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I still have to ask: Why doesn’t a bank consider invested capital as collateral? Not even partially?

Invested capital can disappear faster than you think (loss, gift, theft, expense). The bank has no influence on that – only on the equity used. I don’t want to look at every penny now, but there are people here with less salary/equity who had to put more into an average property in/around M than you plan to invest.

The problem will be that you will find few to no properties that are close to the city, have 1000m², and including renovations and additional purchase costs do not cost more than 700k€...

Depends on the city nearby. Certainly not near Munich. In the border triangle of Saxony/Bavaria/Czech Republic more likely (the OP is searching in BY), in the Uckermark that fits easily.

I still have to ask: Why doesn’t a bank consider invested capital as security? Not even partly?

A security must be fixed, secure, and calculable. Like a property with a land charge. So you actually have to pledge your cash assets so that the bank has access to them. If it is not cash but securities, very high discounts (due to possible price fluctuations) are sometimes applied. These can sometimes be 60% discounts or even 100% for risk papers (warrants would be such). Then you can no longer access them, not even for reallocations (unless you negotiate it).
It’s like with the property.
There is the market value (usually the purchase price), the lending value (sustainably, long-term realizable price), which is always lower, and then the real loan limit, which is at 60% of the lending value. And only these 60% are the bank’s security (and only these 60% can then be refinanced via a covered bond).
Purchase price 1 million.
Lending value €900k
Security value €540k
That’s how quickly values shrink together.

The most important aspect for me, however: Primarily, according to my calculation, return beats interest.
What does the banker say?

If that is your personal return assessment, then the banker agrees.

I will gladly share objects that reflect this when we have moved a step further here.

Thumbs up!

At 40, I would step on the gas with the child and not plan. That you manage financially is beyond question …

Hello,

I am curious where you invest your money to achieve an average return of 9%? I think that is a very good rate. Based on your questions, it is clear that you don’t have much experience with real estate. Is it all about stocks/ETFs/bonds or also other investments?

Since you have such a high income, I assume you are very busy professionally. For this reason, I wouldn’t recommend a renovation project. In my opinion, you can only make something profitable out of a renovation project with a lot of personal effort and experience.

Due to your capital and income, you will probably get the best conditions from the bank anyway. I am not fully up to date, but interest rates between 3-3.5% are realistic. Theoretically, €200,000 equity could be enough. I am not a financial expert, but inflation is the biggest risk and the last 3 years have not been particularly great. (3.5% interest + 4% inflation = 7.5% vs 9% return) On the other hand, if you can maintain a 9% return over the next 10 years, then your plan should be solid.

Basically, I am also not a fan of financial advisors because they always calculate everything a bit too optimistically and don’t manage to deliver that in reality. But you can’t avoid getting a loan. I also don’t know if it is blocked, but I went to Interhyp, Sparkasse, and Raiffeisen as well. The one with the best offer won. I have had several loan consultations for a few properties. I always had the feeling that the advisors over 50, who have been employed for many years, arranged the best conditions. The younger U30 ones usually offered worse conditions.

I am not completely up to date but interest rates between 3-3.5% are realistic.

No, (definitely) below 3.5% is currently not possible for 10 years. The normal refinancing rate of banks is currently around 2.8-2.85%. Without margin, without risk costs, without unit costs, without liquidity costs. 3.5% is already a great rate to expect.

Offtopic:

First of all, a big thank you to everyone and especially for the quick and substantively valuable answers.
A great forum that lives exactly from participants like these.
The learning curve is incredibly steep, just as I know it from hands-on exchange.
I want to emphasize this because in various investment forums I have had other experiences for years.
Thumbs up!

Ontopic:

If it is not cash but securities, very high discounts (due to possible price fluctuations) are sometimes applied. These can also be 60% discounts or even 100% for risk securities (warrants would be such).

A pity, but I understand – at least something is taken into account.

At 40, I would really push for having children and not plan too much.

We are aware of that, but unfortunately biology does not always cooperate as one wishes. It certainly does not get better with each year.

I would be interested to know where you invest your money to achieve an average return of 9%? All in stocks/ETFs/bonds or also otherwise?

The money lies exclusively in stocks spread across various accounts with a mix of buy & hold and (long) swing trading. I orient myself on economic trends and cycles, as well as common sense.
I do not invest in ETFs/bonds, no risk securities such as warrants or certificates.
From the perspective of asset classes, one could say I do not diversify, but diversification is reflected through sectors and countries. The new property then does the rest.
I invest a significant portion of my time in this, but it’s also fun for me.

From your questions it’s at least clear that you don’t have much to do with real estate.

That is correct, we are completely new to the topic and have been dealing with it for about one month. That’s why I am here.

Since you have such a high income, you must be very busy professionally.

Yes, but we can work a lot from home office. That saves a lot of time and enables freedom.

(3.5% interest + 4% inflation = 7.5% vs 9% return)

It must be considered, however, that inflation also devalues the loan. I therefore estimate the adjusted result as better.

We will then take a look at the online providers. I still had the old-fashioned thought that such a big topic is handled at the bank table. Times change here too.

Best regards!