BRR Property Sourcing: Buy, Refurbish and Refinance

BRR deals: separate the purchase from the hoped-for valuation

Ask for comparable completed sales for both the current property and the proposed finished specification. Keep the asking price, agreed purchase price and assumed post-works value separate. A discount against an advertised valuation is not proof of value.

The buying brief should identify the target area, property type, total cash available and whether you can hold the asset if refinance is delayed. Search criteria should reflect that downside as well as the preferred exit.

Refinance scenarios and cash left in the deal

Model the project with your finance adviser using an assumed loan amount, costs and completion date. Then test a lower valuation, higher costs and a longer hold.

Compare the cash committed across purchase and works with the amount available after refinance and fees. Distinguish loan proceeds from profit. Letting evidence must support the proposed rent; a spreadsheet alone is not lender approval.

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