Multi-family house with 250k equity on own land? Feasible?

Good day dear house building forum,

Initially, our plans were based on our relatively large plot (46x16m, near the city center - Münster sqm price around 10€) to build a single-family house or a two-family house next to our house. After longer consideration, we have come to the conclusion that this project might not be the best idea, as almost only equity would have flowed in there.

The current idea is simply to tear down our house (80 years old, very aged) and move into the multi-family house, so that we can occupy about 100sqm or slightly less. It is important for us that it is built barrier-free, as our current house is anything but that. We also know that we need to speak with a financial advisor and are currently in constant exchange regarding taxes, loans, and general financing costs.

Am I right in thinking that it would be good to build a single-family house of about 350-400sqm, which includes several residential units, so that the KFW subsidy can be applied for multiple times per residential unit?

The budget is around 900 thousand euros, as this would still be an acceptable equity ratio, right?

We already have a new residence for the construction period. We also know that such a large construction is not without challenges and are currently only planning roughly and have several appointments next week with builders, architects, and a financial advisor.

This should first bring some clarity for us about what the hurdles are, how much money we can get from the residential units, etc.

We also know that you can’t just contact a company and they will start next week ^^, so we are starting now. What do you think, if we intensively start now and get in contact with companies, when can such a house be built? The current house can be torn down very quickly.

We are relatively new to this field, which is why we have now also sought advice from experts. We would be grateful and thankful for a certain assessment and evaluation! Are 2000€ per sqm realistic for a house of this size?

Regards and a good start into the new year

Mika

Our plans were initially based on our relatively large large plot (46x16m near the city - Münster price per sqm around 10€)

LOL - what does "near the city" mean to you at 10€/sqm for building land? I would expect that price for farmland or forest, but certainly not for building land near Münster...

After much consideration, we have come to the conclusion that this project might not be the best idea, since almost only equity would have gone in there.

You can also take out loans...

Am I right in thinking that it would be good to build a single-family house of about 350-400 sqm that includes multiple residential units,

Then it is a multi-family house and not a single-family house.

so that you can apply for the KFW funding multiple times per residential unit?

You can claim it for each residential unit.

The budget is around 900 thousand euros, which would still be an acceptable equity ratio, right?

It depends on your creditworthiness. An unemployed person would not get 900k euros even with 250k euros of equity.

This is supposed to provide us some clarity about the hurdles, how much money we can generate from the residential units, etc.

Hurdles could be: development plan, costs, architecture, number of residential units, parking spaces, energy efficiency, rental income, etc.

What do you think about starting intensively now and being in contact with companies to find out when such a house could be completed?

Nothing. Before that, you should think about what you actually want. Area, number of residential units, etc.

We would be glad and thankful for some assessment and judgment!
Are 2000€ per sqm realistic for a house of this size?

As a minimum size, yes. Probably more expensive closer to Münster and also extremely dependent on your expectations or goals for the project. If it’s about return, that’s okay. If it has to meet your standards, it will very likely be more expensive. After all, you have to (want to) live with several tenants under one roof, which is not without challenges.

Hello, do you mean Münster with the postal code 48XXX? Please update the price per m² again, €10/m² is certainly not correct there. Near the city, more like 1000, but below 500 is probably difficult. I come from the area and know the prices at least approximately :cool: A multi-family house with 6 residential units could probably fit there. Smaller residential units are sought to rent and also to buy in Münster. Prices are crazy. But if you move in yourselves: a 6-unit house is different from a detached single-family house. You have to want that. In terms of subsidies, a house with 6 small residential units is quite optimal due to the repayment subsidy and tax advantages (special depreciation). However, you probably won’t be finished by the end of '21. Still ... or precisely because of ... if land is available, great investment opportunity..

Be careful, if you only want to take out KFW funds, you will quickly become unattractive to a bank. Otherwise, the previous speakers have said everything. No money, no fun.