Refurb modelling lets you test whether works create enough uplift to justify the capital, time and risk involved.
Key refurb inputs
- Refurb cost or itemised refurb quote lines.
- Refurb duration in months.
- After-repair value, often referred to as ARV.
- Whether refurb is funded by cash, bridge finance or another loan structure.
- Void or rent loss during the works period.
Forced equity
Forced equity is the modelled uplift after allowing for purchase price and works cost. A simple view is: ARV minus purchase price minus refurb cost. Positive forced equity can support a BRRR-style case, but it should be checked against realistic comparables and quotes.
Common risk points
Refurb assumptions are sensitive to cost overruns, programme delays, valuation optimism and finance costs. Use scenario comparison to test conservative and upside cases.