Vision House No. 3: Is property lending possible for credit?

I see it completely differently, I will give you a detailed answer later about what is possible and what is not.

Why is everyone so negative in this forum, be more optimistic for once ;-)

As a result, I can conclude for myself (I am an estate financer) that the house building number only works if your parents give up their usufruct. Or you build in such a good location that 25€/sqm rent is possible.

That sums it up well from my point of view. The usufruct makes the house worthless as collateral for a bank in the current situation...

Good morning, sorry I unfortunately didn’t manage it last night.

For property 1, the current lending value must first be determined. Real estate prices have risen significantly since 2016, so it is quite possible that the value is much higher. The general statement that a bank fundamentally does not go into subordinate positions is wrong! It always depends on the overall constellation and the bank itself. There are even banks that have built their business model on subordinate positions.

It is similar for property 2; here too, a lending value assessment must be carried out in advance. The property is also lendable, but every bank will insist on the subordination of the usufruct right behind the newly registered mortgage. So yes, your parents have to cooperate and go to the notary with you.

[*
The questions I currently have regarding liquidity/credit issuance are:
[LIST]
[*]My equity is relatively low at currently 50k Euros, but I could partially lend on property 1 and property 2. Do you think that could be enough to get a loan of 1.5 million with a detailed business plan (future rental income, etc.)? How much equity would I need at a minimum?
[*]Can I lend on property 2 even though there is a usufruct right on it? Would my parents have to go to the bank with me to confirm an entry in the land register? (that wouldn’t be a problem, I just don’t know the process)
[*]I know that pledged stocks, for example, with a value of about 60%, can be counted towards a loan. How does it look with real estate? Is there a percentage value for lending on a property? For example, if I lend on a property worth 100k Euros, are only 50k counted as lending value?

Yes, your equity is low, but as written above, corresponding collateral is available. I am of the opinion that it is possible to get a loan in the amount you mentioned based on equity and collateral if the properties represent the corresponding value, which still needs to be checked.
More equity is always good! The second important point is your household budget, which also needs to be checked in detail, but important information is missing here.

You will have to convert your stocks into cash; hardly any bank is willing to lend on stock portfolios. Properties can be lent as high as the bank cooperates. There is no general statement about how much % is possible, but I have had cases where over 120% was lent.

So, I hope I could help you a bit, have a nice evening.

@ceritus20 The statement subordinate ranking at object 2 makes no sense refers to the value statements of the OP. Yes, there are also subordinate financers. But then you enter spheres like mezzanine with real estate. So 6% interest is the minimum there.

And with that I come to the only point that you do not consider at all. Besides the possibly possible and very expensive subordinate loan as well as the fact that the parents lose the usufruct in the foreclosure, the main point comes up. The profitability of the project. And at the latest that will break the project’s neck (unless it is Harvestehude, Oberkassel or similar).

The subordinated financing would also be done by a savings bank or cooperative bank at "normal" conditions, not just the specialized bank. Relevant here is where you reach the loan-to-value ratio. The usufructuary right is not lost, it remains in place; the subordination only ensures that the bank can realize the property in the event of loan default. Of course, this is a risk in the extreme case when everything falls apart, but only in this way is the financing possible. What you wrote is simply not true, sorry.

That is correct, I did not address profitability because essential information is missing and it was not asked for, only whether it is feasible.

Subordinated financing would also be offered by a Sparkasse or on "normal" terms

If Sparkasse means Sparkasse: at mine I recently received the statement that they generally do not do that. Not even on corresponding terms.