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Archived Offer for Berlin Fliegerviertel

Its quite interesting to see real offers in tide markets, especially in areas with very high demand and less to no offers. We posted about the hidden and central pearl of Tempelhof, the so called “Fliegersiedlung”.


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On 16. Feb 2014 I found this immobilienscout24 offer in my inbox:

“Rohjuwel in der Fliegersiedlung *Westausrichtung*”

Askingprice/Kaufpreis: 325.000,00 EUR
Residential space/Wohnfläche: 101,00 m²
rooms/Zimmer: 5,00
plot size/Grundstücksfläche: 200,00 m²
Scout-ID: 73349591
Adress: 12101 Berlin, Tempelhof (Tempelhof), Leonardyweg 20

101 sqm for 5 rooms seems small, but the floor plans are quite good.
However taken into account that this house needs rehab and upgrading 3250 Euro per Sqm, doesn’t seem cheap. But if you want to live in this conservative yet cosy neighborhood, in a house with garden, with its central location, this might be a deal.

The offer mentioned above is not longer available on Immobilienscout 24  (18. Feb 2014).

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What you should check while buying a flat in a co-op or condo

Please read this upfront: I am an estate agent and asset manager in Berlin, I sell blocks and apartment buildings to private investors and institutional funds, with an equity base of at least 350k Euro, I cannot help you find a flat, but if you send me an inquiry regarding the purchase of a flat or an apartment (please only trough this from) I will transfer you to honest and good estate agents, whom I know in person and I will supervise the process on the line, nothing more, nothing less. Please understand that I cannot meet you, nor talk to you on the phone, best way, really, really is this form, I will reply fast and ask you additional questions to narrow your search.

How-to-do a proper legal due diligence for a flat purchase in Germany

Rule No. 1: Don’t believe what you don’t have in writing

You need hard facts, and that means copies of the contracts/documents.
If they won’t send you copies go to the owners/property managers office and look at the originals.

Rule No. 2: Talk to the renter

or any other party that you meet in the house, ask them if the ylike to live there, just start talking to them after a minute they will tell you about the bad and ugly, but take into account that most renters complain always. Just listen carefully and see if something really bad comes up, something that yu cannot change, or will affect the rent/fluctuation of renters heavily. It might be enough to walk trough the building with open eyes :-)

Rule No. 3: Talk to the Property Manager

Try to talk to the property manager of the co-op/building in person, and check his flexibility and willingless to talk to you (at all) and in English. Remember if the broker tells you the guy talks English, doesn’t mean he is willing to..

Rule No. 4: Let the legal stuff be checked by somebody who knows how to check legal stuff

The documents should be checked by a lawyer NOT your broker, nor the property manager, the person checking this for you should talk German!

Keep it simple for you and your lawyer

Send all the documents listed below to the lawyer at once and ask him/her to have a preview and give you an appropriate lump-sum fee up front. You should give or at least ask for a timeframe for the procedure.

List of documents needed for legal Due Diligence – English/German version –

These papers should be provided by the broker (or owner or property manager), you find the right German terminus technicus in brakets):
1. the offer (issued normally by the broker/estate agent) (Expose)
2. the 5 or at least the 3 last reports of the meeting of the owners (5 letzten WEG Protokolle)
3. the co-op contract agreement (WEG Satzung / Gemeinschaftsordnung)
4. last annual statement of the whole building (Jahresabrechnung)
5. purachse contract draft (Kaufvertragsentwurf)
6. financial plan for the upcoming year (Wirtschaftsplan)
7. co-op agreement with the property manager (WEG Verwaltervertrag / Verwaltervertrag fuer das Gemeinschaftseigentum)
8. property management contract for the unit to be purchased (not the one in place but the one the property manager offers you) (Hausverwaltervertrag fuer das Sondereigentum)
9. copy of the land register (Grundbuchauszug)
if the property is rented:
10. rental contract with all amendments

Due Diligence – German version – for your disposal

You can copy this German version to send it by email:
1. Expose
2. die 5 letzten WEG Protokolle, zumindest die letzten drei
3. WEG-Satzung bzw. Gemeinschaftsordnung
4. letzte Jahresabrechnung
5. Kaufvertragsentwurf
6. Wirtschaftsplan für das kommende Jahr
7. WEG Verwaltervertrag / Verwaltervertrag fuer das Gemeinschaftseigentum
8. Hausverwaltervertrag fuer das Sondereigentum
9. aktueller Grundbuchauszug
10. Mietvertrag mit allen Nachträgen (wenn vermietet)

My recommendation for a lawyer/law firm

If you need a German speaking Lawyer to check all this for you , here are my recommendations.

1.) WMRC Rechtsanwälte

Chaussestr. 5
10119 Berlin
Tel.: +49-30-2888483-0
Fax: +49-30-2888483-10
E-Mail: info@wmrc.de

2.) Ludwig Braun Domrich Rechtsanwälte

Poststr. 12 D-10178 Berlin
Tel +49-30-2021 555-0
Fax +49-30-2021 555-11
E-Mail: info@lblex.de
The companies are not to big so you talk directly to the right person.

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Change in the handling of property sales to consumers

For condo sales / purchases there is an important change.

The notary has to ensure that the buyer (consumer) had access to the contractual text 14 days before the signature.
Therefore most notaries and not the seller/broker will (read: has to) send out the contracts them self.
Text of the law in German: Änderung des Beurkundungsgesetzes § 17 Absatz 2a Satz 2 Nummer 2 des Beurkundungsgesetzes vom 28. August 1969 (BGBl. I S. 1513)

Here you can find back round information and argumentation of the politics (Bundestag).

 

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Berlin will increase the land transfer tax from 5,00 to 6,00 % of the purchase price starting 01. Jan. 2014.

All notary contracts signed after 31.12.2013, 12:00 p.m. will be charged the higher tax.
Link to the announcement on the official Berlin site in German.

See the list of costs to acquire property in Berlin, Germany.

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tips from a successful investor

photo of Ekkard StreletzkiIn the current issue of German entrepreneurs magazin impulse
constructor and hotel operator Ekkehard Streletzki gives very good insights into his business principles:

“Others say, that the most important thing is location, location, location.
I say, the most important thing is repay, repay, repay !”

And he is right, he decided to open The Estrel Berlin Europe’s largest convention-, entertainment- & hotel-complex, with 1,125 rooms in the Berlin, in the middle of nowhere. Neukoelln was until lately a no-go area for most Berliners.

But because there are just a few hotels in Berlin to host literally thousands of guest,
The Estrel Berlin beats the competition with pure size.

And like other well known investors and business men Ekkhard Streletzki knows that only a few things bring freedom to entrepreneurs and investors:
Real cash flow and the biggest possible equity in the deal.

Location, location, location works for investors that want to secure their wealth,
but if you want to build wealth location, location, location is the wrong strategy.

Location reduces risk but reduced risk always comes along with reduced income (or yield).

To close a deal with minimum equity and to hope for a big capital appreciation is a misleading get-rich-quick-scheme in a new package.

If you think a deal is worth to be sealed, always put as much equity as possible.
If you need a loan, try to minimize the loan from the very beginning.
If you have a loan repay as much as possible.

Hotel Website

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Location scouting

We added new locations to our hunting list, and we would like to tell you about it.

Weitlinger Kiez in Lichtenberg, the area around Weitlinger Strasse, named Weitlinger Kiez (link in German)

Kaskelkiez in Lichtenberg, the area around Kaskel Strasse, named Victoriakiez or better know as Kaskelkiez (link in German)

Karlshorst in Lichtenberg, 

Oberschoeneweide in Berlin-Treptow 

Karl-Kunger-Kiez in Alt-Treptow,

on top check our location map link above.

 

 

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BBC on Living in: Cities known for art and culture

I was interviewed by BBC and a small piece of what I told you can read here:

http://www.bbc.com/travel/feature/20130319-living-in-cities-known-for-art-and-culture

As the third most-visited European capital after London and Paris, Berlin is still a place where artists come to create their dreams.
The majority of residents in Berlin – nearly 85% – rent, and housing costs have risen more quickly than in other German cities. However, prices are still far lower than in other major Western European cities, including Hamburg, Brussels and Vienna. “There are many advantages to renting,” said Alexander Korte, founder of BerlinInvestment.com, an estate agency specialising in foreign buyers. “The laws are pro-renter and the landlords can’t raise the rent just as they wish.” A 70sqm flat can rent for around 600 euros a month in neighbourhoods such as Kreuzberg or the gentrifying Friedrichschain, while Mitte is seeing rents reach 2,000 euros a month.
But buyers are also flocking to Berlin since apartments and houses are cheap for a major European capital. The property market has seen an increase in residential prices of more than 32% since 2007 and luxury developments and conversions are in demand. The rise in price is fuelled by Spanish, Italian Russian, British and French investors, as well as Germans, who consider Berlin a bargain and want a safe and inexpensive place for their euros. Currently, the average housing price in Berlin is 2,000 euros per square metre.

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NY Times discovers hidden pearl in Berlin Real Estate Market

Its is astoundingly how fast and good especially foreign journalist, who seem to live in Berlin, discover new areas that are attractive and or undervalued.
Now NY Times journalist Nick Foster published one of my longtime favourites in the market.
[click to continue…]

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2013 Change in Real Estate Transfer Tax Law in Germany

The transfer of property is subject to German Real Estate Transfer Tax.
Hereby the hight of the transfer tax is between 3,5% and 5% (Berlin) depending on the federal state.

To avoid German real estate transfer tax it was practice to sell shares of a company owning the property (so called share-deal) instead of selling the property it self (so called asset-deal).

Now Germany put a new law (effective on June 7, 2013) to prevent this miss-use and make the German federal tax law more fair.

Here is how the so called RETT-Blockers (RETT stands for Real Estate Transfer Tax) used to work:

Not the property would be transferred but 94% and 6% shares of a company owning the property.

The transfer of shares in real estate-owning companies is in general subject to German Real Estate Transfer Tax if at least 95% of the shares in the company are accumulated or at least 95% of the shares are transferred to new shareholders.

To circumvent this it was use to transfer only 94% of the shares to the new owner and the rest of 6% either stayed with the old owner or were transfer to another entity not equal to the 94% shareholder. However the 6% entity could be owned by the 94% company trough a holding structure.

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IVG published Germany Office Market Scoring Report

As the yields in residential markets shrink and the office market seems one possible investment alternative this report might give advise

The IVG Germany Office Market Scoring research report can be found here:

http://bit.ly/YCjhUW

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