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The Equity-15 BRRRR Program
Performance-based pricing, total transparency, and a 15% equity
Every real estate investor knows the power of the BRRRR method (Buy, Rehab, Rent, Refinance, Repeat). It is the premier strategy for wealth building - allowing you to recycle your capital and build a portfolio of rental properties.
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But for remote investors, this strategy comes with two massive risks that can turn a dream project into a nightmare:
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The "Blind" Contractor Risk: It’s not just about contractors running off with money. It’s about the things you can’t see. Many contractors cut corners, use sub-par materials, or hide poor workmanship behind a fresh coat of paint. As a remote investor, you have no way to verify the quality. For example, you might find your bathroom's subfloor was not replaced but simply covered with the new LVP flooring you paid them to install. Six months later, the LVP breaks due to water damage from the rotting subfloor, forcing you to pay twice: once to repair the subfloor you thought was already fixed, and again to redo the flooring. As a remote investor, you often have no way to verify these "hidden" details until it's too late.
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The Appraisal Gap: What if you spend $150,000 buying and fixing a house, but the bank only appraises it at $140,000? Your equity vanishes, and you are left bringing cash to the closing table.
At The MO Builder, we pride ourselves on doing high-quality renovation work that stands the test of time. We have developed The Equity-15 BRRRR Program to solve the risks of remote investing while you make 15% equity from the process. The program have helped many investors to build a sizable portfolio in the last two years. Here is how our process works.
Step 1: Data-Driven Acquisition
We scour the Kansas City market for distressed single-family homes with high "value-add" potential. Before we even present a property to you, it passes our underwriting criteria that ensures a project works for both investors and us. You receive a complete data pack including the purchase price, a detailed renovation budget, closing costs, an estimated After Repair Value (ARV), and comparables (comps) to justify the numbers. We identify properties where the numbers make sense for a solid rental return and a successful refinance - the two most important aspects of a property after the renovation is completed.
Step 2: Purchase and Renovation With Escrow Protection
Trust is built on safety and clear expectations. When you purchase the property (using cash or a hard money loan), you do not hand the full renovation budget to us directly. At closing, your renovation funds are deposited into a secure Escrow Account managed by the title company.
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The Draw Schedule: We structure the payments so we have the funds to move fast, but you retain the leverage to ensure completion.
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Phase 1 (Start): 1/3 of the funds are released at the very beginning to mobilize our crew and purchase materials.
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Phase 2 (Progress): The next 1/3 is released only after the first phase of work (1/3) is verified complete.
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Phase 3 (Near Completion): The final major draw is released when the project is 2/3 complete to fund the finish line.
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The Final $5k Holdback: We strictly hold back the last $5,000 in escrow. This is only released after the project is 100% complete and the punch list from an inspection report is done.
Step 3: Independent Inspection & Validation
This step is where we differentiate ourselves. We validate the quality before we call the job done. Toward the end of the renovation, we proactively hire an independent home inspector to audit the property.
Why do we do this? We are incentivized to catch and fix issues immediately. Fixing a loose outlet or a plumbing tweak while our crew is still on-site is significantly cheaper and faster than sending them back after a tenant moves in. We also share the inspection report directly with you. We will also update you on the progress of the "punch list" repairs required to address the inspector's findings.
Realistic Standards: While no older home can ever be "perfect," this process ensures the property meets a high standard of quality and is fully functional for your future tenant.
Step 4: The Equity 15 Pricing Model
Once the inspection is clear, we determine the fair market value using an unbiased process to finalize the financials. We maintain a pool of five reputable, independent appraisers who we believe provide fair market valuations. From this pool, we round robin and select two appraisers to value the home. We take the average of these two values to determine the final performance.
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The 85% Target: We aim for your total investment (Purchase + Reno) to be 85% of that appraised value, leaving you with a target of 15% equity. This is a reward to the investors because investors bring their own fund to do the project.
Final Performance-Based Price Adjustment:
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If the appraisal comes in LOWER than projected, we adjust the final construction costs downward. We share in the downside risk so you aren't left holding the bag. Example: If you spent $120,000 for purchase and renovation, but the appraised value comes in at $130,000, then 85% of that value is $110,500. We will refund the $9,500 difference back to you to maintain your equity position.
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If the appraisal comes in HIGHER than projected, the final payment is adjusted upward. This incentivizes us to produce the highest quality product possible to maximize the home's value. Example: If you spent $120,000 for purchase and renovation, but the appraised value is $150,000, then 85% of that value is $127,500. You would pay the builder the $7,500 difference.
Step 5: Warranty & Support
Our job isn’t done when the construction crew leaves. We stand behind our workmanship to ensure a smooth transition to landlordship.
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3-Month Warranty: We provide a workmanship warranty for 3 months after your tenant moves in.
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We handle the initial maintenance questions so you can focus on stabilizing the asset.​
Step 6: The "No Seasoning" Cash-Out Refinance
Speed is critical in the BRRRR strategy. Most banks make you wait 6–12 months ("seasoning") before you can pull your cash out.
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Immediate Liquidity: We have partnered with preferred lenders who offer a Cash-Out Refinance at 75% LTV with NO seasoning period.
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Bonus Credit: If you choose to work with our preferred lender, we will provide a $1,500 closing cost credit.
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We receive no referral fees or kickbacks from these lenders. We offer this connection solely to ensure you are in good hands and have a smooth exit. You are free to choose any lender you wish, or simply hold the house in cash.
Frequently Asked Questions (FAQ)
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Question: What is the average time to renovate a house?
For most standard jobs, the renovation timeline is 1 - 2 months from start to completion. For larger, more extensive projects, it can take up to 3 months. We will review the scope of work and communicate the estimated timeframe clearly before the start of any job so you know what to expect.
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Question: How do you make sure the communicated ARV is fair?
We do not rely on guesses. When the job is done, we order appraisals from two different independent appraisers and take the average of their values. We share the full appraisal reports with the owner so you can see exactly how the value was determined.
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Question: How do I make sure my renovation fund is safe?
Your security is our priority. All renovation funds are held in a secure escrow account by the title company. Funds are only disbursed based on the strict terms of our agreement - usually when a stage of construction is completed and verified. Additionally, regardless of whether a draw request is being made, we provide biweekly updates on your property via a shared Google Drive folder containing photos and videos, so you can always see the progress.