Buy, rehab, rent, refinance, repeat. The BRRRR method works the same way everywhere on paper. In Rhode Island, three things make the real version different from the one in most explainers: the housing stock is old and full of two- and three-families, the state tightened its lead rules for landlords in 2024, and the conveyance tax went up in October 2025.
This is the Rhode Island version with real numbers, the loans that fund each step, and the state rules that decide whether the refinance works. (Investing in Connecticut instead? Start with the BRRRR method in Connecticut.)
The short version: BRRRR works well in Rhode Island's two- and three-family stock, where firm rents can carry a 75% loan-to-value refinance. Plan for two Rhode Island specifics before you buy: pre-1978 rentals need lead certificates and every landlord must join the state rental registry within 30 days, and the seller-paid conveyance tax rose to $3.75 per $500 in October 2025.
Rhode Island has a lot of what BRRRR investors look for: multifamily buildings, older homes that need work, and a supply shortage that keeps rents firm. In July 2026 the median multifamily sale in the state was $620,000, multifamily sales were up 15.1% from a year earlier, and the single-family market had just 2.7 months of supply, roughly half of what a balanced market needs, according to the Rhode Island Association of Realtors.
That last number cuts both ways. Tight supply props up your after-repair value and your rents. It also means you're competing with other investors for every distressed property, which is where fast financing matters.
Illustrative numbers. Every deal is different.
| Step | Number |
|---|---|
| Purchase price | $430,000 |
| Rehab budget (including lead-safe work) | $80,000 |
| After-repair value (three comps, not one) | $680,000 |
| Rents after rehab | 3 Ă— $1,800 = $5,400/mo |
A bank won't lend on a three-family with a torn-out kitchen, chipping paint, and no tenants. This is where a fix-and-flip loan comes in. It's underwritten on the deal (purchase price, rehab budget, and ARV) rather than your tax returns, and the rehab money is released in draws as the work gets done.
Here's how ours is sized: up to 80% of the purchase price plus 100% of the rehab budget, capped at 65% of the ARV. On this deal that's $344,000 + $80,000 = $424,000, under the $442,000 cap. You bring the other $86,000 at closing plus origination points, and you make interest-only payments on what's been drawn. Your actual rate and points are set by our Approval Team on the specific deal, and a complete file can fund as soon as 7 business days after approval.
A building this age almost certainly predates 1978, which means lead rules apply the moment you rent it (more on that below). The cheapest time to do lead-safe work is during the renovation, when the contractor is already there and the walls are already open. Build it into the scope and the budget now, and add a contingency on top. Old Rhode Island houses hide surprises.
Six months of rehab on this deal, at an illustrative short-term rate and averaged across the draws, comes to roughly $21,000 in interest, plus about $3,000 in closing fees and the origination points.
Before you lease a single unit:
Then lease all three units at market rent, on paper, with deposits. The refinance lender cares about signed leases and the appraiser's rent schedule, not an online estimate.
A DSCR loan refinances you out based on the property's rent, not your personal income. At 75% of the $680,000 ARV, the new loan is $510,000. It pays off the $424,000 fix-and-flip loan and returns $86,000, which is your original down payment. With AFC there's no seasoning requirement, so the refinance can close as soon as the work is done and the units are leased.
The new payment at an illustrative 7.75%, 30-year, plus taxes and insurance, is about $4,729 a month. Against $5,400 of rent, that's a DSCR of about 1.14.
You won't always get every dollar back out. You will usually end up with a cash-flowing three-family and a large equity cushion for well under $50,000 left in the deal. Then you do it again.
Run the same refinance at lower rents and the picture changes fast:
Below 1.0, most DSCR programs need a bigger down payment, often 30–35%, which means less cash back at the refinance. Pull real comps for renovated units in the same neighborhood before you buy, not after.
Rhode Island has required lead conformance certificates for pre-1978 rental units for years. In 2024 the state added teeth. Every landlord now registers rental units with RIDOH, and if you buy or start leasing after September 1, 2024, you have 30 days to register. Owner-occupied rental properties are covered too, since January 1, 2024, so if you house-hack a three-family, the two rented units still need certificates. An unregistered landlord can't evict for non-payment, and tenants in a non-compliant unit can petition to pay rent into escrow. A unit that can't legally collect rent is a unit the DSCR math shouldn't count. Source: Rhode Island Attorney General guidance to landlords (January 2024). This is a summary, not legal advice.
On October 1, 2025, Rhode Island's real estate conveyance tax rose from $2.30 to $3.75 per $500, and residential sales above $824,000 (the 2026 threshold) pay a second tier on the excess, per the RI Division of Taxation. The seller pays it: on a $680,000 sale, that's $5,100. A flipper pays it on every exit. A BRRRR investor who refinances instead of selling doesn't, at least not until they eventually sell.
Rhode Island is an attorney-closing state, every closing needs a municipal lien certificate from the city or town, and each of the 39 cities and towns keeps its own land records. None of it is hard, but all of it runs on someone else's calendar. The full timeline is in how fast a hard money loan can close in Rhode Island.
We fund both ends: the fix-and-flip loan that buys and rehabs the property, and the DSCR loan that refinances it, so a deal that starts as a flip and becomes a hold isn't a problem. All terms are subject to program guidelines and review by our Approval Team. Nothing here is an approval or an offer of specific terms.
Get your numbers in about 2 minutes, with no SSN and no hard credit pull: get started here. Or send us the address, the purchase price, your rehab number, and what you think it's worth finished, and we'll tell you the same day whether the numbers work.
We're a family-owned Connecticut lender, based in Monroe since 1998, with a 4.9-star rating across 461+ Google reviews. We lend in Connecticut, Massachusetts, and Rhode Island.
Yes. AFC funds the fix-and-flip loan and refinances you into the DSCR loan, so the same team that knows the property handles both legs, with no seasoning wait between them.
Plan on it. The certificate is required to rent pre-1978 units, and the refinance depends on rent that is real and collectible. Getting it done during the rehab is cheaper and faster.
If the DSCR drops below 1.0, many programs still work with a larger down payment, which means less cash back at the refinance. Run the deal at a conservative rent before you buy.
It depends on your capital and your goals. Flipping returns cash faster; holding avoids the conveyance tax on exit, builds equity, and depends on rents holding up. Many investors do both.
The seller pays it at closing. Since October 1, 2025, it's $3.75 per $500 of the sale price, plus a second tier on residential sales above $824,000 in 2026.
Written by Gaetano Ciambriello, CEO of AFC Mortgage Group (NMLS #1783508).
AFC Mortgage Group LLC | NMLS #2801 | Monroe, CT | Equal Housing Lender.
This article is for educational purposes only and is not a commitment to lend. It does not quote or guarantee any rate, term, or approval, and it does not constitute financial, tax, or legal advice. Program guidelines, terms, and availability vary and are subject to change. All loans are subject to credit approval, property approval, and Approval Team review.
Business-purpose and investment-property loans are offered through AFC Credit Partners and are not available for owner-occupied properties.
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