House construction project with terrible credit rating and almost zero equity capital :-)

Hello everyone,
I unfortunately have to ask, even though very direct, unpleasant answers will surely come that I don’t want to hear...

- my Schufa score is a blinking red mess, and it’s not much better with my wife: "youthful indiscretions" that lasted until 2017, but will be fully paid off within the next 6 weeks

- due to the repayment of these "youthful indiscretions," there is absolutely nothing left to save. No home savings contract, no savings account, no holiday fund or anything. So far: "living hand to mouth"

- meanwhile, I earn better and have a permanent & secure job: ~€3300 net / month

- I am the sole breadwinner and this will remain so for the next few years - possibly my wife can do a €450 mini-job

- next month we will have our 5th (!) child ops:

- thanks to care allowance for 3 of the children (which is of course reviewed at least every two years and - luckily, one has to say! - the care levels of the affected children and thus the care allowance are actually decreasing) we currently have a household net income of almost €5500.

- currently we live (soon with seven people) in a MUCH too small apartment (~94m² 4.5 rooms). Even with flawless landlord references and our household net income, there are hardly any possibilities to find larger apartments. There simply aren’t many. At the few rental houses available here, we have so far been rejected due to the Schufa entries, even when we explained the situation to the landlords. Many landlords simply do not want seven people in their building…

We really have to look now to at least move out here in the medium term within the next 2-4 years. Our children will thank us. We thought about… building. For ~€400,000 including EVERYTHING. We are 7 people… (realistic?)
Now the questions about that:
- What is realistic? At this point in time, there is probably no loan at all due to Schufa and zero equity, is that right?

- What role do older Schufa entries play? There are now gradually deletions of old negative entries and positive entries due to repayments… is a larger loan even possible in the next few years?

- When there are no more old debts to repay very soon, we can put aside €2200-2600 per month. How would you park / invest / save this money? What do you consider the minimum amount of equity we should accumulate?

- How exactly is own labor considered / calculated financially in construction? I have ‘modern’ working hours (4 to 4.5 working days), many vacation days, free weekends, a lot of motivation and in my modesty: some experience and some craftsmanship skills. I worked through the common training and learning books for the professions: steel and concrete worker, bricklayer, carpenter, plant mechanic for sanitary, heating and air conditioning, electrician (especially VDE 0100), joiner and roofer several years ago. Unfortunately, I am the kind of person who reads a book and then actually remembers most of it and can implement it quite well. For concrete, bricklayer, carpenter, sanitary and roofer I completed 2-3 week internships in recent years. (Yes! On my vacation! When normal people relax and enjoy time with family…) Mostly with craftsmen I know by two degrees of separation and where I could really learn something. These masters / craftsmen are now unreachable for me and our house building project, as they live on the other side of Germany.
More than two years ago I built a nearly luxurious, partly masonry allotment garden hut for my father-in-law with little help. With a pitched roof and real roof tiles. Foundation with concrete & screed, thermal insulation behind interior wood paneling as well as in the roof and all the trimmings.
No, I do _NOT_ want to say that I can do everything and certainly not as the professionals do it. And an old allotment garden hut is no comparison to a proper solid house. But I fear nothing, especially if it could help make the dream of a house more realistic for my family. That’s what I want to express. I would like to start building today, rent an excavator, dig the foundation pit, form the foundation... (yes, of course, a plot must be bought beforehand, ... soil survey made, ... measured...)

So: what do you think? What is realistic? No chance? Small chance?

I look forward to feedback.

P.S.: Since I have already had bad experiences after writing / talking at length about (soon) 5 children, some with care levels as well as Schufa: comments about my / our lifestyle, responsibility towards children, "kids just for child benefit," "your poverty disgusts me," "Schufa, it only lists antisocial people!" etc. are inappropriate. Nobody knows the why and how, only my wife and I...

P.S.: We are both 33. And something else I just remembered: I already did a two-week internship as a painter as well as one week each as a carpenter and screed layer. Yes, I enjoyed it and bothered the colleagues with many, many questions...

P.P.S.: I have to admit, the 400K was just a rough guess. I haven’t given it much thought yet. It’s simply about the general feasibility: can we build? We would rather not take an existing house. I’ve already played around with Autodesk Revit, but so far only multi-million euro dream villas have come out of it. I haven’t taken it seriously. It just has to be for 7 people. I also think a basement is important...

This is exactly the typical deliberate laying of the foundation for the next debt trap for me. That's how my daughter reacts now at 3 years old, I want it no matter what is and was.

Let it be, get your life under control first, because if the debts are only paid off now, it will take 3 years until the Schufa is cleared. In that time you can save.

No, you will probably not get a loan currently. But you have the 2-4 years time. During that time, you can save diligently. Namely, according to your calculations, about €72,000. With this equity and without new debts, negotiating with the bank is then much easier. And then I would look for existing properties. Simply for practical reasons. In existing properties, you can use your craftsmanship skills sensibly during the renovation. In addition, older houses often had a basement. And practically for you: also often small rooms. But more of them. Then maybe everyone can have their own little kingdom.

Hello, is this a "fake thread"? Apart from the fact that you cannot and will not afford this, I find it doubtful that you have embezzled the [Pflegegeld] so far. I also find it negligent that you soon have 5 children and live with them (including 2 foster children) in such a small space. Won't you be checked by the [Jugendamt] or similar authorities?

Hello, is this a "fake thread"? Apart from the fact that you cannot and will not be able to afford it, I find it doubtful that you have misappropriated the care allowance so far.

I also find it negligent that you soon have 5 children and live with them (including 2 foster children) in such a confined space. Aren't you being checked by the youth welfare office or similar authorities?

I have been waiting for this
It was clear that sooner or later the first moralizer would show up.

To the point: I completely agree with Joedreck. Take 2-4 years and then look more at the facts.