns
• You lack renovation experience or reliable contractors
• Your market has properties that cash flow at retail prices

Choose BRRRR if:

• You have limited capital but want to scale quickly
• You can accurately estimate renovation costs
• You have time to manage rehab projects
• Your market has distressed properties with upside potential

What this means in CrescoRealty

When you add a property, you select your investment strategy. This tells the system how to calculate your returns.

Buy & Hold properties focus on long-term metrics: monthly cash flow, appreciation projections, and equity buildup over your holding period.

BRRRR properties track the full cycle: purchase price, rehab costs, after-repair value, refinance amount, and capital recovered. The system calculates whether your numbers support a successful BRRRR execution.

Picking the right strategy upfront ensures you see the metrics that actually matter for your approach.

Start with clarity

Both strategies build wealth. Neither is universally better. The right choice is the one that matches your resources, skills, and goals.

If you are adding your first property, be honest about your situation. A straightforward Buy & Hold that you execute well beats a BRRRR attempt that stalls halfway through.

Ready to analyze a property? Add your first property and select the strategy that fits your plan.