top of page
  • How do you calculate my return on investment (ROI)?
    It's a combination of annual returns and the final upside payment. Let's say you, the investor, put in 20,000,000czk on a building that cost 120,000,000czk to buy. The deal is financed with 70,000,00czk of quality debt, and so other investors put in 30,000,000czk of equity. You now have 40% of the equity on this building. Walker-Steady pays out 80% of the profit upside to equity investors. Let's say at maturity of 36 months, the profit upside is worth 20,000,000. This amount is split up between equity investors. Your pay-off as a holder of 40% of equity is: ​ Investor Upside Return = Total Upside * Your Equity Share * Upside Split ​ = 20,000,000 * 40% * 80% = 6,400,000czk ​ That's a return on your investment (ROI) of 32% and that's only half of the story. If the deal is financed by interest-only debt, Walker-Steady offers an annual cashflow. In this case, you benefit from the upside profit and the regular cash flows up to maturity. Let's say the deal you invested in is offering a 1.6% annual cash flow as a bonus. This means that your equity of 20,000,000czk is generating 320,000czk per year in returns. ​ Your Total Return on Investment = Annual Cashflows + Equity Upside Return ​ Year 1 Cashflow = 320,000czk Year 2 Cashflow = 320,000czk Year 3 Cashflow = 320,000czk Year 3 Upside Return = 6,400,000czk = 7,360,000czk ​ If the project features annual cashflows, the return on your investment (ROI) is 36.8% over 36 months. Not bad. *Indicative only. As with any investment, figures are not promises, nor are guaranteed. Investor takes responsibility for amount invested and is only liable up to that amount. Not all projects feature annual cash flows to equity investors.
  • How do you calculate my internal rate of return (IRR)?
    The internal rate of return (IRR) is a way to calculate the return on your investment per year. It is the result of all projected future cashflows 'discounted' back to today. This shows you how much your investment is making you every year. Continuing on the example where you have 20,000,000czk in equity invested, your IRR over the investment period of 3 years looks like this: ​ IRR = Net Present Value of All Future Cashflows ​ = 320,000czk / (1 + IRR)^1 + 320,000czk / (1 + IRR)^2 + 320,000czk / (1 + IRR)^3 + 6,400,000czk / (1 + IRR)^3 + 20,000,000czk / (1 + IRR)^3 ​ = 11.16% ​ With the help of a financial calculator (or an online one) we can determine the internal rate of return on this sample project is 11.16%. This is your profit per year. Is 11.16% good? Compare that to today's alternatives: Bank savings acccount: 0.4% Passive stock market index: 6% P2P lending: 6% REITs: 7% Inflation will always take away 2.8% of those earnings. Your best move is to invest with Walker-Steady earning 11.16% per year on your investment which is backed by a real building which is constantly appreciating and where people will always want to rent. 11.16% isvery good. Remember, the number that matters to you the most is the return on your investment (ROI). At maturity, you profit 7,360,000czk which makes the ROI 32%. Every Walker-Steady deal you invest in will increase your net worth. Walker-Steady builds your net worth by offering you the highest possible, realistic ROI on the market. Invest with us an we will create your wealth.
  • How does real estate appreciate in value?
    Real estate value is based on three things: 1. The value of the land (legally included with the building) 2. The value of the building 3. The income generated by the property (including land and building) The first way to appreciate real estate is with time (given it's a good, in-demand property in a sought after location, like the center of Prague). This is referred to as 'natural appreciation' and it's based on renter demand over time. The second way to appreciate real estate is by renovating the building and investing in value-adding features like a security system, storage cellars, and modern parking amenities. This is referred to as 'forced appreciation'. Both natural and forced appreciation increase the value of the property and command higher rents. This increases the income generated by the property which ultimately increased the re-sale value of the property. The next buyer will pay for the property based on the Net Operating Income (rent revenue - operating costs) and the yield they expect to receive. An example: A building is purchased for 80,000,000 czk with 18 units that has a yearly revenue of 3,000,000. Over the lifetime of the investment, the building is repainted, the elevator is repaired, balconies are added, the attic is turned into a luxury flat, and the roofs are renewed. The tenants initially paid 13,000 czk per flat but now that the property has been upgraded, they are asked to pay 15,000 czk. If there are 18 units, the new Net Operating Income increases by 432,000 czk. Let's say the current real estate market yields are at 2.5%. That means a buyer will pay this 2.5% for the new 432,000 of value. That equates to 17,280.000 czk (=432,000/2.5%) of new value. The property has now been force appreciated to a new value of 97,280,000 czk. Over the lifetime of the investment, that equates to a 21.6% appreciation of the real estate property. To see how investor returns are calculated, please read "How do you calculate my return on investment (ROI)".
bottom of page