Berlin Beware

[teepeeseller]

Originally Posted by manicman

Hi Teepeeseller & all,
Don't get me wrong, i'm not risk averse (just want Garuntees LOL), but measured risk with sound fundamentals will be my way forward. I agree, Berlin isn't the only place to be looking, but with limited funds you have to start somewhere and Berlin seem's very attractive. I also believe that BTL has a place within an investment strategy, used in the correct manner and can limit the amount of exsposure within a single market or the European as a whole. I looked at Hamburg when first got interested in Germany, and think I will revisit the subject. Don't have alot of cash (don't Know where it goes) so I'm very interested in leverage and would appreciate yours (and JMBroad) insight to the subject at (small, for now) invester level WRT the current issues within the finance sector and the Liberalisation of the Mortgage market in Germany. Max ltv of 70% and a min lend of 50K euros I'm led to believe. I will for many years to come be a slave to my paymasters ( a labour prostitute as my colleague puts it lol), but the gradual increase of income coming from other areas sounds a lot more attaractive

Hail Manic,

Contact Berlin real estate centre. They have an agreement with a finance house and access to some lovely flats in Prenzlauerberg (nice area and not at the top of the pile yet so scope for growth). Arguably a better bet than Charlottenberg because everything in Cberg is already at top dollar for Berlin.
On these I think they arrange tenants and are netting 5/6%. Not sure how they arrange prop management however. I'm sure they will have a reputable company on their books or be able to advise you. I have agents I use for management but they are a small outfit - I've just stayed loyal to em because they are friends as much as anything else nowadays and would never let me down because of that.
Tel nr is 01527 406982 and the fella who looked after my last client was a Mr Hudson. He does most of their btl and commercial investment.
Off to Atlanta for a meeting with a gentleman over there who has his fingers into bank foreclosures. Then to Dresden in June. Hamburg is on the itinerary but subject to change of course. If I find anything of real interest I will let little snippets slip.
Good luck with your German ventures - Berlin is a great place to start and only going to get better.

[JMBroad]

Originally Posted by manicman

Hi Teepeeseller & all,
Don't get me wrong, i'm not risk averse (just want Garuntees LOL), but measured risk with sound fundamentals will be my way forward. I agree, Berlin isn't the only place to be looking, but with limited funds you have to start somewhere and Berlin seem's very attractive. I also believe that BTL has a place within an investment strategy, used in the correct manner and can limit the amount of exsposure within a single market or the European as a whole. I looked at Hamburg when first got interested in Germany, and think I will revisit the subject. Don't have alot of cash (don't Know where it goes) so I'm very interested in leverage and would appreciate yours (and JMBroad) insight to the subject at (small, for now) invester level WRT the current issues within the finance sector and the Liberalisation of the Mortgage market in Germany. Max ltv of 70% and a min lend of 50K euros I'm led to believe. I will for many years to come be a slave to my paymasters ( a labour prostitute as my colleague puts it lol), but the gradual increase of income coming from other areas sounds a lot more attaractive

It will get worse before it gets better - lots of big German banks took a hit from the US subprime and more are yet to disclose the scope of their losses. At the moment the norm is 60% max LTV, min 50k however I can see that going down to 50% LTV 50k min before too long. You can still get 70% but the paperwork needed, the time and the hassle are more than most investors are willing to go through.

As for other cities in Germany - I'm not convinced personally. A friend runs the real estate side of an investment bank in Rostok and while they are still making sales and business is seemingly ok, it's not exactly a market for everyone.

[manicman]

Originally Posted by JMBroad

It will get worse before it gets better - lots of big German banks took a hit from the US subprime and more are yet to disclose the scope of their losses. At the moment the norm is 60% max LTV, min 50k however I can see that going down to 50% LTV 50k min before too long. You can still get 70% but the paperwork needed, the time and the hassle are more than most investors are willing to go through.

As for other cities in Germany - I'm not convinced personally. A friend runs the real estate side of an investment bank in Rostok and while they are still making sales and business is seemingly ok, it's not exactly a market for everyone.

Hi All,
Seems all the banks are in the same position and I agree thing's are going to get worse. I'd be interested to read up on your strategy (JMBroad) if does not compromise non-disclosure agreement or pm me if you have any suggestions.

Happy Hunting

[bromley9]

Hi, I have very recently bought auction from the SGA auction. It's one of the big ones. The problem I have is I think they are trying to charge me too much. They quote 6% their commission + VAT, so 7.2. Then there is 3.5% german state tax + notary + solicitor + other expenses. However, they want to charge me 6% commission plus a wopping 10% for other expenses. So 3.5% german state tax + notary + solicitor + other expenses = 10%. I've read that notary & solicitor are standard fixes, around 1%, so the numbers don't add up to 10%. Anyone with any comments? Thanks very much.

[german ophile]

Seems everyone's getting shafted in Berlin at the moment.

It is just not what it's held out as being.

I'd say avoid, much better to look at Dresden or Leipzig.

[teepeeseller]

Originally Posted by german ophile

Seems everyone's getting shafted in Berlin at the moment.

It is just not what it's held out as being.

I'd say avoid, much better to look at Dresden or Leipzig.

A couple of months is a lifetime in this game. Not fair to say everyone is being shafted in Berlin though. My favourite has always been Dresden (Yes I am biaised)
Recent months have seen some bargains in other areas of Germany also. This last month has seen a large British investor purchase over 3,000 properties in the Berlin area. Whilst interest from my clients has (not surprisingly given the financial situtation) dropped off in the last couple of months (this is also the story with other areas I operate in - not just Germany) there is still a trickle of those wishing to purchase in Berlin.
The following is from an e-mail from my partner in the USA received last night, so it is bang up to date as I type this.
We have moved our focus away from the SE states as a result of the downfall this last twelve months. This doesn't mean there are not opportunities in the USA - merely that right now inland Georgia is dropped as a main focus of our efforts.
Germany is no different - it has been flat with the occassional regional blip up or down for years. The main attraction for those wishing to purchase is their belief that you cannot get the amount of property, the standard of property with the same potential for the same price, in a safe environment anywhere else in Europe (arguably even further afield) - I agree with that and the bulk of my investments are still made in Germany and will continue. Yes, we could alll jump on the plane from Stansted to the latest hot-spot and by the time the plane has landed it's the next island that is now the latest hot-spot. I have railed against the get rich quick merchanst and what I saw as the inevitable hurt coming from that greed and snake-oil salesmanship for years. UNREALISTIC EXPECTATIONS!
Germany does not and probably never will be a target for the BTL Blx and Bs I've seen in the glossies or on the TV stations - for the get rich slow brigade such as myself it is a blessed relief. Germany has been good to me and my clients or they wouldn't come back for a second or third punt - I sell houses to realists not dreamers.
THE MAIL;

Our market is dead here and I mean dead.
They auctioned off or tried to 1000 homes in metro Atlanta. House that sold for
165-200K 18-24 months ago had starting bids of 20K.
I know 5 investors who attended, not one bought anything. They all said in the areas they were in they could 50K into them and would not
be able to sell them

[german ophile]

Very interesting post, teepeeseller.

I can see you know what you're talking about. Most of all, I have to agree with what you say about unrealistic expectations. It is always the killer, especially in the good times.

Don't blame you for loving Dresden. It's become a second home to me.