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I have just bought 2 apartment blocks in Leipzig. It is a funny place, lots of beautiful empty place that cost more to do up than buying done up houses from owners that have gone bankrupt. Nice town centry, some big new businesses but still 20% unemployment. One for the long long term. Yields in twon centre are 7-8%, outside towncentre 10-12%.

If you look for agaencies on the net there is only one good one. go to www.immobilienscout24.de. It is unfortunately not in english.

Good luck

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I have just bought 2 apartment blocks in Leipzig. It is a funny place, lots of beautiful empty place that cost more to do up than buying done up houses from owners that have gone bankrupt. Nice town centry, some big new businesses but still 20% unemployment. One for the long long term. Yields in twon centre are 7-8%, outside towncentre 10-12%.

If you look for agaencies on the net there is only one good one. go to www.immobilienscout24.de. It is unfortunately not in english.

Good luck

You can use the attached website to translate German into English. This is extremely useful when trying to understand German websites.

http://babelfish.altavista.com/tr

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Hi Sold in time,

I am also thinking about buying a block of flats in Leipzig or Dresden and am very interested to get some advice from you. I hope you don't mind asking a few questions?

Can I ask you ho much you paid for the block and what sort of yield you will get? Did you consider buying at auction? Did you consider buying a block that needed refurbishing?

Will you be renting the block out through an agent? Did you get a mortgage for the block? If so, who was the lender, and what rate did they give you, what are the repayment terms?

If you could pass on any tips, advice or anything you would have done differently I would much appreciate it.

Many thanks.

Tom

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Hi Sold in time,

I am also thinking about buying a block of flats in Leipzig or Dresden and am very interested to get some advice from you. I hope you don't mind asking a few questions?

Can I ask you ho much you paid for the block and what sort of yield you will get? Did you consider buying at auction? Did you consider buying a block that needed refurbishing?

Will you be renting the block out through an agent? Did you get a mortgage for the block? If so, who was the lender, and what rate did they give you, what are the repayment terms?

If you could pass on any tips, advice or anything you would have done differently I would much appreciate it.

Many thanks.

Tom

Tom send a PM and I can pass you on some details.

1. Leipzig property can yield 9% to 12%. Dresden is 7.5-9%

2. I would buy a block which start at 300K upto 600K, blocks give you more control and most of the time better yields.

3. I can get you into contact with a broker that provides finance. Lots will depend on your UK income. LTV of 75-80% is possible. I can also pas your details on to english speaking estate agents.

4. Repayment is most of the time 1 to 1.5% of the total loan amount. Rates for 10 year are 4.8% and 15 years 5.1%

5. I am using a local agent which charges 16 euros per property per month for management.

6. Most of the time it is best to buy a refurbished block from someone that has gone bust. The cost of refurbishing are most of the times too high. The ones that can be economically be updated are snapped up by local german property investors. For me the capital outlay is to much. I would rather borrow at the moment and make my money work through leveraging it.

Sold

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Tom send a PM and I can pass you on some details.

1. Leipzig property can yield 9% to 12%. Dresden is 7.5-9%

2. I would buy a block which start at 300K upto 600K, blocks give you more control and most of the time better yields.

3. I can get you into contact with a broker that provides finance. Lots will depend on your UK income. LTV of 75-80% is possible. I can also pas your details on to english speaking estate agents.

4. Repayment is most of the time 1 to 1.5% of the total loan amount. Rates for 10 year are 4.8% and 15 years 5.1%

5. I am using a local agent which charges 16 euros per property per month for management.

6. Most of the time it is best to buy a refurbished block from someone that has gone bust. The cost of refurbishing are most of the times too high. The ones that can be economically be updated are snapped up by local german property investors. For me the capital outlay is to much. I would rather borrow at the moment and make my money work through leveraging it.

Sold

I am flying to Leipzig at the end of the month and am trying to look at as many apartment blocks in the 500,000 Euro range as possible . I am also having a hell of a time sourcing property from the net. Any details of blocks for sale would be appreciated.

TIA :)

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I am flying to Leipzig at the end of the month and am trying to look at as many apartment blocks in the 500,000 Euro range as possible . I am also having a hell of a time sourcing property from the net. Any details of blocks for sale would be appreciated.

TIA :)

Hi LeFrak

We have just started selling blocks in Leipzig. Have a look at our website, www.berlin-capital.com, and get in touch if you want any help or advice.

Julian Power

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I am flying to Leipzig at the end of the month and am trying to look at as many apartment blocks in the 500,000 Euro range as possible . I am also having a hell of a time sourcing property from the net. Any details of blocks for sale would be appreciated.

TIA :)

Have you had any luck in Leipzig?

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Hi soldintime,

Tried PM you but as a new member I'm not allowed to. :(

I'm buying an apt block in Berlin at the moment (starting a rather daunting renovation soon),

but also beginning to look at Leipzig and possibly Dresden. Now, I know the Berlin market quite

well but am not very familiar with Sachsen yet. Just thought it would be great to exchange some

ideas & experiences.

I'm based in London but in Berlin quite often. Perhaps meeting up for a drink would be nice?

:P

Btw, I'm fluent in german so finding agents or properties is easy (although really good deals are

increasingly scarce), but it would be great to speak with someone who's also active in this

market.

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Hi soldintime,

Tried PM you but as a new member I'm not allowed to. :(

I'm buying an apt block in Berlin at the moment (starting a rather daunting renovation soon),

but also beginning to look at Leipzig and possibly Dresden. Now, I know the Berlin market quite

well but am not very familiar with Sachsen yet. Just thought it would be great to exchange some

ideas & experiences.

I'm based in London but in Berlin quite often. Perhaps meeting up for a drink would be nice?

:P

Btw, I'm fluent in german so finding agents or properties is easy (although really good deals are

increasingly scarce), but it would be great to speak with someone who's also active in this

market.

It is great you are fluent in German, I can reasonably speak German. I am based in Hove but will be away for a couple of months. I will PM you my contact details.

Dresden is already quite pricey. The only good yielders out there are the ones that have been flooded. I am still trying to get one in Dresden as the town is a tourist magnet and unemployment is quite low for eastern standards at 13%.

In east germany you will see that the larger cities like Leipzig, Dresden, Erfurt & Berlin start growing. This is due to employment opertunities coming back in the area. The smaller towns in the east are doomed, young people are leaving.

In Leipzig you can still find 9% yielders, however by careful there are a lot of developers out there doing up failed projects. This will push a lot of new rental appartments on the market at €4.50 per sqm. You will not see rental increases for a while as people can choose now to stay at nice renatl accomodation. Whatever you buy in Leipzig it needs to be up to a very good standard.

Sold

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I am looking at buying an apartment block in Leipzig.

I am fluent in German but would like to PM with anyone who has some experience in this market.

Interested to get to know good local estate agents and property management firms.

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Thanks Sold. Just made an offer on a second block in Berlin, hoping they accept (after refusing a previous offer at the asking price). After doing more research in Leipzig, I'm finding it a much riskier market than Berlin. Prices of renovated blocks in top areas are as expensive as Berlin. While most properties are much cheaper, these are almost always in less popular locations and, most importantly, unrenovated. After speaking to local agents, it becomes clear chances of letting properties that are not fully renovated are about zero - which is why most unrenovated blocks in Berlin are sold tenanted while all Leipzig ones are vacant. It's all fine buying cheaply, but to renovate a block one needs to count with 500-800 euro/m2 (ok, 500 is typically enough for rental purposes), so at least a 500k cash investment before being able to maybe find a tenant. The bad part is, unless in top locations, even renovated flats in Leipzig are not easy to let. And, since german banks won't touch vacant blocks and renovations, Leipzig's appeal for me is much lower than Berlin. In the same manner I was struck by the prices in cities like Gera... nice big town, and blocks of 10-20 flats being sold (mostly at auctions) at 5-10k euro. But, unless you renovate, they will probably fall apart in years time... and chances of letting are just not there, whether renovated or not. So much for buying cheap property.

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Thanks Sold. Just made an offer on a second block in Berlin, hoping they accept (after refusing a previous offer at the asking price). After doing more research in Leipzig, I'm finding it a much riskier market than Berlin. Prices of renovated blocks in top areas are as expensive as Berlin. While most properties are much cheaper, these are almost always in less popular locations and, most importantly, unrenovated. After speaking to local agents, it becomes clear chances of letting properties that are not fully renovated are about zero - which is why most unrenovated blocks in Berlin are sold tenanted while all Leipzig ones are vacant. It's all fine buying cheaply, but to renovate a block one needs to count with 500-800 euro/m2 (ok, 500 is typically enough for rental purposes), so at least a 500k cash investment before being able to maybe find a tenant. The bad part is, unless in top locations, even renovated flats in Leipzig are not easy to let. And, since german banks won't touch vacant blocks and renovations, Leipzig's appeal for me is much lower than Berlin. In the same manner I was struck by the prices in cities like Gera... nice big town, and blocks of 10-20 flats being sold (mostly at auctions) at 5-10k euro. But, unless you renovate, they will probably fall apart in years time... and chances of letting are just not there, whether renovated or not. So much for buying cheap property.

Did I understand you right ... a block of 10 flats for 5000 euros? Wow, I'd just buy it and sit on it ... unless there are rates or some other recurring costs to pay?

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Talking about Gera, how does this sound like: a small house (2 flats and a shop on the ground floor), out of which the shop and one flat are rented out with long term contracts, the last flat is currently empty for the last 3 months.

Currently the net annual yield is 8,50%. After letting the vacant flat it would jump to 11.5-12%.

Contrary to previous posts, renting out the one empty flat would not be that hard, one should just "adjust" his asking prices down a bit and voila!

This property, which I own, is currently for sale directy (not via a real estate agent) at EUR 69900.

Net annual yield (from the flat and the shop): EUR 5940.

Net annual yield optimized (after letting the empty flat at, say, 3,-/m2 instead the usual 4,-/m2, for filling it up quickly): EUR 8000 or 11,50%.

Sound interesting?

Send me a PM or post here for more details.

Greetings, David

DSC00004_1.jpg

post-6030-1159518374_thumb.jpg

Edited by Dud

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Thanks Sold. Just made an offer on a second block in Berlin, hoping they accept (after refusing a previous offer at the asking price). After doing more research in Leipzig, I'm finding it a much riskier market than Berlin. Prices of renovated blocks in top areas are as expensive as Berlin. While most properties are much cheaper, these are almost always in less popular locations and, most importantly, unrenovated. After speaking to local agents, it becomes clear chances of letting properties that are not fully renovated are about zero - which is why most unrenovated blocks in Berlin are sold tenanted while all Leipzig ones are vacant. It's all fine buying cheaply, but to renovate a block one needs to count with 500-800 euro/m2 (ok, 500 is typically enough for rental purposes), so at least a 500k cash investment before being able to maybe find a tenant. The bad part is, unless in top locations, even renovated flats in Leipzig are not easy to let. And, since german banks won't touch vacant blocks and renovations, Leipzig's appeal for me is much lower than Berlin. In the same manner I was struck by the prices in cities like Gera... nice big town, and blocks of 10-20 flats being sold (mostly at auctions) at 5-10k euro. But, unless you renovate, they will probably fall apart in years time... and chances of letting are just not there, whether renovated or not. So much for buying cheap property.

Prop77 It is good to see someone on the forum that has been to Leipzig. Last time I was there (august) I talked to a property developer in Leipzig. You are right he only touches property that is in a semi good condition. This way it can still be renovated and filled up with tenants and provide you a yield of 9%. And you are also right that only renovated blocks rent out well (4.2€ per sqm). Leipzig tenants can be picky. I bought my flats 2 of them 100% tenanted. I just has to find a tenant last month and i was surprised how quick it filled up again and I was able to raise the rent 4%.

Leipzig banks are all doom and gloom, when i showed them my financial model of 2% capital appreciation (inline with inflation) they thought I was optimistic.

In berlin yields of 8% can now only be found in Neukoln & wedding and some other areas in the east like lichterfelde. Unemployment in these areas is 30% and these house are not in to good condition. For my Leipzig properties I do not have to pay renovation cost, they are in immaculate condition.

Berlin has its fare share of empty properties as well. I do agree it is better in the long run but the bargains are gone. I am still hoping of one block of flats to go through in Neukoln. I expresed interest in April and now finally the court process is over and the bank can sell. Things are awefully slow.

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Here are just some facts about Leipzig:

* Siemens, Porsche & BMW have major factories in Leipzig

* Amazon just opened massive german warehouse in september 2006.

* DHL opens their european hub in 2008. In addition to Wilmington in the U.S. and Hong Kong in Asia, Leipzig/Halle will be the third major airfreight hub in the global DHL network. Thanks to Deutsche Post World Net and DHL investing 300 million euros in the location, about 10,000 direct and indirect jobs will be created by 2012.

* Leipzig has stopped shrinking since 1998. It just added another 4000 people in the last year taking it to 506372

* Unemployment is shrinking rapidly and is now 16.9% compare this to the 21% unemployment in Berlin (the most hyped German market). It still higher than the german average of 10.2% however for East germany it is pretty good.

* Leipzig is Europe’s cheapest city in 123rd position in the 2006 survey.

* In 2006, Leipzig/Halle Airport was one of Germany's fastest growing airports in both average cargo volume and average passenger volume. TUIfly has just started 17 routes from Leipzig with the aim to transport 700.000 passenger in 2007 from this airport.

Make up your own mind.

Edited by soldintime

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Here are just some facts about Leipzig:

* Siemens, Porsche & BMW have major factories in Leipzig

* Amazon just opened massive german warehouse in september 2006.

* DHL opens their european hub in 2008. In addition to Wilmington in the U.S. and Hong Kong in Asia, Leipzig/Halle will be the third major airfreight hub in the global DHL network. Thanks to Deutsche Post World Net and DHL investing 300 million euros in the location, about 10,000 direct and indirect jobs will be created by 2012.

* Leipzig has stopped shrinking since 1998. It just added another 4000 people in the last year taking it to 506372

* Unemployment is shrinking rapidly and is now 16.9% compare this to the 21% unemployment in Berlin (the most hyped German market). It still higher than the german average of 10.2% however for East germany it is pretty good.

* Leipzig is Europe’s cheapest city in 123rd position in the 2006 survey.

* In 2006, Leipzig/Halle Airport was one of Germany's fastest growing airports in both average cargo volume and average passenger volume. TUIfly has just started 17 routes from Leipzig with the aim to transport 700.000 passenger in 2007 from this airport.

Make up your own mind.

Do you have any contacts I could talk to, just for a modest investment say up to 100k euros. I like unusual stuff, for example a lettable warehouse with a bit of land in a run down area, but would consider an ordinary residential property.

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More good news as unemployment is rapidly going down.

http://news.bbc.co.uk/1/hi/business/6506203.stm

:rolleyes:

I've been active throughout the old Eastern states as a private investor and as a company. I mainly use an Anglo-German company based near Dresden. They've never let me down and their project manager is about as good as they get.

Try this site www.saxony-properties.com if you don't see what you're looking for on the site just call and ask them.

There are some terrific bargains to be had but you do need to tread carefully. Renovation is not cheap in Germany, their work is absolutely top notch and so are their wages - you get what you pay for. As an outsider doing this sort of work means you can very easily fall foul of German building regs. This is not something I would advise - it will work out more expensive in fines than it would have been to get an artisan in to do it for you.

There are countries you can cut corners and a blind eye would be turned - not so Germany - you will be held accountable and the law will take a very dim view of a money grabbing foreigner trying to make a quick buck at the expense of their safety or quality regs - you have been warned.

Hence my insistance on using Guenter (from saxony properties) as my project manager and buyer.

One more thing do not be tempted to scrimp on insurance. If a property is going to remain in your hands for 24 hours before you flip it - make sure you have some sort of indemnity insurance at least. It's sods law that the day you have the building legally at you disposal will be the day something is found buried or asbestos has been found - find an expert, check the prop and insure - again, you have been warned.

Do it the right way and you will have a wonderful experience in a truly beautiful part of the world.

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Lewis

Do you know much about an area called Radekow near the Polish border? If yes are you aware of anything in the pipeline that might boost the economy there?

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Lewis

Do you know much about an area called Radekow near the Polish border? If yes are you aware of anything in the pipeline that might boost the economy there?

Not anything that I have immediately at my fingertips, but I do know people who will most certainly be more aware than I of something going off locally.

But dogbox, I have been following you posting career carefully. You are not the sort of individual who would post anything on any forum which might queer your ability to take advantage of something before the world has worked it out for themselves - in short a well informed individual - respect where it's due.

SOOOOOO! Just what is it you would wish to share with us all but would rather test me to see what I know first, eh?

I will be in Dresden for most of next week. I have every intention of calling in to see my, all seeing, all hearing, all knowing, German mr fixit. If there is something you need to know specifically then ask away and I'll have him "Discover it" for us. He may not find it for me immediately, he has his own eggs to crack but our friendship and business trust has been jointly fruitful over the years and he will spare the time somehow to find out.

Over to you.

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Not anything that I have immediately at my fingertips, but I do know people who will most certainly be more aware than I of something going off locally.

But dogbox, I have been following you posting career carefully. You are not the sort of individual who would post anything on any forum which might queer your ability to take advantage of something before the world has worked it out for themselves - in short a well informed individual - respect where it's due.

SOOOOOO! Just what is it you would wish to share with us all but would rather test me to see what I know first, eh?

I will be in Dresden for most of next week. I have every intention of calling in to see my, all seeing, all hearing, all knowing, German mr fixit. If there is something you need to know specifically then ask away and I'll have him "Discover it" for us. He may not find it for me immediately, he has his own eggs to crack but our friendship and business trust has been jointly fruitful over the years and he will spare the time somehow to find out.

Over to you.

Im just inquisitive is all ;)

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I've been active throughout the old Eastern states as a private investor and as a company. I mainly use an Anglo-German company based near Dresden. They've never let me down and their project manager is about as good as they get.

Try this site www.saxony-properties.com if you don't see what you're looking for on the site just call and ask them.

There are some terrific bargains to be had but you do need to tread carefully. Renovation is not cheap in Germany, their work is absolutely top notch and so are their wages - you get what you pay for. As an outsider doing this sort of work means you can very easily fall foul of German building regs. This is not something I would advise - it will work out more expensive in fines than it would have been to get an artisan in to do it for you.

There are countries you can cut corners and a blind eye would be turned - not so Germany - you will be held accountable and the law will take a very dim view of a money grabbing foreigner trying to make a quick buck at the expense of their safety or quality regs - you have been warned.

Hence my insistance on using Guenter (from saxony properties) as my project manager and buyer.

One more thing do not be tempted to scrimp on insurance. If a property is going to remain in your hands for 24 hours before you flip it - make sure you have some sort of indemnity insurance at least. It's sods law that the day you have the building legally at you disposal will be the day something is found buried or asbestos has been found - find an expert, check the prop and insure - again, you have been warned.

Do it the right way and you will have a wonderful experience in a truly beautiful part of the world.

Hence the reason I bought fully tenanted property in good condition.

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