Sitges and Compte de Urgel: Two Projects, Two Kinds of Logic

Two completed DNPI Capital projects follow different logic. In Sitges, the status of the plot (permits and licences) changed between purchase and sale; on Compte de Urgel in Barcelona, the condition of the flat (the renovation) changed. The difference before other costs is similar, €230,750 and €233,770, but it is neither a return nor net profit. The difference is the sale price minus the purchase price and the costs listed; taxes, financing, paperwork and other costs are not included. Past results do not guarantee future ones.

What do the figures of the Barcelona property investment cases look like side by side?

The difference is simple arithmetic: 760,000 − 509,250 − 20,000 = 230,750 and 720,000 − 410,000 − 76,230 = 233,770. They differ from each other by €3,020. The project pages on the site are Sitges and Compte de Urgel, and a detailed analysis of each is in the Sitges case and Compte de Urgel.

What changed in each project?

In Sitges the legal status of the asset changed between purchase and sale: the plot was bought for €509,250, permits and licences took €20,000, and it was sold with the licence for €760,000. In a project like this the main question is whether the licence will be granted and how long it will take. The project term was two years.

On Compte de Urgel the flat was bought for €410,000, the renovation cost €76,230 and it was sold for €720,000. Here the condition of the asset itself changed. How much of the difference came from the renovation and how much from the market, the project figures do not separate. The main questions are different: how accurate the estimate is, whether there are hidden defects, how fast a buyer is found at the exit price. Renovation and construction on the projects is done by BCNYARD, SLU: an independent construction company, a contractor under contract.

What do these figures not show?

• The investor's return. The project page says that without a full register of costs and the actual distribution of profit, net or annual return cannot be established. So I do not divide the difference by the costs and I give no percentages: such a figure would look like a return without being called one.
• Taxes and financing. They are outside the difference. For a non-resident, for example, the tax on the gain from selling property is 19% (art. 25 TRLIRNR), and that is only one item among the other costs.
• The term on Compte de Urgel. Without a term the annual return cannot be calculated, and projects of different duration cannot be compared by the size of the difference.
• Independent verification. The Compte de Urgel page states that the figures were provided by DNPI Capital and are not confirmed by an independent audit.
• How often this result occurs. Two projects are not a sample. They do not say how often a project ends with a similar difference.

How do you read a case from any investment company?

Four questions help tell a case study from advertising. What exactly changed in the asset: status, renovation, market, and whether their contributions can be separated. What is included in "costs" and what is not. What the term was. Who confirmed the figures, and by what document. The same set works for checking an operator's proposal, see the risk map and 20 questions before the meeting. If a case has no term or no list of costs, there is nothing to compare it with.

Who is this review not suited for?

It is not suited to someone looking in two projects for a forecast for their own money: there is no forecast here. It is also not suited to someone who wants to compare percentages: percentages without a full register of costs would be invented. You can run your own assumptions through the investor calculator.