Planning a multi-family house - optimizing costs

Do I understand correctly that 2 out of 5 residential units are supposed to service the entire loan???

At least his half (or rather his 2/3, since his mom bought the property) as far as I understood. In a project scope of over 1 million and with 2/3 of that on the TE's shoulders, I somewhat doubt that the rent from 2x65 sqm is enough to cover almost 700k in loans...

Am I correct in understanding that 2 out of 5 residential units are supposed to cover the entire loan???

Hi, yes. As mentioned, a good amount of equity, about 50%, is still to be invested. And the land is also already paid for.

Hi, yes. As I said, about 50% equity should still be included. And the land is also paid for.

Then in the end it will be a catastrophically bad investment - purely from a return perspective.

Then in the end, it will be a catastrophically bad investment - purely from a return perspective.

The question is what is ultimately better in the long run.

If my mother only builds a bungalow for the money and spends the rest, she would have to sell the bungalow in 10-15 years if something bigger needs to be done, or if she needs care, possibly even earlier. That would be an emotional disaster for her.
I actually wanted her to buy an apartment for herself and two small ones for renting, so that she is secure and the money is well invested and thus secured "for all eternity" as far as possible. She didn't want that.

When I look at the interest rates and the stock market, the risk is too high that right after the Corona costs we suffer a crash and settle in the stock market at the level of Japan. That would be too dangerous for her remaining capital. Additionally, the risk of inflation. In my eyes, there is a lot of risk in many areas.

Because of the WKR, she gets no / hardly any credit except KFW alone.
Therefore, for me, it is the best possible solution in the long-term overall concept. Of course, it is clear that we will still go into details with the bank about credit and KFW when we get the plan approved.

Of course, I am grateful and open to better ideas or suggestions.

When I look at the interest and stock market, the risk is too high that we will have a crash right after the Corona costs and settle in the stock market in the range of Japan. That would be too dangerous for her remaining capital. Additionally, the risk of inflation. In my opinion, there is a lot of risk in many areas.

Especially with a long-term investment horizon, the market offers many good entry opportunities ;-)

The question is what is ultimately better in the long run.

A sensible investment!

If my mother only builds a bungalow with the money and spends the rest, she will have to sell the bungalow in 10-15 years if something bigger needs to be done, or if she goes into care even possibly earlier. That would be an emotional catastrophe for her.

If she spends the rest. In your scenario, she spends the rest on building the house. Do you think the risk is lower in a multi-family house after 10-15 years? The risk there is actually several times higher that something will need to be done beforehand (and regularly). With every tenant change. Much more technology. Rent nomads. Wear and tear on the house by strangers. Etc.
In my opinion, you are imposing a higher risk on her (with significantly lower living quality).

Because of the WKR, she alone hardly gets any credit besides KFW.

That is complete nonsense. The WKR poses absolutely no problem for older people.

Therefore, for me, it is the best possible solution in the long-term overall concept.

For YOU, not for the mother ;-)

Hi, yes. As I said, about 50% good equity should still be included. And the plot of land is also paid off.

I summarize: The mother's money is enough for a bungalow, but not for care. Instead of the bungalow, the residential unit in the planned building will be paid for. Costs the same, leaves just as little remaining.

And now an additional four residential units come along that already support themselves after 10 years and generate enough to pay care costs permanently without worries? That can't work...