Feasibility

Before you make an offer, how much room is there in the numbers?

In this walkthrough, we'll use FlipPro's forward feasibility calculator to test an example renovation,

then see what changes when the budget and timeline increase.

Open feasibility and choose forward.

This starts with a proposed purchase price and estimates the outcome at your target sale price.

Give the scenario a name so you can recognise it later.

We're using an illustrative example, rather than a property recommendation.

Here, the purchase price is $500,000 and the target sale price is $700,000.

The difference between those prices isn't your profit.

The renovation, transaction costs, finance and holding period all need to be included.

Under renovation, you can start with a percentage or enter an exact allowance.

We've entered $50,000.

For this example, we're modelling 70% borrowing over nine months.

Check the finance and cost assumptions against your own circumstances before relying on the result.

The calculator shows about $81,500 in gross profit,

with a profit margin of 11.6%.

You can also see the estimated cash required and the cost breakdown.

Return on cash and profit margin measure different things,

so keep those labels in mind when comparing scenarios.

Now let's change the renovation allowance to $70,000.

The gross profit falls to about $61,500 and the margin drops to 8.8%.

That extra $20,000 comes straight out of the estimated profit.

What if the project also takes longer?

Change the holding period from nine months to 12.

The holding costs increase and the gross profit falls again to about $52,000.

The margin is now 7.4%.

Save the run to keep a snapshot of the scenario.

That's the value of testing the assumptions before you commit.

You can see how much room the deal has when costs or timing change.

Open FlipPro on desktop and work through your own example.

These are estimates, so verify the inputs and complete your due diligence.