Buying and renovating a house - What is the best strategy?

Hello,

we want to buy an existing house and renovate it. Our equity is not sufficient for the house purchase and therefore we need a loan. My advisor has calculated a financing with a loan that covers both purchase and modernization. Disadvantage: we want to take our time to consider how to design the renovation and would have to hurry regarding the construction documents for the bank and commitment fees. KFW loans are currently very interesting in renovation due to high subsidies. Can I apply for / plan the KFW loan before the house purchase? I have not yet understood how KFW loans work in this scenario.

From my point of view, there are 2 alternatives and I am interested in your opinion

1. Use equity and loan from family for house purchase.
Advantage:

[*]no commitment fees for the planning period after purchase
[*]KFW loan for renovation can be applied for after house purchase

Disadvantage / questions:

[*]loan from bank for modernization would be applied for practically without equity (all money used for house purchase)
[*]can I refinance the private loan from the family with a bank?

2. Variable loan for the house purchase and then refinance it after planning with loan + KFW loan

Which strategy makes sense in your opinion?

Thank you very much.
Best regards blaekridor

1 if it is going to be within the family. Provided you are solvent enough to finance it, then that is the relaxed solution.

Alternatively 3. That gives you the necessary time to plan the renovation. This should urgently be done without time pressure. What must be done, what should be done. Experience is required here.
I cannot say anything about [KfW Förderung]. Do not lose sight of the demands of [BAFA]!

Yes 1), if you manage to raise the money, that is not a problem. The house is then your equity, so that is not a disadvantage with the loan. It is also possible to include that the private loan will be rescheduled. As long as in the end the property value matches the financing requirement, it works.

What would not work:
House costs 300k€ + 50k€ incidental purchase costs, but is actually only worth 150k€ and you want to invest 200k€ in the renovation.
You have 100k€ yourself and borrow 250k€ from the family. In the end, you want to borrow 500k€ from the bank (with buffer for kitchen, furniture, etc.), but your renovated house is only valued at 350k€.