Feasibility study

The feasibility study of a development, from the architect's PDF to the verdict.

A feasibility study answers one question: is this building worth buying at this price? Averu builds it in minutes from the drawings, and shows every number behind the answer.

Minutes
from the architect's PDF to a first verdict on a deal
To the cent
every statement ties to the others and exports to Excel
One number
the highest price you can pay and still reach your target return
The verdict, and the most you can pay

The verdict, and the most you can pay

Returns, equity, bank loan, LTV and LTC on one screen. Set your target return and the solver tells you the highest price that still clears it.

See the product

How Averu builds the study

  1. 01

    It reads the building.

    Drop the architect's PDF. Averu reads every unit with its areas, or you measure them on the plan. Each unit cites its page.

  2. 02

    You set the sale prices.

    Collect real listings near the building. Averu shows the range per typology and the official median for the municipality. You choose the price per square metre.

  3. 03

    It builds the costs.

    Purchase taxes, construction, professional fees, licensing, the works inspection, marketing and contingency, each on its own payment schedule, with the right VAT rate.

  4. 04

    It adds the bank.

    Pick a bank and its terms. Averu draws the loan month by month against the works, charges interest and fees, and repays from sales.

  5. 05

    You read the verdict.

    IRR, return on investment, equity multiple and margin against your own targets, and the highest price you can pay for the building.

What a feasibility study must contain

A study a bank or an investor will accept shows, month by month, where the money comes from and where it goes. In Averu that is:

  • Revenue for every unit, by use and typology, with the month of the promissory contract and the month of the deed.
  • The purchase: price, IMT, stamp duty, notary and registry, agency and legal fees.
  • Construction on the gross construction area, with the builder's payment pattern, retention and contingency.
  • Soft costs: architecture and engineering, licensing fees, the works inspection, insurance, marketing and sales commissions.
  • Taxes: VAT on every cost line, IMI during the works, corporate tax on the profit.
  • Financing: the bank loan, shareholder loans and equity, with interest and fees.
  • The results: monthly cash flow, profit and loss, sources and uses, and the returns.

What if costs rise or sales slow down

A single result is a guess. Averu shows a table of results for a range of build costs and sale prices, and for delays in licensing, construction or sales.

Any case can be saved as a scenario next to the base case, so you compare them side by side.

From the study to the investors

When the deal stands, the same numbers become the investor's page and the presentation. An investor opens a private link, reads a one-page teaser and, after signing online, the full business plan with their own net return.

Nothing is typed twice, so the number in the presentation is the number in the model.

Questions about feasibility studies

What is a real estate feasibility study?

It is the calculation that shows whether a development makes money at a given purchase price. It sets the expected sales revenue against every cost, tax and financing charge, month by month, and gives the return on the money invested.

Which return should a development reach?

Each firm sets its own targets. Many developers look for an IRR around 20% and an equity multiple around 1.5, and compare the net margin with the risk of the project. In Averu you set your targets once, and every deal is judged against them.

How long does a feasibility study take?

By hand in a spreadsheet, four or five hours for one building. In Averu the first verdict takes minutes, because the areas, the taxes, the schedules and the financing are computed for you.

Can I see how a number was calculated?

Yes. Switch on Explain the numbers and each figure shows its formula and its inputs. The statements also export to Excel.


Bring one of your own buildings.

In a demo we run your architect's PDF through Averu with you: the areas, the prices, the feasibility study and the investor page.