How to correctly determine the loan amount when there is a lot of personal contribution?

Hello dear forum,

we are currently in the early planning stages of a new build in the countryside. The plot of land is available, the architect is still missing, that is the next step

The core questions briefly in advance:

[*]What is the sensible way to proceed in order to calculate a reliable loan amount, provided a lot of personal contribution is planned?
[*]What concerns from the bank should one expect, or how is the best way to prepare for them?

and the somewhat more detailed explanation as follows:

Regarding 1.: In turnkey construction, I know it is usually the case that either a final price is offered via the general contractor or alternatively the architect evaluates the individual points of the service specification (based on experience or concrete offers). In both cases, I have fairly reliable calculations with which I can go to the bank.
In our case, however, it is now so that we have many craftsmen in our circle of friends and acquaintances who also practice their trade professionally and will take over many of the trades. Nevertheless, we would have to award: carpentry work, windows & doors, heating, stairs, architect and structural engineering up to the building permit phase. The other trades (mainly shell construction, roofing, electrical, plaster, screed, sanitary, drywall, insulation, tiles, floor coverings, painting work, garage, landscaping) would be personal contribution.
We are now asking ourselves how we can obtain a reliable total price for the bank in this variant. Do architects also usually distinguish between material and labor costs? then the first estimate would be roughly feasible. On the other hand, I would have to reckon with additional costs due to tool rental etc., which would be included if awarded. Can an architect foresee all this so detailed in advance? How have you done it?

Regarding 2.: One repeatedly reads here in the forum about (quite legitimate) problems with the bank when a lot of personal contribution is planned. I can well understand the reasons for this (frequent botched work by laypeople, construction delays, costly refinancing required, company Friday & Schwarz, financial risk of the bank). In this context, the question arises as to what to pay attention to in discussions with the bank? Do lists with the names of helpers and profession help to convince the bank? What should be noted about the commitment interest? (Personal contribution usually takes longer than turnkey construction with the general contractor, as is well known). Does equity also play an important role here (we would not go into the race completely empty-handed with about €100k = plot of land in the countryside + incidental costs). Net income combined: approx. €6,000)

We would be happy if someone who has already taken this path would like to share their experiences with us
Best regards

I can't contribute much here regarding the evaluation and risk assessment of the bank concerning the EL, but have you ever been to a bank or your bank and discussed it?

I only know that banks accept a flat percentage as EL.

A rough rule of thumb for the loan amount is net income minus other loans and obligations (alimony, etc.) x 108. If you don’t have too many burdens/loans, the financing should be no problem. We have the same income and with us, loans up to €650k were no problem.

However, you should also calculate the installment and then make an income/expense statement. See what remains in the end.

Your friends will hardly do that for free, so it is normal to include it in the calculation and not count it as equity contribution. Actual personal contribution can simply be shown in an Excel spreadsheet – if realistic, it is usually accepted. Recently, someone wanted to declare €120k equity contribution to the bank here and was surprised that it was not accepted... but really, one shouldn’t be surprised about that.

I would definitely talk to the house bank and the local Volksbank and Sparkasse. I would definitely have prepared the plan for the longer construction period (rental costs, etc). Additionally, I would have my friends provide me with a cost breakdown. That means required materials, helper hours, required tools (whether purchase or rental). So in any case, go to the bank with a comprehensive plan to be able to answer any question. If the question comes up: "Where do you get the tools from?", you should have an appropriate answer ready. For example: - It is listed in the breakdown from my acquaintance. He is the owner of the company and rents me the tools daily at the price specified there. - The tools are listed in the breakdown from my acquaintance. I have researched, and the tool costs are included as an attachment. The tools will be paid for from equity accordingly.

don't forget the rent of the construction crane