Existing property - significant renovation effort

Hello dear forum,

we intend to purchase an existing semi-detached house (157 sqm living space, 260 sqm plot).
Purchase price: 300,000 EUR
+ 6.5% property transfer tax = 19,500 EUR
+ Notary/land registry = 6,000 EUR
+ Broker commission = 10,710 EUR

The house was built in 2005. Unfortunately, the condition is still to be described as catastrophic regarding the interior "finishing"/condition, so the planned renovation measures amount to a sum of 95,000 EUR.

Available equity capital is 106,000 EUR, of which 6,000 EUR are intended to be used elsewhere in the coming months.
I thought of keeping 10,000 EUR as a reserve.
Withhold 10,000 EUR for furniture.
That would leave 80,000 EUR to be contributed.

A further 30,000 EUR / 40,000 EUR could be contributed by a relative and repaid monthly.
Total available would be: 146,000 EUR equity
-> my question here is whether it makes sense and is "okay" to include this in the financing or rather to use it for the renovations.

The high renovation costs are estimates by a related architect and correspond (with overlapping costs) to renovation measures we had carried out in the past for an apartment.
However, it cannot be ruled out that the actual effort might possibly be less in the end (e.g., carport instead of garage, etc.).

Some of the renovation/conversion measures we would carry out together with friends (many craftsmen). Demolition work mostly to be done by ourselves.
Meaning: no invoice for these items.

We now have offers from the Ing-Diba from financial advisors.
Here it is proposed to fully include the 30,000 EUR or 40,000 EUR from the relatives.
Or due to the distinction between "value-increasing" / "value-preserving" measures, equity capital would be consumed in each case since value preservation could not be considered (although in my opinion, given the condition, everything - e.g. new flooring - should actually mean value increase).

About us:
He: permanent employment unlimited since 2008 with fixed salary 3,500 EUR monthly + annual bonuses of 15,000 EUR.
She: permanent employment (currently on maternity leave), unlimited since 2005. Currently about 700 EUR monthly.
2 children: 380 EUR monthly.
Current rent: 550 EUR monthly.
Desired rate: 1,000 EUR (+ possibly 150 EUR to relatives if their money is used)

Ing-Diba:
according to financial advisor "costs for conversion/modernization": 43,800 EUR
rest to be paid out of equity

Fixed interest period: 15 years
Interest rate: 1.95%
Repayment: 2.50%
Monthly rate: 1,082 EUR (+ 150 EUR family)
including annual special repayment option and possibility to adjust repayment rate.

In the long text (sorry!) there are quite a few question marks
- What do you generally think about the rate and withholding 10,000 EUR reserve + 10,000 EUR furniture?
- What do you think about the possible inclusion of the family EUR?
- Especially because of the high renovation costs, I don’t know how we should best use the equity. Especially since some work we and friends do ourselves would not have invoices for the banks?
I have now read that Ing-Diba only releases the money after submitting the invoices..
Do you have any other suggestions or improvements that I might have overlooked?

THANK YOU very much and best regards!

A house from 2005 and catastrophic conditions? What is it about? Water damage? Vandalism? That should then be reflected in the purchase price.

Regards, Yvonne

It's basically all worn out inside - all floors, walls, stairs, doors, bathrooms,... simply broken. According to the architect, however, everything outside is fine and the structure as well. Unfortunately, the price is therefore already pushed down to around 300´. Is the market currently like this here..

Bringing in equity is always a bit of an issue. The bank will certainly factor up to 50% of the value increase into the condition determination. In other words, ancillary costs + 50% renovation should be provided in equity. What makes sense to bring in as equity afterwards is to a) obtain better conditions b) maintain flexibility during renovation.

The bank will also certainly want to see invoices; if a lot is done by own labor, only material costs will be considered. I would inquire about that.

It is basically almost everything inside broken-"used" - all floors, walls, stairs, doors, bathrooms,.... simply broken. According to the architect, however, everything outside and the structure are fine.

What is supposed to still be right about the structure, I cannot comprehend. With a "semi-detached house," it is likely that the neighbor built with the same contractor (?) - does the condition of his house make it believable that someone simply did not treat the house carefully?

I would cautiously make a preliminary calculation of how well the financing still "holds" with a 30% exceedance of the assumed costs.

Such a condition can have various causes: defects, decay, wear, or destruction. Increased wear is an unavoidable consequence of cheap materials (e.g., tiles of the wrong abrasion class). Depending on the cause, the extent of the "surprises" during renovation can be even more severe than the aforementioned reserve.

I can't follow what substance is supposed to still be correct there. With a "semi-detached house" it's obvious that the neighbor built with the same contractor (?) – does the condition of their house make it believable that someone just wasn’t careful with the house?

I would cautiously do a preliminary calculation on how the financing would still "hold up" with a 30% overrun of the assumed costs.

Such a condition can have various causes: defects, decay, wear or destruction. Increased wear is an unavoidable consequence of cheap materials (e.g. tiles of the wrong abrasion class). Depending on the cause, the extent of "surprises" during renovation can be even worse than the mentioned reserve.

The house was originally handed over by the developer as a "shell house."
Exact words from the architect: Everything was fine until then. After that, only rubbish was done / attempted to be installed (guest bathroom, etc.).
Inside – floors, for example – simply "worn out" from use, doors/door frames, etc., were treated unimaginably negligently, so that all of this now needs to be replaced.
From the outside, both houses look good (except for a fallen awning).