No 100% payout on the property?

The equity, which is part of the financing of the entire construction project, will have to be used primarily. What is then missing for the upcoming payments, e.g. for the property or the demolition and subsequently for the construction, will then be paid out to you by the bank as a loan little by little. This is the normal procedure.

Hello,

I can only agree with the previous speakers. Banks want the equity to be used first. It could also happen that it is gone at the start of the construction phase and additional financing is needed. No or hardly any bank wants to bear this risk or wants to be compensated for it through a higher interest rate that you pay over 15-20 years.

You should only contribute as much equity to the total financing as is absolutely necessary and keep the rest as a buffer. Under no circumstances should you "draw blank".

We have officially not invested a single cent of equity into the construction & land purchase so far - the bank was not bothered by this and it was also not a real negotiation point.

We have officially not invested a single cent of equity into the construction & land purchase so far - the bank was not bothered by that and it was not a real point of negotiation.

... But it is not the norm

But it was nothing unusual for us either - and that’s what the OP wanted to know, that it is possible after all. Here it is presented as if it were an absolute no-go...

And I know from my circle that I am not the only one.

and that’s what the OP wanted to know, that this is also possible.

There is nothing that is not possible if both parties want it that way. The "weaker" the overall financing is, the less this is likely to be possible. But it also means that a great financing can easily allow such things without problems. Pro-rata would also be conceivable, i.e. a risk sharing through the proportionally equal-ranking involvement of equity and debt capital. Be creative and speak openly and directly about the reasons behind the design you want. Then it will work out with the neighbor too. ;)