Stress test (+3% repricing)

Stress test — recomputing a leveraged deal under adverse assumptions before committing: this course’s standard is +3 percentage points at repricing, plus −10% rent and +2 months vacancy as secondary rows. A deal that only works at the promo rate isn’t a deal; it’s a bet that the fixing period lasts forever. If DSCR at +3% drops below 1.0, the purchase is a scheduled crisis with a closing date. Borrowed from bank practice, applied to yourself.

First used in: 3.1 · Leverage: the sword’s both edges