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  • Writer's pictureRyan Walker

Investment Property: Prague

The very first investment project was a family flat in Prague 9. It was a no-money down deal, and all capital was raised and financed.


Property Parameters


Location: Prague, Czech Republic


Year of Entry: 2020, Covid Maturity: 2023


Investment Strategy: Force appreciation with renovation and upgrading to modern amenities, hold for natural appreciation, refinance, convert to rental property.


Size: 63m Cellar: 7m Balcony: Two, 10m and 20m squared Parking: Yes


Forced Appreciation Strategies:

  • Negotiated to use the neighbor's roof as a new, second terrace for the flat

  • Walls were demolished to create a bigger bathroom, the shower was built-in to maximize space

  • Old hardwood floors, doorframes, and doors were salvaged and restored

  • Kitchen was relocated to another room, pipes re-mapped

  • Custom, thought-out design work was done to each room

 

Return on Investment

Purchase Price

4,500,000 CZK

Cost of Reno/Upgrades

500,000 CZK

Sale Price (as at Sep 2023)

7,200,000 CZK

ROI (Cost Method*)

44%

ROI (Out of Pocket Method**)

​82%

*ROI (Cost Method)= (Sale Price - Purchase Price) / (Purchase Price + Reno Costs)
**ROI (Out of Pocket Method) = (Value at Maturity - Initial Purchase Value) / Sale Price

Returns To Investors

Initial Investor Equity

800,000 CZK

Number of Investors

2

Investment Gain*

2,200,000 CZK

Distributions Paid to Investors**

1,760,000 CZK

Equity Multiple***

2.75 X

IRR****

10.28%

*Investment Gain = Sale Price - Purchase Price - Reno Costs

**Distributions Paid = Investment Gain * 80% Profit Split

***Equity Multiple = Total Cash Distributions / Investor Contributions

****IRR: Risk weighted average annual return. More info here

 

BEFORE


 

AFTER


 
 

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