Hi Guys.

Just had a few questions on the above and was wondering would any of the experts be able to help.

Just wanted to get some info on the actual procedure of splitting a whole building into individual apartments and then selling off.

How complicated is this? I noticed that a lot of you have bought buildings in Berlin (guys like Lewis)

Is it possible to purchase under a UK company rather than an individual. My plan is to maybe buy a tenanted fully managed block and then in say 5 or 7 years down the line start selling off individual units.

What is the actual procedure of splitting these apartments?Is there anything restricting me from trying to do it straight away?

Can they be bought under a special purpose vehihcle such a company here in the uk or does it have to be a German company.

What happens with problems with leases and tenancy agreements? Do i have to hire specialists or will a well established management company help with any problems with leases, tenancy contracts, collecting rents etc etc

Any info would be greatly appreciated from anyone who has done this or has knowledge on Berlin, Leipzig

Thanks

Myself and a freind have bought a block. Splitting up deeds is costly and time consuming, not to mention complex.
We might do this one day but found for now it was'nt cost effective.

We did set up a UK LTD company to buy the property. As the business is carried out in Germany only about 15% Taxation should apply.

We bought from a trusted contact who acted for us at auction. That way we paid less than 50% of the official surveyors recommended guide price. The yield is over 20% and we hope to get this to 30% by refurbing some of the empty flats in order to make them lettable.

A whorthwhile investment hopefuly, but not the easiest endeavour.

Thanks Dog

Crikey 20%? Cant be in Berlin surely? Dresden or Leipzig perhaps.

So you have bought a whole block and are going to sit on it for a while before reselling. What happens if there is any complications in the meantime with tenancy agreements in Berlin?Does the management company sort this out for you?

Dogbox, ive got some local agent in Berlin who seems very good but is trying to say that a survey is not usually required in Germany? Surely this cant be right. Its a turn of the century building so i must ensure its safe.Apparently the bank dont even need a survey. Do i need to find an architect or a surveyor(is there such a thing in Berlin) to do a full check on the property?

Cheers

With the repo block we purchased came a document that included a surveyors report. I'm under the impression such a document is typically provided pre - sale by the seller.

As for complications we found a very competitive rental agent. He takes care of everthing although we keep a close eye on expenses. We expect to make improvements to the building and will have a contracter work to a fixed price per unit.
Additionaly we have a back up rental agent, being the guy who sourced the property in the first place. We did'nt use him as he prefers property closer to Berlin but he is all about rental Management - the sales side for him is useful but not his key focus. In other words he is very keen not only to sell you something, but to manage the property. HE WONT SELL YOU A DUD AS HE WONT WANT THE MANAGEMENT HASSLES LATER.

You are correct, it's not in Berlin as we could'nt find a decent income yield. It's in a small town that has an expanding local economy and is recieving large numbers of Polish people.
I note you mention Leipzig. For many reasons I think Liepzig represents a good opportunity.

We primarily bought for income. May sell one day, but where would we reinvest to achieve such high yields?

The property tenants are long standing so a fair indication they are contnent & settled, which is good for us.

I forgot to say, the chap who sourced the property also advised it's the material state and investment potential. We had to pay him to do this, and I assure you he is very honest and impartial as he is focused on the longer term picture. In fact he felt it was not a property to buy, but we insisted!

Please dont expect everything for nothing as is typical of the Brit mentality. German agents in my experience detest time vampires, those armed with lists of petty questions and whom want to view lots of properties and then end up buying nothing.

If you want a low priced block you MUST accept there is higher risk, and a lot of lose ends, and be prepared to 'suck it and see'. If you want lots of questions signed off you might not get a bargain.
Watch out for renovation costs especially on older buildings. My advice is try and get something in good order as far as is possible. Most of our block was in fair order with new heating, but there were some flats that could not be viewed (a repossessed vendor is'nt the most affable of sellers). We took the view that they would need redecoration and new kitchens and bathrooms. This turned out to be the case - fair enough as we got the block 50% under value (ie the surveyors indicated value) and with a terrific yield and lots of land in a growing town.

Cheers Dog.

Sounds like a good deal and you made a gutsy move.

Just going back to the survey issue im still a little unclear. Im not sure i could sleep easy at night by relying on a survey the seller has provided like you did. Is it standard procedure for a property to be provided without a survey?

Do i contact a third party like an engineer to get a survey done on the property to make sure it does not fall down in 5 years?

Cheers