Hello,
We are still at the very beginning of our planning. I’ll try to explain briefly. We currently live in a semi-detached house (owned) and want to buy a plot of land for construction. However, we have little equity and would initially need to finance the land alone. For building the house, we would need the proceeds from selling our current home. We do not want to move into a rental property in the meantime. What options are there? Is it possible to take out a second large loan for both the house and the land initially and later include the proceeds from selling our current home? Building while renting would probably have been easier. Maybe someone here can share their experience? Thanks and best regards
We are still at the very beginning of our planning. I’ll try to explain briefly. We currently live in a semi-detached house (owned) and want to buy a plot of land for construction. However, we have little equity and would initially need to finance the land alone. For building the house, we would need the proceeds from selling our current home. We do not want to move into a rental property in the meantime. What options are there? Is it possible to take out a second large loan for both the house and the land initially and later include the proceeds from selling our current home? Building while renting would probably have been easier. Maybe someone here can share their experience? Thanks and best regards
H
HilfeHilfe26 Aug 2020 06:55Bridge financing. Always make a realistic assessment of the expected sale proceeds and whether the loan amount needs to be increased to cover ongoing interest payments.
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nordanney26 Aug 2020 09:22DaSch17 schrieb:
Condominium/duplex: income value is usually higher than material value
Single-family house: material value is usually higher than income value And who really cares about the income value for these types of properties? Neither buyers, sellers, nor any appraiser usually consider calculating it.
However, if your point with these statements is that the yield increases from detached single-family houses through semi-detached/row houses up to condominiums, then I agree with you. From a yield perspective, though, I would never buy or build any kind of single-family house.
nordanney schrieb:
And who cares about the income value for these types of properties? Neither buyers, sellers, nor any appraiser even think about calculating it.
However, if you mean by these statements that the return increases from detached single-family houses to semi-detached/terraced houses and then to condominiums, I agree with you. Although, from a return perspective, I would never buy or build a single-family house in any form.That’s basically what I wanted to say, yes. Return single-family house < Return semi-detached/terraced house < Return condominium (in most cases)
I do believe that professional real estate investors regularly calculate the income value and replacement value of their properties. Even I do this for our condominium. By the way, the calculation and the resulting figures were also one of the reasons for purchasing in the first place...
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nordanney26 Aug 2020 14:08DaSch17 schrieb:
I believe that professional real estate investors regularly calculate both the asset values and income values of their properties. Asset values apply to individual properties such as condominiums or single-family houses. Income values are used for income-generating properties like apartment buildings, logistics facilities, care homes, hotels, etc.
Professionals do not calculate income values for individual apartments. Typically, professionals also do not own single apartments separately.
nordanney schrieb:
Tangible asset values for individual properties such as condominiums/single-family homes. Income values for income-generating properties such as multi-family buildings, logistics facilities, care homes, hotels, etc.
Professionals do not calculate income values for individual apartments. Professionals usually do not own individual apartments either. The income approach is used for rented properties, and the tangible asset approach for owner-occupied properties, which is common banking practice.
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neo-sciliar26 Aug 2020 14:30The original poster doesn’t intend to rent out (neither do I, by the way); setting financial aspects aside, personal interest is also a factor here.
Bridge financing is expensive, as already discussed.
You can also arrange financing with a short fixed interest period. After the fixed period, you are free to repay as you wish. This should be significantly cheaper.
Alternatively: sell your apartment today but arrange the transfer only after you move into the house. Advantage: you already know the sale proceeds and can directly arrange financing for the remaining amount needed. Bridge financing would only be required for the proceeds from the sale. Disadvantage: finding a buyer is somewhat more difficult.
Bridge financing is expensive, as already discussed.
You can also arrange financing with a short fixed interest period. After the fixed period, you are free to repay as you wish. This should be significantly cheaper.
Alternatively: sell your apartment today but arrange the transfer only after you move into the house. Advantage: you already know the sale proceeds and can directly arrange financing for the remaining amount needed. Bridge financing would only be required for the proceeds from the sale. Disadvantage: finding a buyer is somewhat more difficult.
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