Due diligence
A careful review of a property before buying it: paperwork, legal status and history. It is what keeps an amazing price from turning into a headache two years down the road.
Calculator guide
How to simulate the costs and return of a property bought at auction in Brazil with the Bradil Calculator before you bid — in just a few minutes.
These terms refer to Brazilian real estate law. We keep the legal term in Portuguese, with a translation next to it.
Step by step
How to use the calculator
- Step 1
Reverse simulator (optional, but recommended)
If you already know the minimum ROI you need for the deal to be worth it, enter that percentage at the top of the screen and click “Calculate highest bid”. The tool uses the percentages and amounts already filled in below to tell you how high you can bid without missing that target. “Use this value as the bid” sends the value straight to the winning bid field.
- Step 2
Inputs
Fill in the winning bid amount, the court or tax appraisal value of the property (the reference for calculating the discount you got) and the estimated resale value, based on comparable properties in the area. Also enter the estimated time, in months, until the resale.
- Step 3
Direct acquisition costs
The tool comes with reference percentages: auctioneer’s commission, ITBI (municipal property transfer tax), registration at the cartório (registry office) and legal advice. For ITBI, choose whether your municipality’s rate applies to the winning bid or to the appraisal/tax value — depending on the city, this changes the result a lot. Also fill in installment interest on the bid and court deposits or fees, when there are any.
- Step 4
Possession, debts and renovation
Enter estimated amounts for debts not covered by the bid (IPTU, HOA fees), a possible imissão de posse (possession) lawsuit or eviction negotiation, insurance during the works and the renovation cost. The tool automatically adds a contingency (15% by default) on top of the renovation to cover surprises — adjust that percentage if you prefer a different safety margin.
- Step 5
Exit costs and summary
Set the sales commission and the income tax rate on capital gains. The summary, right below, calculates the total investment cost, the estimated net profit and the return indicators.
Summary
Understanding the indicators
- Total ROI
- Net profit divided by the total cost invested, from start to finish, regardless of how long the deal takes.
- Average monthly ROI
- The compound monthly rate that, repeated over the number of months entered, reaches the same total ROI. It lets you compare deals with different timeframes.
- Net ROI over 12 months
- The compound monthly ROI projected over a year. It is a reference rate for comparison, not a promise of repeating the deal throughout the year.
- Discount to appraisal
- How far the winning bid is below the court or tax appraisal. It helps you size the deal’s safety margin.
Winning bid + auctioneer's commission + ITBI + registration + invoiced renovation + sales commission. Legal advice, debts, possession costs and insurance reduce your profit (and count in the ROI), but usually do not reduce the tax basis. The tax basis is an estimate: the official capital gains calculation should be confirmed with your accountant.
Glossary
Useful terms
The terms you need to know before buying a property — one a week on Bradil’s Instagram, all gathered here.
3 terms
Registro de incorporação (development registration)
Under Brazilian law, the filing, at the Real Estate Registry Office (Cartório de Registro de Imóveis), of the documents that make a development legally exist. Without it, the developer cannot sell the units (Law 4,591/64, art. 32). Ask for the registration number and check with the registry office before signing.
Legal basis: Brazilian Law 4,591/1964, art. 32Share
Patrimônio de afetação (ring-fenced project assets)
An optional regime under Brazilian law in which a development's land, construction and funds are kept separate from the developer's own assets, with their own accounting. If the developer goes bankrupt, the buyers can decide to continue the construction (Law 10,931/2004). Ask whether the development has adopted the regime.
Legal basis: Brazilian Law 10,931/2004Share
Checklist
Before signing anything, confirm:
- Registro de incorporação (development registration)
- Patrimônio de afetação (ring-fenced assets), if the development adopted it
- Delivery track record
- Cancellation terms
- Construction warranties
- Financial strength
Simulate the auction in the Bradil Calculator
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Notes
A low price is not the same as a good opportunity.
Before placing a bid, Bradil analyzes location, legal issues, appreciation potential and renovation cost.
Financing is a tool.
Financing is neither the villain nor a magic fix: it is a tool.
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