Platinum Coach – Reverse Feasibility – 7th April 2021

Working Backwards to Guarantee Profit Before You Buy

This Weekly Wednesday Webinar introduces one of the most powerful decision-making tools in property investing — reverse feasibility. Delivered as a practical, step-by-step training, this session teaches investors how to assess a deal before they commit, by starting with the end result and working backwards to determine whether a project is financially viable. 

Designed for members refining their deal analysis skills, the session reinforces a core principle: successful investors don’t guess their numbers — they engineer them.

Understanding Reverse Feasibility

Reverse feasibility flips the traditional approach to deal analysis.

Instead of starting with a purchase price and hoping the numbers work, investors begin with the likely end value of the completed project. From there, all costs — including selling costs, holding costs, strategy costs and profit — are deducted to determine the maximum purchase price.

This creates a clear financial boundary. If a property cannot be secured below that price, the deal does not proceed.

The session positions reverse feasibility as a fast, high-level filter — a way to quickly determine whether a project is worth deeper investigation before committing time and resources.

Building Confidence Through Data, Not Assumptions

A key theme throughout the session is decision-making through evidence.

Every step in a property project requires a decision, and every decision should be backed by data. Reverse feasibility provides a structured way to gather that data early — reducing risk and increasing confidence.

Rather than relying on hope, market hype or emotional attachment to a deal, investors are encouraged to use this process as a checkpoint. If the numbers don’t work on paper, they won’t work in reality.

The Step-by-Step Reverse Feasibility Process

The training walks through a clear and repeatable framework.

It begins with selecting a target location that aligns with your personal circumstances — including risk tolerance, available working equity and willingness to travel. From there, investors are guided to become area experts by breaking suburbs into smaller “pockets” and analysing them individually.

The next step focuses on comparable sales. By studying what similar properties have actually sold for — not just what they’re listed for — investors can determine a realistic end value for their project. This also helps define the exact product the market is willing to pay for, including configuration, features and level of finish.

Once the end value is established, the remaining inputs are gathered: selling costs, renovation or development costs, holding costs and purchase costs. These are then brought together in a simple feasibility model to calculate the maximum purchase price.

Understanding What Drives Profit

One of the most important insights from this session is where profit is created — and where it is lost.

If an investor overpays at the start, the only place that loss can come from is the profit margin. Reverse feasibility protects against this by clearly defining the ceiling price before entering negotiations.

The session also reinforces the importance of conservative assumptions. Investors are encouraged to assume a flat market rather than relying on future growth, ensuring deals stack up based on current data rather than speculation.

Gathering Reliable Cost Estimates

A practical component of the session focuses on how to source accurate cost information.

Rather than guessing, investors are encouraged to engage with trades, agents and consultants early — asking questions, requesting estimates and building a database of real-world costs. Even without a specific property, it is possible to obtain indicative pricing using square metre rates, room-based estimates or before-and-after examples.

This process not only improves feasibility accuracy but also helps build a reliable team for future projects.

Using Reverse Feasibility as a Decision Filter

Importantly, this process is not the final feasibility — it is an early-stage filter.

Its purpose is to quickly identify whether a deal is worth pursuing further. If the numbers show limited or no profit potential, the investor can move on without investing significant time or energy.

If the numbers stack up, the investor can proceed with deeper due diligence, confident that the project has a strong foundation.

Session Summary

“Reverse Feasibility” equips you with a disciplined, data-driven approach to deal analysis.

It shifts your mindset from reacting to opportunities to engineering them — ensuring every deal you pursue has a clear path to profit before you ever commit.

For members progressing through their investing journey, this process becomes a critical safeguard — helping you move faster, make better decisions and avoid costly mistakes.

Actions to Take After This Session

• Apply a reverse feasibility to one potential deal or suburb you are currently researching.
• Identify a realistic end value using comparable sales — not listings.
• Break down all key costs at a high level, including selling, holding and strategy costs.
• Calculate your maximum purchase price and use it as a strict guideline.
• Begin building a database of cost estimates by speaking with agents, trades and consultants.