I had a “relapse” into my old asset class, so I’ll probably have to temporarily withdraw 100,000 from my portfolio. My core portfolio will be tapped for now and then replenished in 3–4 months through another transaction.
We seized the opportunity to acquire a “disaster property”—consisting of a front and rear building in Leipzig—for an unbelievably low price. 1.3 million for just under 1,500 m². Last week, we were busy kicking the junkies out. I’m doing this project with an acquaintance—we each own a 50% stake.
The next 12 months are going to be a lot of work, since all 24 apartments need to be renovated. There are also 2 commercial units. At least the roofs and the heating system are in good condition.
Key figures:
Purchase price: 1,300,000
Closing costs: 169,000
Renovation costs: 351,000
Total costs: 1,820,000
Equity: 220,000
Debt: 1,600,000
Monthly payment (4.2% interest, 1.5% principal): 7,600
Projected base rent per month 14,500
I’m really, really happy that this worked out. The cash flow will be very good, and so will the return on equity. We had the notary appointment last week, so it’s actually a done deal.
