Interview: This is what it’s all about!

To successfuly complete a Fix & Flip project, the ultimate goal is to make a profit. The basic idea of Fix & Flip is to increase the value of a property. You buy a cheap but lucrative property, add value to it yourself and sell it at the end for a profit. This means you have to work cost-efficiently to keep your expenses low and thus increase the profit.

We conduct the interview with Immobilien-Erfahrung.de (in conversation “IE”). We talk in the interview about:

• The purchase and finding of lucrative properties
• Saving costs when upgrading and renovating
• The profitable sale of the object
• Bonus topics such as taxes, legal forms and financing

What is Fix & Flip?

FIV: Let’s start with the basics. Can you start by explaining what Fix & Flip is and how it works?

IE: Of course! Fix & Flip is a strategy or even method from the real estate world that focuses specifically on trading real estate. That is, unlike traditional real estate strategies where properties are held to generate long-term returns, Fix & Flip actively trades properties. The core aspect is to increase the value of real estate in order to generate profit when trading. The increase in value is achieved through cost-effective upgrading and renovation.

So the strategy consists of three basic steps – buying, upgrading and selling.

Fix & Flip Find & Buy Property

FIV: We have already talked about Fix & Flip in one of our articles and have shed some light on the three steps. Surely we could not clarify everything there what an expert with experience can report about it. Let’s go through the three steps again and see what you can tell us. Let’s start with the first step – the purchase.

IE: Yes, with pleasure. Getting started is the biggest difficulty! In order to start trading real estate at all, you need real estate. So the first step is all about acquiring real estate. This is also one of the most complicated parts of Fix & Flip. First of all, you need to create and work through a criteria checklist when searching for the perfect property.

Criteria for the selection of Fix & Flip real estate

IE: The checklist for the real estate search should include important key data that are important to you as a flipper. Basically, the location and the condition are the basis for the decision.

The property must be in an advantageous location for you. Advantageous in the sense that it is an attractive area for future buyers – so it can be sold quickly – and is still in an affordable location for you. A-locations are not advantageous, since city centers, for example, are not worthwhile in terms of price. B-locations or developing C-locations are much more suitable.

In addition, the condition of the property must be considered. Since the focus is on “cheap” properties, these often also harbor problems. This is fine to a certain extent, of course, as the strategy involves “fixing” after all, but it should still not be overestimated.

With the Fix & Flip it is important to avoid sanitation!

These are too costly and time-consuming. The building fabric of your object should therefore basically be in tact.

FIV: With the basic criteria in mind – where is the best place to look for real estate?

Search & buy objects: How do I proceed?

IE: Online portals provide a solid basis for the search. Here, offers in the corresponding location can be found and compared with each other. So you get a rough picture and an idea of the price. However, I would rather use the online portals for research and not for the purchase.

You get the better buying options privately through off-market properties. Ideally, you already have a network of people who will contact you as soon as they hear about a sale. If you don’t have that, you have to look for the personal contact yourself. Either you show yourself, for example through marketing and let customers come to you, or you take the initiative and approach customers personally.

To explain this now would go beyond the scope of this article.

FIV: Okay good. We’ll summarize the first step again:

• Checklist with criteria for the property
• Location & condition of the object are important
• Avoid objects in need of renovation
• Use online portals for research
• Off-market real estate from private contact

What would come next? The upgrade?

IE: I would talk briefly beforehand about financing options for the purchase.

Fix & Flip financing: which loan is suitable?

Just recently I talked to one of our partners about an interesting topic and that is Fix & Flip without equity. In order to run Fix & Flip without equity, you need outside capital. The debt capital is provided through loans and credits. In discussing which type of loan was best, I first realized how important the question of financing is in the first place.

Therefore, I wanted to briefly list the most important points again.

The funding can be divided into two areas

The financing of the property itself and the financing of the renovation process. Both areas can be financed individually but also in combination. This is decided according to one’s own ideas. There are different types of loans for both options.

Credit types at a glance

To finance the entire project, in principle, all conventional loans can be used. Hard money loans are particularly suitable for the purchase of the property. These are based only on the value of the property, not on the equity.

There are several good financing options for upgrading. Small loans are the simplest solutions. But credit lines are more interesting! These give in principle a budget from which you can take what you need. Accordingly, only the interest is paid and repaid what is consumed.

FIV: I’ll hold on again:

• Purchase financing
• Renovation financing
• Separate or combined
• Regular loans
• Hard Money Loans
• Small loans
• Credit lines

With funding out of the way, there’s not much standing in the way of the upgrading process right?

Upgrading real estate: saving costs & increasing value

IE: Yes, that’s right. Since the process of upgrading is very detailed, I’ll try to be brief and mention only the most important things. We also have complete explanations and articles on our site.

Simply put, this step is about the actual value creation and thus the generation of profit. Here, the property, which is unattractive for the end users, is made attractive. This is achieved through cost-effective renovation measures.

Cost effective is the saying here!

Care must be taken to increase the value effectively without great expense. As already mentioned, extensive renovations are not advantageous.

The best way to increase the value of the property is to replace the flooring, kitchen and plumbing fixtures, new windows and doors, and garden and patio maintenance.

Those who are not skilled in handicrafts will find the best help and advice from craftsmen.

FIV: So the areas where renovation can be effective are:

• Flooring
• Bath
• Kitchen
• Windows
• Doors
• Garden
• Terrace

After upgrading, is the property then ready for sale?

Fix & Flip sale: exposé, offers & home staging

IE: In principle, yes! Already during the revaluation process, an appraiser can start valuing the property. This gives you an approximate idea of the selling price at an early stage. In addition, the preparation of the exposé can also be started promptly and the listing subsequently published.

For the creation there is one more crucial trick – home staging!

FIV: What exactly is it?

Home staging to prepare the display

Home staging is a simple trick to make the living space look more attractive for the pictures of the exposé. In the process, the rooms are made to look alive. For this purpose, no real furniture is used, but specially made cardboard furniture. This saves energy and costs for a “move”.

As soon as the exposé goes on the market you wait!

And when you’ve received enough offers, you compare them and negotiate if necessary to get an even better price.

After the selection of the buyer then follows only the notary appointment and the transfer of ownership.

Finally, the profit can be calculated. For visualization there is the Fix & Flip calculator on our site.

FIV: The sales process is now over. What happens to the profit? Surely it has to be taxed?

Fix & Flip Taxes: How much profit am I left with?

IE: Absolutely correct. Of course, taxes are due on fix & flip profits, just like anything else. What taxes and especially how much depends on the legal form you traded in.

As an individual or sole proprietor, regular income tax must be paid. Depending on how high your profit was in the end is assigned to a certain tax rate.

These tax rates are recorded in the tax progression.

If you plan to operate Fix & Flip for a longer period of time, it is worthwhile to establish a limited liability company. This requires a share capital of 25,000 euros, but you save a lot of taxes. In addition, your own capital is no longer liable but only the company limited to the paid-in capital.

As a GmbH, you then only pay corporate income tax of around 15% and trade tax of 3.5%.

I have now only given rough key data on taxation. Of course, the topic can be further elaborated.

If you want to know more about it, please visit our Fix & Flip guide. Among other things, I can recommend the articles Fix & Flip Taxes, Property Appreciation and Fix & Flip Sales.

FIV: Thanks so much for your time and insights into the Fix & Flip strategy!

IE: Gladly!

Summary: 10 Learnings about Fix & Flip

Let’s briefly summarize the most important points once again.

	Learning Fix & Flip
1	The basic idea of Fix & Flip is to increase the value of properties
2	The 3 steps of Fix & Flip: Buy, Upgrade & Sell
3	Checklist for the real estate search: consider location & condition
4	Find & buy objects via online portals & private contacts
5	Finance project & find suitable financing type
6	Cost-effective upgrading & renovation
7	Avoid objects in need of renovation
8	Have property valued & create exposé
9	Exposé prepared by home staging
10	Settle contract, transfer property & calculate profit (pay attention to taxes)

Why finance?

Acquiring a property is an important decision, whether as a capital investment, a home of one’s own or as a private provision. With the different types of financing it is possible for everyone to make his first home or his first capital investment possible. Before you enter into a financing you should deal with some points before. You should check your equity, consider the incidental acquisition costs, calculate interest and repayment, housing allowance and reserves, and calculate your monthly burden.

Own home or real estate as an investment

Buying your first own apartment or house is a purely emotional decision, whereas in the case of real estate as a capital investment, it is purely a matter of the economic aspect and therefore an emotionless decision must be made. In both cases, however, it is important to deal with a checklist and the ancillary purchase costs in order to avoid serious mistakes.

Buy first apartment

Buying your first own apartment is a great experience in life. To ensure that nothing goes wrong when buying your first apartment, it’s best to have a checklist at hand!

• Buy first apartment
• Buying an apartment: Checklist

Purchase price + ancillary purchase costs / credit rating (rule of thumb: how much is left over in the month?)

Buying an apartment or house always involves additional costs! To be able to cover these, you should think in advance about how high the maximum purchase price may be and how much money is available per month.

• Maximum purchase price
• Incidental purchase costs

Types of financing

If a property is purchased, the purchase price is usually paid off with the help of real estate financing. For this purpose, the buyer can choose from various types of real estate financing. From annuity loans, partition loans, full financing, construction financing to many other types of financing.

But what does financing actually mean? It is a measure for the procurement and repayment of capital. But some forms of financing require security in the event of default, which must then be recorded as a mortgage or land charge in the land register.

Annuity loan: Probably the best-known form of financing

An annuity loan is a typical form of real estate financing. The fixed installments must be paid regularly and consist of an interest and repayment portion. The special feature of the loan is that the amount of the installment remains the same throughout the entire term, but the ratio of interest and repayment changes nevertheless. With each payment, the loan debt decreases and the interest portion thus decreases, but the repayment portion increases.

Who is this type of financing suitable for? For security-conscious investors who want to count on fixed rates over the fixed interest period.

The most important in a nutshell:

• Fixed rates
• Composition of interest & repayment portion
• Steady rate
• Change of the interest & redemption ratio

Advantages and disadvantages of the annuity loan

Probably the greatest advantage of this typical form of financing is the constant installment, which allows a fixed monthly budget to be planned precisely. It is also often possible to make unscheduled repayments at certain times and thus repay the loan more quickly. One of the disadvantages, however, is a long fixed interest rate, which means that you are tied to monthly installments for a longer period of time. If your personal situation changes and you want to repay earlier, you will have to pay a high full repayment penalty for the early repayment. After expiration of the debit interest rate commitment, follow-up financing is usually required; the interest rates are based on the current market investment, which can be either positive or negative.

Advantages:

• High planning reliability
• Fast redemption
• Decreasing interest burden
• Accurate calculation of follow-up financing
• Residual debt fixed from the beginning

Disadvantages:

• No change of contract possible
• Agreement of unscheduled repayments for flexibility
• Credit institutions do not always accept unscheduled repayments
• Borrower must assume full repayment penalty

Reverse mortgage: mortgaging the owner-occupied home

There are different forms of financing to finance the dream of owning a house or apartment. The reverse mortgage is one type of many financing options. It is a loan that is paid out by an insurance company, bank or private individual. The basic idea behind it is that property owners borrow against their home and in return receive a loan with a fixed term from a bank, insurance company or private individual. The loan amount is then transferred as a monthly annuity or a one-off payment. A real win-win situation: owners can stay in their home and even supplement their pension at the same time.

Who is the reverse mortgage suitable for? This form of financing is particularly worthwhile for older people who are already retired and no longer want to leave their home, but still want to supplement their pension.

• Disbursement of a loan by insurance company, bank or private person
• Mortgaging of the home
• In return receipt of a loan with a fixed term
• Paid out as a monthly pension or a one-time payment

Advantages and disadvantages reverse mortgage

Do you have little or no equity capital available for buying a house? Then the reverse mortgage is exactly the right form of financing for you. It is especially suitable for retirees who have paid off their property with savings and income all their lives. A special advantage is that owners can live in the property until the end of their life and receive money for their property during that time. The pension can thus be supplemented. Thus a high planning security is created, since the height of the annuity, interest rate and running time are specified in advance. Clear disadvantages of this form of financing are fees and the interest rate of the loan. There may also be closing fees if the average age is exceeded and the inheritance is significantly reduced.

Advantages:

• Lifetime right of residence
• Pension is improved
• No interest or redemption payment
• Heirs can redeem real estate

Disadvantages:

• High fee costs
• Low payout amounts
• Elimination of inheritance
• Maintenance of the property

Here you will see the verification of the equity and monthly income, in order to then be able to set up a type of financing:

Repayment loan: Decreasing installment burden during the term

An amortizing loan is a particular form of financing characterized by a decreasing installment burden over the term of the loan. The interest portion decreases from installment to installment, so that it constantly decreases and becomes more and more similar to the repayment amount. Wondering if the amortizing loan is right for you?

If you want to pay off your loan quickly and efficiently, then this form of financing is suitable for you. However, you should have a regular and solid income so that the high installments can be paid at the beginning.

• Decreasing rate burden over the term
• Constant reduction
• Fast & efficient redemption
• Regular, solid income should be available

Advantages and disadvantages of the amortizing loan

The amortizing loan brings with it advantages and disadvantages that should definitely be weighed up against each other before concluding a financing deal. A significant advantage is that the borrower pays off a fixed amount per month, thus reducing the residual debt. However, the fact that the residual debt remains relatively high at the beginning and only decreases sharply at the end of the term is a clear disadvantage.

Advantages:

• Faster reduction of residual debt & interest amounts
• Free capital can be used
• Landlord may use proceeds from rent for increased repayment of principal
• Low total cost of credit

Disadvantage:

• Residual debt high at the beginning
• Additional costs for early reduction of residual debt
• Loan form rarely accessible to private individuals
• Longer term in most cases

Building savings contract: Combination of loan & savings

Very simple! This is a combination of real estate loan and usual savings. First, it is determined how much should be saved per month, which then results in the building savings amount. The contract is divided into several phases. In the first phase, the saver pays in a fixed amount each month. He then receives interest on this amount.

The second phase begins when a certain amount has been saved, for example 35 percent of the total amount. Then comes the allocation. You receive the right to a building loan at a lower interest rate for the remaining amount. The building savings contract is suitable for people who want to finance their dream of owning their own property as cheaply as possible. However, this financing option is not intended for short-term financing goals.

• Combi of loan and savings
• Different phases
• Monthly fixed amount with interest
• Allocation starts from a saved amount
• Right to soft loan
• Long term financing

Advantages and disadvantages of a building savings contract

A building savings contract has advantages and disadvantages. You can read more about this type of financing here.

Advantages:

• High security
• Capital guarantee
• Profit through government subsidies
• Intended use flexible

Disadvantages:

• Interest on credit balances lower in the initial phase
• High processing fees
• Monthly charge higher than other financing

Full financing: With little capital to own a home

There is little or no capital available for a real estate purchase? There is no opportunity to save money or you have just started to do so? This is exactly when full financing comes into play. The credit institution then takes over the missing equity capital and finances if necessary also the building additional costs. But then you have to keep in mind that the interest rates are higher.

• Little to no capital available
• Credit institution assumes equity
• Financing of ancillary construction costs
• High interest

Advantages and disadvantages of full financing

A property can be financed also quite simply without own capital funds, that can bring advantages, but also disadvantages with itself. First of all, short waiting periods are guaranteed, because you do not have to save until a certain point in time, the dream of owning your own home can be fulfilled directly. In addition, it is always good to finance as early as possible, so that one is free of costs before retirement age. Another advantage is that possible savings can be used for repairs or new furniture. But what are the disadvantages? There is a risk that the repayment can cause problems due to possible changes. This can be, for example, unforeseen unemployment or even incorrect calculation. Another point is high interest rates.

• No long waiting time
• Earlier repayment of the loan
• Equity subject to change

Disadvantages:

• Higher interest rates
• Longer redemption period
• Unforeseen life changes

A number of staff review the current market rate and adjust it to current loans:

Variable loans: Flexibility through variable interest rates

This is a type of financing that is particularly suitable for short-term real estate financing. The good thing about this form of financing is that you do not have to pay fixed debit interest, because the interest rate is always adjusted to the current market interest rates. The interest rates are always based on the Euribor money market rate. But what do you mean by Euribor interest rate? Very simple. It is a key interest rate of the European Central Bank. The interest rates are adjusted every three to six months to the interest rates of the variable loan.

But for whom is this form of financing actually suitable? Clearly for buyers with a willingness to take risks. Likewise for buyers and builders for whom financial security is guaranteed.

• Short-term real estate financing
• No fixed debit interest
• Adjustment to current market interest rate
• Interest is adjusted to the loan every 3 – 6 months

Advantages and disadvantages variable loan

Are you interested in a variable loan? Then you should definitely weigh up the pros and cons beforehand. It is clear that this is a high-risk loan. An unexpected rise in interest rates not only leads to higher costs, but also increases the loan rate. However, the loan also comes with its advantages. If the interest rate level remains the same over time or even decreases, then you save on the real estate loan. In addition, the loan can be terminated with a notice period of 3 months. Alternatively, borrowers also have a right to make unscheduled repayments of up to 100% at any interest rate adjustment.

Advantages:

• At Euribor waste useful, interest rates more favorable
• High security
• Cancelable at any time

Disadvantage:

• Development of interest rates uncertain
• Interest rate fluctuation makes monthly costs unpredictable

Construction financing with a life insurance

Normally, a construction loan is combined with a capital policy. This means that the buyer pays interest only at regular intervals. The repayment of the loan follows with the disbursement of the loan.

Advantages and disadvantages construction financing

As with any financing, there are advantages and disadvantages to financing construction with life insurance. One significant advantage is that a home savings contract with life insurance is more favorable than an annuity loan and the loan is also secured in the event of death. One disadvantage is that the return is very low.

Advantages:

• More favorable than a normal annuity loan
• Credit protection in the event of death

Disadvantages:

• Low return

Connection and interim financing

These types of financing are referred to as financing that is usually only invested for a short period of time. Here you can learn more about the respective interim financing:

Follow-up financing: renegotiation of the loan

This form of financing is a renegotiation of an existing loan. If the previous construction or real estate financing has expired after the fixed-interest period, one must deal with the follow-up financing from this point at the latest. Many buyers take out a loan to fulfill their dream of owning their own property. The fixed interest period for a house financing goes between five and fifteen years. A multiplicity of borrowers do not create it however in this time span the loan back to pay. This is precisely when borrowers can agree on a new arrangement for repaying the remaining debt.

Interim financing: bridging bottlenecks

Interim financing is financing that only runs for a short period of time. This form of financing can be used to bridge financial bottlenecks for a certain period of time. The owners of a property can provide immediate financial resources and then use them as equity.

Refinancing: restructuring of the loan

What is actually meant by refinancing? It means an adjustment or restructuring of a loan. Whether you have a personal or business loan, you should definitely have that loan reviewed every few years to make sure you have the most favorable loan. For example, you may have taken out many small loans that can be combined into one.

Equity: Use for own benefit and capital investment

To finance a property, the bank requires a certain amount of collateral. The better your credit rating, the less equity you have to put up. When buying the first property, two basic rules apply for personal use and capital investment.

• Self-interest = As much equity as possible
• Capital investment = As little equity as possible

The equity subtracted from the total investment sum results in the loan sum required from the bank. This loan is paid back by a monthly repayment, including interest.

What is important in the repayment?

• Capital investors: Interest can be deducted for tax purposes
• Owner-occupier: interest cannot be deducted for tax purposes
• Repayment: Repayment + interest for loan amount

Owner-occupiers: High equity

With this type of real estate purchase, the interest on the financing cannot be deducted from taxes. To keep the interest as low as possible in the end, it is worthwhile to bring in as much equity as possible. So the bank has a lower risk with your financing and the lower the interest is calculated.

• More equity, the better the conditions
• At least 20% equity for owner-occupiers

Cost per month for own use

In general, for financing a property, the cost of the loan should not exceed 40% of disposable income. In addition, one should keep in mind that the costs and interest rates can change. Just as quickly as the interest rate can change the cost of managing the property, such as water, electricity and gas.

• Self-interest < 40% of income (net, after tax)
• Interest and management costs may change

Capital investment: Lower equity

If you buy a property as an investment, you can fully deduct the interest on the financing from your taxes. If the rental yield is sufficient, even the tenant pays off almost completely on his own. However, surpluses generated from the return must be taxed, which is a major disadvantage.

• Interest is deductible
• Tenant pays interest through sufficient return on investment
• Less than 10 – 15% equity for capital investment

Rolling equity

Simply explained, rolling equity means that you get your investment of equity paid out as soon as the repayment at the bank is paid off. So in short, how do you get your invested equity out of a real estate investment as quickly as possible? To achieve this, there are two ways.

Two options:

• Restricted equity
• Full financing

Restricted equity

With this equity investment option, the equity is tied up until the property is sold, which means that you cannot access the equity during this time.

Sample calculation:

• Investment costs (purchase price plus ancillary costs): 250,000
• Equity after bank (15%): 37,500
  _____________________
• Loan amount: 212,500
• 32,500 euros committed as equity

Full financing

In this case, it is agreed with the bank that the purchase price including ancillary costs will be financed in full. The equity capital is invested in an extra account or securities account as collateral, which is released as soon as the repayment of the loan reaches the level of the equity capital.

Sample calculation:

• Investment costs (purchase price plus ancillary costs): 250,000
  _____________________
• Loan amount: 250.000

Additionally:

• Assigned collateral (account or deposit): 37,500

The next step: commercial examination

You have determined your maximum purchase price and are now faced with the commercial check, so that the previously determined and determined budget is adhered to. This audit is particularly important for the purchase of the first property such as apartment or house, that thus unnecessary costs and mistakes in the purchase of real estate are avoided. This audit includes not only the cost, but also the inspection and defects by year of construction and maintenance of a building. Read everything about the purchase audit here!

Self-disclosure for the bank

Before determining the required equity capital, you should provide the bank with a self-disclosure about your financial situation. You can find out what this means here!

You want to buy your first apartment or house and the bank wants a self-disclosure from you? Learn here what a self-disclosure is, what it says and download a free PDF template that you can use to convince your bank!

• Self-disclosure

Social binding: What is it anyway?

For housing construction, social binding means that low-cost housing is subsidized by public funds. This means that there are low-interest loans or subsidies for investors in exchange for committing to affordable rents. The catch? Only people with a housing entitlement certificate are allowed to rent these apartments.

• Affordable housing through public funding
• Very good conditions for loans or grants
• Rent for persons with a certificate of eligibility for housing

Rebinding

Buyers are tied to social housing until the public loans have been repaid. However, due to the post-commitment period, one has to wait 10 more years after repayment until the social commitment ends.

• Commitment to social housing until loan is repaid

Limited rent

The cost rent slows down the maximum rental price of the apartments. The housing construction is therefore price-linked, which guarantees that only the cost rent can be demanded from the tenants. The rent may be increased in this period only every 3 years, according to the consumer price index.

• Maximum rental price limited by “cost rent

Social bond summarized

Here again everything you need to know about social binding!

• Affordable housing through public funding
• Very good conditions for loans or grants
• Obligation to rent to low-income persons
• Maximum rental price limited by “cost rent
• Post-commitment period ends only 10 years after full repayment of public loans

The next step: equity

Regardless of whether it is for personal use or as a capital investment, the first thing to think about for any type of real estate is the financing. Here, equity capital is an important topic, from the use of equity capital to the difference due to tax deductibility of the interest on the loan. The big question here is, how much equity do you need if you include all costs from the purchase price to the ancillary purchase costs? Here you will learn everything about financing and equity.

Saving or investing? – What do I do with my money?

You have two options for building up wealth. Either invest money or invest money. If you rely on real estate as a capital investment, your financing will “reduce” itself over the years, and this way also offers protection against inflation.

Here we have summarized the decisive advantages of real estate as an investment:

• Real estate is stable in value with inflation
• Inflation “reduces” your loan

Source: Asset building/ Real estate experience.com

Money investment and value investment in comparison

Let’s look here at the investment of money in the bank and the investment of value as real estate in comparison, with its impact on the loan.

1. Investment: Savings book, Riester pension & Co.
2. Investment: Real estate as a form of investment
3. Loans: steady reduction due to inflation

Investment: Savings book, Riester pension & Co.

The typical forms of investment are still present. Not much has changed in society’s savings behavior in recent years. Many blindly invest their money in the bank in the form of building society savings contracts, Riester pensions or endowment life insurance policies. Often, people save and, due to interest rates and inflation, receive almost less money than they paid in.

• Interest and price increase are credited to you
• Loss of value due to inflation – amount of money remains the same or even becomes less

So, simply put, 10,000 euros will always remain 10,000, as described above.

Real estate vs. savings book: Who wins?

Even in times of crisis, real estate is considered a safe investment. It is stable in value in the event of inflation and even your loan can be positively affected by a depreciation of money, so you can sell your property later for twice its value.

• 10,000 Euro savings account after 30 years: 10,000
• 10,000 Euro Property after 30 years: 20,000

Reduce loans: Inflation as your best friend

Due to the devaluation of money, the value of your property is constantly increasing. So what happens to your loan?

A quick look at a loan taken out:

• 10.000 Euro credit today, are also later still 10.000 Euro

If you have already rented out your property, all the better! Due to inflation you get steadily more rent, and continue to pay off your loan through your passive income.

• 2020 = 350 Euro rent / repayment 300 Euro
• 2035 = 460 Euro rent / repayment 300 Euro

Don’t think so? Look it up yourself: Inflation Table

Source: Asset building/ Real estate experience.com

Conclusion: Real estate as a money pit

In the long run, real estate is a real goldmine. In addition to the return earned through rent payment and profit on sale through appreciation, the amount of income increases thanks to inflation. So your repayment of the loan becomes easier and easier.

Here again our most important points summarized:

• Real estate is stable in value with inflation
• Property can be sold later for double the value
• Investment: loss of value due to inflation – amount of money remains the same or even becomes less

The next step: real estate for retirement provision

In our last article on wealth accumulation, you already learned what inflation means. Here we will show you the effects of inflation on your future pension. Here again the question arises whether real estate is not the better way to provide for your old age than an investment in the bank or the statutory pension plan. In this article, we compare your three alternatives to show you the best way to stop worrying about your assets in old age.

Real Estate Financing Guidelines

Financing real estate made easy! We have compiled tips, tricks and the most important information on the subject of real estate financing for you, so that you too can realize your dream of owning your own home! Do’s and Don’ts, tips and experiences from experts will guide you and answer all your questions about “How to finance a property”. Become a professional and make no more mistakes in the future!

Real estate financing and purchase (external & free of charge)

Learn from the experts. You can find many, many more guide articles for free at Lukinski. Learn everything you need to know about buying real estate for free. Start in general with buying real estate, go over your specific type of real estate, from apartment, to house, apartment building to buying land. Also important: everything about the purchase contract (who pays the costs?), incidental purchase costs and saving taxes with real estate, through legal forms such as a real estate GmbH or family foundation. Here you can go directly to the topic: Real estate financing in comparison.

Tip! Overview Real Estate XXL

The world of real estate is complex and multifaceted. If you want to keep an overview and avoid making mistakes, you should prepare well and clarify as many open questions as possible in good time. No matter whether you want to build, buy and rent out a property or live in it yourself, or even use a property as an investment to generate passive income: The preparation is the A&O. Here you will find articles, as well as book and video tips with successful and helpful books and videos on the subject of real estate – including tips and tricks from professionals and experts.

• Book & Video Tips Overview: Real Estate

Real estate financing: the right strategy for capital investors

Rating: 4.5 from 5.0 (53 ratings)

The secure way to tailor-made financing: For owner-occupiers of a property, it is all about the favourable financing of the property. For capital investors, it’s about the best possible financing conditions for the rented property. With this pocket book you will find out which financing plan is suitable for you. The guidebook answers all the important questions about money for a house or apartment, whether for the initial financing, a modernization or follow-up financing.

• Income and equity ratio: how much house can you afford?
• Interest rate strategies: How long are you tying yourself down for, and which lender has the lowest mortgage rates?
• Repayment Strategies: As an owner-occupier or landlord, what repayment percentage is best for you to choose?
• Financial aid: How do you use money from the KfW and Wohn-Riester when financing your own home?
• Buy at Amazon

Real estate financing without equity

Rating: 4.3 from 5.0 (40 ratings)

In this guide, you will learn how you can fulfill your dream of home ownership, even if you do not have any equity today. Do not hesitate and deal with the topic of home ownership today. Even if you think real estate is expensive, it won’t get any cheaper in the medium term. The longer you pay rent, the more expensive it will be for you in the end.

Why should you look into buying an owner-occupied property right now?

• Interest rates are at an extremely low level, making financing very favorable
• Real estate, like all tangible assets, is protected against inflation.
• Very often the monthly charge as a tenant is higher than paying off your loan
• Real estate is the ideal retirement provision
• You actively build up your assets through monthly repayments

Also learn in this book

• How to be perfectly prepared for bank interviews
• How to improve your Schufa score
• What grants you may be able to apply for
• Why a granny flat will make you debt free sooner
• How you can get equity from relatives without them having to give you a single euro
• Buy at Amazon

Practical guide to real estate acquisition and financing

Rating: 4.4 from 5.0 (45 ratings)

The practical guide is written for all those who want to buy or build their own (credit-financed) property in Germany. The author presents the topic in a clear and easy-to-understand manner, introducing both legal and economic issues in a concise and detailed manner. The contents are illustrated by examples with concrete calculations and references to the current legal situation. The calculation tool helps to determine the actual costs of loan financing.

• Buy at Amazon

Real estate practice manual for owner-occupiers

Rating: 4.8 from 5.0 (27 ratings)

Buying, building and financing your own home are long-term and far-reaching decisions. In this guide, you’ll find comprehensive information and checklists for buying a used property and building a new one on your own. As a bonus, an Excel calculator tool for real estate loans is available. With this guide, you will be able to organize the purchase and financing well and avoid expensive mistakes.

From the contents:

• Purchase of a second-hand property
• Buying a new property from a developer
• Purchase of a plot of land & construction on own account
• Special features when buying a condominium
• Purchase in the compulsory auction
• Strategies for intelligent financing with loans & equity
• State subsidies for home ownership (e.g. Wohn-Riester)
• Calculation tool for loan financing
• Buy at Amazon

Real estate financing for owner-occupiers

Rating: 4.6 from 5.0 (54 ratings)

Real estate is still considered a solid investment. Interest rates are low, prices vary greatly from region to region. And the small print in banks’ loan agreements is becoming increasingly complex. To see through the pitfalls of buying a house, you need expertise. This book will help you develop it: in estimating the purchase price, in structuring the sales contract, and in financing. In the end, you’ll negotiate smartly and on equal footing with sellers, realtors, and banks to get the best outcome for your family.

“This is by far the best book on financing your own four walls that I have read. Anyone who reads this book and heeds its advice is sure to save a lot of money and, most importantly, avoid unnecessary risks. Anyone who thinks they don’t need this book has only themselves to blame.”
Dr. Rainer Zitelmann, real estate investor, founder of the consulting firm Dr. ZitelmannPB. GmbH

• Buy at Amazon

Real estate financing: Understanding banks

Rating: 4.3 from 5.0 (26 ratings)

What is the best way to prepare for a real estate purchase? What do you need to consider when financing? There are many books and financial magazines on this topic, but this guide is different. With this book you get a practical guide to the topic of real estate financing. In an entertaining and reader-friendly way, the author succeeds in explaining the pitfalls of real estate financing in a simple and understandable way. With the help of many practical examples, Dirk Nopp clarifies even the most difficult topics and explains technical terms in such a way that even laymen understand them.

• Buy at Amazon

Construction financing guide

Rating: 4.6 from 5.0 (4 Reviews)

This book helps with the important question of financing:

• How do I draw up a budget?
• How do I calculate the monthly charge?
• What additional costs should I expect?
• How much real estate can I afford?
• After how many years will I be debt free?
• What financing options and loans are available?
• What do all the financial terms mean?
• Buy at Amazon

Construction financing: The best way to a house or condominium

Rating: 4.2 from 5.0 (7 ratings)

The foundation stone for your own four walls!

Important building block for old-age provision, independence from landlords – owning a property offers a number of advantages. That’s why many people dream of owning their own house or condominium. To ensure that the dream does not turn into a nightmare, the financing must be on a solid footing – because the decision to buy usually means an economic burden that lasts for decades.

This guidebook supports you on your (financing) way to your own property Well structured and understandable, it answers, among other things, the questions:

• How do I calculate the cost of purchase or construction?
• How do I determine my financial resilience?
• Which type of construction financing is most favorable for me?
• How can I benefit from the Wohn-Riester subsidy?
• With many tips, examples, checklists and the “ABC of construction financing”.
• Buy at Amazon

Related links about the topic Real estate

The real estate financing is now covered quite extensively for you, but you are still looking for more literature on the topics of renting property, real estate agents or passive income? Here you will find more book tips for you.

Let property

Renting out property is a great way to provide for your retirement and stop worrying financially. There is a lot of money to be made in real estate – how it all works is explained in these books so you don’t make any mistakes!

• Video Tips: Rent out property
• Book recommendations: Renting a property

Real estate agent

Earning money with real estate is a lifelong dream for many. Marketing and selling luxurious homes in the most beautiful cities in the world. That’s the image that comes to mind when we think of real estate agents. We want to show you the way to get there and give you a jump start. We offer you a list of the best book recommendations with tips and tricks from the experts: everything from training books, job aids with forms, and guides with how-to’s on getting started in real estate. Our guides to success in the real estate industry

• Video Tips: Real Estate Agent
• Book Recommendations: Real Estate Agent

Passive income through real estate

Passive income – Some people are considering it, or have already done it: buy a property and rent it out. By doing so, they hope to generate passive income. You can find information on the subject in these book tips.

• Video Tips: Passive income
• Book recommendations: Passive Income

Overview real estate XXL: Investment, broker, renting & Co.

Here you get back to the overview of book and video recommendations on the subject of real estate in Germany. Investment cases, capital investment, passive income, house or apartment buy and rent and much more is explained to you here by experts and understandable. In this XXL guide you will find information and articles on the most diverse questions on the subject of real estate.

• Back to Book & Video Tips Overview: Real Estate

Real Estate Financing Guidelines

Financing real estate made easy! We have compiled tips, tricks and the most important information on the subject of real estate financing for you, so that you too can realize your dream of owning your own home! Do’s and Don’ts and tips and experiences from experts will guide you and answer all your questions about “How do I finance (m)a property”.

Real estate financing and purchase (external & free of charge)

Learn from the experts. You can find many, many more guide articles for free at Lukinski. Learn everything you need to know about buying real estate for free. Start in general with buying real estate, go over your specific type of real estate, from apartment, to house, apartment building to buying land. Also important: everything about the purchase contract (who pays the costs?), incidental purchase costs and saving taxes with real estate. through legal forms such as a real estate GmbH or family foundation. Here you come directly to the topic: Real estate financing in comparison.

Tip! Overview Real Estate XXL

The world of real estate is complex and multifaceted. If you want to keep an overview and avoid making mistakes, you should prepare well and clarify as many open questions as possible in good time. No matter whether you want to build, buy and rent out a property or live in it yourself, or even use a property as an investment to generate passive income: The preparation is the A&O. Here you will find articles, as well as book and video tips with successful and helpful books and videos on the subject of real estate – including tips and tricks from professionals and experts.

• Book & Video Tips Overview: Real Estate

Common mistakes: tips for doing better

Many people who want to finance their property make the same mistakes over and over again. What these are and how you can avoid them is explained to you in the following videos by experts. In these videos, you will learn how to strategically approach your real estate financing in the best possible way and how to optimally save money! In addition, you will learn what you should definitely consider when financing your property.

5 mistakes in construction financing

This video is about the 5 biggest mistakes in home financing. You should definitely watch the video if you are about to make your first purchase. With small tips you can often save a lot of money. This in turn determines in the end whether a property is really worth it.

Construction financing: What you should pay attention to

Here you will learn what you should pay attention to when financing a property. Equity, repayment and interest: Here you will find an explanation of how these parameters are put together for optimal real estate financing.

Building savings contract for real estate financing: Mistakes

Home loan financing – Poorly planned home loans can ruin families. What the consequences of a badly planned financing or a building society contract are, is explained in this video. You will also learn how you can avoid this yourself.

Real estate financing without equity

You want to finance a property because it is your dream or the circumstances are currently perfect, but you don’t have enough equity to finance it? No problem! That’s how some investors feel, but that shouldn’t stop you. In these videos, you’ll learn how – even without providing any equity – you can finance your property without going into debt.

Financing real estate with little or no equity

How do you finance a property with little equity? Is that possible at all? What is legal, what is not? What does the bank say if I have little equity? What are the misconceptions about particularly cheap properties? This and more on the subject of equity you will learn in this video.

Financing real estate without equity

In this video, we talk about construction financing issues, such as real estate financing without equity. Especially the real estate financing is one of the most important building blocks in the long-term real estate economic success, here insider knowledge is very valuable.

Equity finance

Financing a property with equity is probably the most common way of financing a property. How this works, how much money you should actually take in hand and what you should absolutely consider, you will learn here. In addition, different options are presented to you in order to find and develop the financing strategy that is perfectly suited to you.

Equity share in real estate financing

How much money do you need to buy a property? This video explains how much equity is needed for a property, what forms of financing there are and why it makes sense to use as little equity as possible for the real estate investment.

Equity: How much do you need to have and how much should you put in?

Every one of us wonders: How much equity should I use for my property? In this video you will learn the basics of real estate financing. To be able to calculate equity, it is important to know what all equity is. This and other explanations you will find in this video.

Private real estate financing

Financing a property as a private person is possible, but not a simple matter. In this video you will learn how private financing of real estate works and what you should pay attention to. The whole thing is explained with everyday examples to make the information as accessible as possible.

How does private real estate financing work?

This video explains how traditional private real estate financing works. Based on simple everyday examples, the most important basic elements of financing are clearly conveyed.

Optimal redemption

Taking out a loan or credit to finance a property is a common method. In these videos you will learn more about real estate financing, interest rates, loan rates and the optimal repayment, With these tips you will also find the perfect loan to buy your next property without a guilty conscience.

Financing real estate: How much you should repay?

The real estate loan or real estate financing has a huge impact on whether a property works as an investment or a home works as an investment. Financing a property is therefore something you should definitely understand before buying. One important question to ask is how much to amortize or what is the optimal amount of amortization. This video explains whether you should pay off a lot / pay off quickly or pay off a little / pay off slowly and what role your personal situation plays in this. You will also learn how you can make clever use of unscheduled repayments and what repayments we have agreed on for our own apartments.

Construction financing: Purchase price, rate, interest & Co.: How much house can I afford?

In this video, you’ll learn what your own property may cost, how to determine the right loan rate, and how to get the best interest rate on your financing.

Bank interview – What documents do I need?

To finance your property, you may need a loan or credit. You can usually only get this through a personal interview at a bank branch. In this video you will learn which documents you need for your bank interview and how you can appear most serious and well prepared to emerge from the interview as successful as possible.

What documents you need for a bank interview

This video explains which documents you should bring with you for your bank interview for real estate financing in order to be optimally prepared. You will also learn what is really important for the perfect appearance.

Related links about the topic Real estate

Want to learn even more about buying, financing, renting, or real estate agents? Then check out our other video tips and tricks on these topics to become a real estate pro!

Build property

To build or to buy a house? This question is on the minds of many prospective buyers. In this article, we show you the advantages and disadvantages of both options and offer interesting tips on financing. Both options have their advantages. A new building has the great advantage that you can determine the layout of the rooms according to your wishes. In an existing property, you no longer have to deal with the complicated construction phases and you can live in your own home much faster. Here you will find videos that will help you finance your dream home and explain to you what you should pay attention to.

• Video Tips: Build property
• Book Recommendations: Building real estate

Buy and rent real estate

Buying and renting real estate – It’s hard to get started, but with the right recommendations and tips, it’s easy. So that you too can make a smooth start in the world of real estate, we provide you with tips and tricks. Everything from how to prepare to buy your first home, to finding the right rent, to solving problems like rent default and vacancy. This guide provides you with the best videos from the field of buying and renting real estate.

• Video Tips: Buy and rent real estate
• Book Recommendations: Buying and renting real estate

Overview Real Estate XXL: Investment & Co.

Here you get back to the overview of book and video recommendations on the subject of real estate in Germany. Investment cases, capital investment, passive income, house or apartment buy and rent and much more is explained to you here by experts and understandable. In this XXL guide you will find information and articles on the most diverse questions on the subject of real estate.

• Back to Book & Video Tips Overview: Real Estate