Buying property as an investment

11 posts in this topic

Hello all,

 

I want to run something by you experts. A Finanzberater I know has told me about an investment that sounds too good to be true. It seems to run on a lot of ifs and whens. According to his model, I would buy a property and rent it out to someone. Because of some Zuschüsse and so on, in the end I would supposedly end up making a small profit even. Here is the example model he sent me :

 

Kaufpreis (@ about 50 q.m) € 184.600,00
Notar und Grundbuch 2,0 % € 3.692,00
Grunderwerbsteuer 3,5 % € 6.461,00
Makler 3,57 % € 6.590,00
Gesamtkosten € 201.343.00

Eigenkapital € 000,00

Zuschuss FA € 6.590,00 (FA is the guys firm. Basically he would initially "waive" the brokerage fee.)

Bankdarlehen: € 195.000,-

 

Zins 1,5 % 10 Jahre € 2.925,00 (Part of the installment that goes towards paying back interest)
Tilgung ca. 2,o % Fonds, Bausparer, etc… € 3.900,00 (Part of the installment that goes towards repaying the loan)
Wohngeld € 0.720,00 (This goes to paying the Verwaltungsfirma, Hausmeister etc.)
Belastung jährlich € 7.545,00
Abzüglich Mieteinnahme warm € - 5.616,00 Steuerersparniss zuzüglich je nach Einkommen!! ( I don't understand this part. I imagine, any income from rent would be taxable. Is there a savings to be had on account of the housing loan such that the tax rebate - tax difference ends in profit?)

Ergebnis p.a. € -1929,00
Mtl. € - 160,75 (effective loss per month)

 

KFW Rückfluss € 10.000.00 (Here is where the if and when comes in. I saw that KFW is a bank that provides grants. I understand certain types of housing are eligible for a grant? He calculated 200 Euros per q.m to end up with 10k)
12 LVL Account 6000.- mtl. ca. € 300,00 (Another "ideal" situation. As a Finanzberater he also offers a trading account. He explained to me that they work with a forex trader (Cant remember the name just this moment) and have shortlisted their own day traders after monitoring their return rates. As an investor I get returns when they make winning trades with my capital. They get a flat fee from the platform for each trade (rather transaction) made on my account. This part is a pyramid scheme which he told me without hesitation. If I was to bring more people, then the trading platform would pay a fee to me on each of their transactions, and gets kicked up all the way to the top guy in the pyramid. So the 300 euros is an estimate on how much monthly returns I am supposed to expect should I reinvest 6k from the 10k I got from KFW)
Gewinn mtl. € 140.- € (with the above "deal")
Einmalig zuzüglich 4000.- € Cash (I would pay him the remaining 4k from the 10k from KFW in lieu of having waived the broker fee)

 

Seems ideal and I am considering it. I mean, even if the KFW grant doesn't factor in, it is still about 200 bucks a month for me to own a property in Dillingen. Of course, I haven't seen any paperwork yet and was considering paying a lawyer to have a look at it before I signed.

 

I'd be glad to hear what you guys think.

 

Happy long weekend!

 

Cheers!

0

Share this post


Link to post
Share on other sites

At least some of that is highly dodgy. If you're interested in repaying the capital quickly, you should be doing so directly, not through a fund and/or Bausparvertrag, both of which only serve to increase the broker's commissions - to say nothing of the MLM brokerage business he's trying to drag you into. The place that's been quoted also seems to be overpriced - possibly by as much as 20%, at least according to this Immowelt analyis.

 

His adding and then deducting the real estate agent's fee is bullshit, because charging you for it would be considered illegal self-dealing AFAIK.

 

I have no idea why a KfW grant would be awarded.

 

The figures the guy gave you are highly flattering, to say the least. It rarely works out as favorably as predicted. You might want to google "Schrottimmobilien" when you have time.

 

What do you think of this setup, @Starshollow? It throws up all kinds of red flags for me.

6

Share this post


Link to post
Share on other sites
1 hour ago, El Jeffo said:

I have no idea why a KfW grant would be awarded.

 

KFW lends money to everyone who applies for it when buying property and their conditions might be slightly better than a normal bank, but they have a limit in how much you can borrow from them.  Part of our mortgage was with them in our previous contract before renegotiation.   They can give you as well a grant, but for that, as far as I know you have to do some sort of renovation that improve the "green" level of the house, i.e. going from diesel oil to gas, or upgrading the house insulation, improving the roof, and so on.  And 10K sounds really a lot for a 185K property.

 

So yes, the whole thing looks very dodgy.

0

Share this post


Link to post
Share on other sites

Regarding the Fx Trading, I just saw his podcast. So basically they just "copy" the trades of another trader on the platform whom they observed to be consistently making winning trades. That itself is something that completely goes against what I envision for myself with regards to my trading goals.

 

Thanks both for your replies, I knew it sounded dodgy but it helps to hear others say it too. I would love to hear @Starshollow's take on it too.

 

Cheers

0

Share this post


Link to post
Share on other sites

The fact that he'd even seek to quicken FX trading with a property purchase speaks volumes. They're not two great tastes that taste great together.

 

A property is a long-term investment. FX trading is just short-term speculation - and not really something an "investment broker" should be pushing on consumer-grade investors.

1

Share this post


Link to post
Share on other sites
 
 
 
 
 
 
4
2 hours ago, generalmartok said:


Abzüglich Mieteinnahme warm € - 5.616,00 Steuerersparniss zuzüglich je nach Einkommen!! ( I don't understand this part. I imagine, any income from rent would be taxable. Is there a savings to be had on account of the housing loan such that the tax rebate - tax difference ends in profit?)

 

 

I don't understand this either. It looks like he's trying to make it look like you would save on tax with this. I don't see how that would work. You can deduct interest as a cost from your rental profit but your rental profit is fully taxable. I also find it dishonest that he's quoting the "Warmmieteinahnmen" as income. For the purposes of income one should always quote the rent as "kalt".

 

I really don't get would someone would need a Finanzberater to invest in real estate. All you need to do is find a property that's already let and buy it. Why do you want to involve this guy other than to make him money at your expense?

4

Share this post


Link to post
Share on other sites

sounds like an absolute scam - run from it and run fast. There are so many things in there that don't make sense. Unfortunately, I am on holidays and can't really dive deep into this, but my second best recommendation (after me checking this and answering you being THE BEST :-) ) would be to take this to your next Verbraucherzentral and have them look over it. I am sure they can find tons of loopholes and false information. Particularly the refinancing looks extremely dodgy and is the part where the Finanzberater (what is his real license, btw? Did you check if he is licensed as insurance intermediary (34D) or investment advisor (34F) or else?)  will make tons of money while the risk that this goes lopsided is all yours. 

 

You are right, it sounds too good to be true and definitely is. 

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.
3

Share this post


Link to post
Share on other sites
On 14.8.2019, 12:03:17, El Jeffo said:

At least some of that is highly dodgy. If you're interested in repaying the capital quickly, you should be doing so directly, not through a fund and/or Bausparvertrag, both of which only serve to increase the broker's commissions - to say nothing of the MLM brokerage business he's trying to drag you into. The place that's been quoted also seems to be overpriced - possibly by as much as 20%, at least according to this Immowelt analyis.

 

His adding and then deducting the real estate agent's fee is bullshit, because charging you for it would be considered illegal self-dealing AFAIK.

 

I have no idea why a KfW grant would be awarded.

 

The figures the guy gave you are highly flattering, to say the least. It rarely works out as favorably as predicted. You might want to google "Schrottimmobilien" when you have time.

 

What do you think of this setup, @Starshollow? It throws up all kinds of red flags for me.

Fully concur... would also assume that the property is overpriced without even looking at any comparing websites. Because that is the typical mode of operation with these scams.

 

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.
0

Share this post


Link to post
Share on other sites

Thank you @Starshollow. Yes, I called him last week and said we want to back out. I ended up getting an "Entwurf eines Kaufvertrags" from a notary. I sent it back today saying "I told Mr. xx already that we do not wish to do this. Hence I am sending you back the documents". I used Einschreiben Einwurf. So far all I had signed was a Selbstauskunft that had our personal info and income details.

On 8/17/2019, 10:59:54, Starshollow said:

would be to take this to your next Verbraucherzentral

Since he is also the Honorarberater who could be witness if my case with the insurance fraud went to court, I don't want to do that just as yet.

On 8/17/2019, 10:59:54, Starshollow said:

Did you check if he is licensed as insurance

As per the IHK Database, he is licensed for § 34f Abs. 1 S. 1 GewO , § 34i Abs. 1 S. 1 GewO and 34d Abs. 1 GewO . He told me on the phone once he has "sieben Berufe"

0

Share this post


Link to post
Share on other sites
Just now, generalmartok said:

Thank you @Starshollow. Yes, I called him last week and said we want to back out. I ended up getting an "Entwurf eines Kaufvertrags" from a notary. I sent it back today saying "I told Mr. xx already that we do not wish to do this. Hence I am sending you back the documents". I used Einschreiben Einwurf. So far all I had signed was a Selbstauskunft that had our personal info and income details.

 

Yikes. I hope you don't end up getting a bill from the notary.

 

2 minutes ago, generalmartok said:

Since he is also the Honorarberater who could be witness if my case with the insurance fraud went to court, I don't want to do that just as yet.

That's rich.

You: "Hey, this guy tried to defraud me - can you help?"
Him: "Sure, just let me try to defraud you first. You seem like an easy mark."

1

Share this post


Link to post
Share on other sites
33 minutes ago, El Jeffo said:

I hope you don't end up getting a bill from the notary.

So do I. I will not pay any notary I did not engage. The notary was engaged by the real estate company that's selling the property.

33 minutes ago, El Jeffo said:

You seem like an easy mark

He was almost right :D

1

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now