How to proceed #Loan #Modernization

Good evening,

I just registered here (hello for now) and I really hope that one or two of my questions can be answered :)
I would be very happy.

Today I was offered a house here in Osnabrück (privately).
The house is a 4-family house including a plot of land of about 1000m² (of which about 400m² is not building land). The whole thing is supposed to cost 50,000 euros.

The house was valued last year by the OLB (170,000).

The condition of the house is okay so far (built in 1960 after all).
There is a need for action in the heating system and in general renovation work, which I currently estimate quite optimistically at 30,000. (Please don’t dwell on that)

Now I would like to know how to proceed.

A real estate loan from the bank is hardly possible due to the small amount? (At least that is what I have read several times). Instead, it probably comes down to a normal installment loan?

So, I would take out the purchase price (notary etc. is paid like that) from the bank and can take out a modernization loan through the KFW?

Or should one rather take out the total amount (house price + modernization) from the bank and thus possibly have the opportunity to use a normal home financing with its interest rates after all?

I hope the question does not reveal me as completely ignorant ;)

I am grateful for any answer and suggestion.

Regards J

Hello JensDos and welcome to the forum. To me, the whole thing sounds dubious. Nobody has anything to give away. Why would someone sell a house so far below the appraised price? Is it a dying community? Contaminated soil/building? Tenant issues? .... The land alone should already be worth more. What do you want the property for? Personal use or pure rental? Since the house and land are so cheap, I assume that the rental income is also low. How is it currently heated and how large is the living area? General renovation work can mean a lot. With 30k you can do the heating and maybe paint depending on the size of the house, but not much more. Check the search. There are currently some topics about renovation. Depending on the scope of the work, you are not much cheaper than with new construction. With a house from the 60s there is always the risk that health hazardous materials have been used. It is still not clear to me why you want the house. Apparently you have no equity and want to finance everything. Rental income cannot be that high at this purchase price. Do you want to move into one apartment yourself and have the other three cover your costs through rental income? With the renovation work and a consumer loan, there is probably no profit ... It would be nice if you could provide us with more information.

Hello, I also find it strange to get a house that is valued at 170k for 50k. Purchase within the family? Otherwise, the amount is not too low for a classic mortgage. Talk to your house bank. What is your net income?

Ergo, würde ich den Kaufpreis (Notar etc. wird so bezahlt) bei der Bank aufnehmen und kann über die KFW ein Modernisierungskredit aufnehmen ?

You cannot take out a loan directly through the KfW; this is done through the bank where you take out the mortgage. They include the subsidies in the plan. Therefore, you should take out one loan for everything.

Oh dear, something is fishy... where on earth are you supposed to start talking you out of it?

Do you know the condition of ALL four apartments from the inside?
From gut feeling, the property has massive renovation backlog! Everything is in the condition from the 60s. At this price below value, there is urgent and financially massive need for action somewhere.

Honestly, to me that sounds like acute full renovation for €500,000 and up. Skip it if you have to finance the additional purchase costs of €50,000 yourself. How do you want to manage a quick renovation in case of, for example, pipe break? Your tenants not only pay you money, they also have the right to maintenance.

What does new heating mean? Just the system itself, or rather new heating plus all pipes plus all radiators in the rooms of all tenants renewed?

Are the rooms even still rentable without full renovation if the current tenants move out? Which brings me back to the first question: Do you know the condition of all four apartments?