4 tips for “cheap” real estate

How do you find the real bargain houses and apartments? 4 basics to get you started with real estate & investments.

Neighborhood: make it known you’re buying real estate

The local neighborhood is often the best place to start your real estate acquisition.

People around you should know about your interest in real estate investing!

Because only if they hear about it, they can automatically send you offers or recommend you to potential sellers.

One way to increase your presence in the neighborhood is to attend local events. At these, you can start conversations about real estate and share your intentions. In addition, social media can be helpful in spreading your message. Remember that building trust in the neighborhood takes time, but can be the basis for many successful businesses in the long run.

• The local neighborhood should be the first to know about your intentions
• If no one in your area knows you’re looking to invest in real estate, potential deals and referrals will pass you by
• Use local events, social media and word of mouth to communicate your interest in real estate

Address B2B contacts: Networking with professionals

Working with business partners can be extremely valuable to your real estate acquisition efforts.

These include professional brokers, tradesmen and property managers.

These players often have access to properties even before they appear on the public market.

To work successfuly with these professionals, you should offer superior incentives that motivate them to send you information about real estate listings. Partnerships or tipster commission can be an effective way to pique their interest. A good relationship with B2B contacts can give you access to exclusive properties and give you a competitive advantage.

• Search for B2B contacts such as professional brokers, craftsmen or property managers
• These contacts often have access to properties before they appear on the market
• Consider how you can be attractive to these contacts, such as through partnerships or referral fees

Direct contact with owners: Actively search for real estate

Sometimes it is necessary to actively search for properties and contact owners directly. This means that you proactively look for properties, whether in your area or in specific regions that are interesting for your investments.

Research carefully to locate owners and have professional conversations to get their interest. It’s important to build trust and be respectful, as this increases the chances that owners will work with you and offer you their properties. This direct approach requires patience and persistence, but can often lead to great deals.

• Actively search for properties and talk directly to the owners
• Do research in your area or areas of interest for your investments
• Be respectful and professional in your conversations to gain the trust of owners

Continuity: patience and consistency

Successful real estate acquisition requires not only commitment, but also patience and consistency. It is unlikely to become a millionaire overnight.

Take a long-term approach and continually work on your acquisition strategy.

Be authoritative and serious in your appearance to leave a positive impression. Set realistic expectations and be patient. Real estate acquisition can take some time before the first successes become apparent. Hang in there and stick to your goal – sooner or later you will be able to reap the rewards of your work and make successful real estate investments.

• Continuity is key. Build a long-term strategy
• Be authoritative and serious in your appearance to make a good impression
• Don’t lose patience – real estate acquisition requires time and preliminary work

4 Basics: Acquisition with a system

Property acquisition is a crucial step for real estate investors to find the best deals. A well-built real estate acquisition system can significantly impact the success of your investments. Remember to involve the local neighborhood, use B2B contacts, approach owners directly, and be continuous and patient. For more valuable insights and tips, check out my YouTube video on real estate acquisition basics.

Lukinski YouTube: Yield, Capital Investment & Co.

Discover with me the decisive factors, key figures and basics of real estate investment. Compared to other forms of investment, real estate offers a ‘safer’ way to invest capital with consistent returns and long-term appreciation. Want to invest your money wisely? My recommendation: Real estate, passive income and a good life.

• Lukinski YouTube

Why is the purchase contract so important?

When it comes to selling a condominium, a purchase agreement is crucial. The purchase contract formalizes the sale and sets out the terms and obligations for both parties. By signing the purchase agreement, both the buyer and the seller agree to the terms and conditions contained therein and are thus legally bound to abide by them.

Another important aspect of the purchase contract is the protection of the interests of both parties. The contract clearly defines what is expected from each party and ensures that the buyer receives the property in the condition and at the price as agreed in the contract.

• Legally binding
• Protection of interests
• Avoidance of misunderstandings
• Documentation of the sale

A sales contract also helps to avoid misunderstandings and ambiguities between the parties. It gives both parties clear instructions on what they have to do and what they can expect from the other party. In this way, potential problems can be identified and resolved in advance, before they lead to major conflicts.

Content of the purchase contract

The contract of sale of an apartment is an important legal contract that sets the conditions for the purchase and sale of an apartment. The contract regulates the rights and obligations of the buyer and seller and sets the conditions for the transfer of the apartment.

Here are some of the key points that may be included in a typical home purchase agreement:

• Name of seller & buyer
• Purchase price and payment terms
• Location & description of the apartment
• Apartment equipment details
• Loads and defects of the object
• Time of handing over the keys
• Warranty regulations
• Interest on late payments
• Special agreements

When you buy a condominium, you become part of the condominium owners’ association and thus have a say in important decisions affecting the common property.

To ensure that all aspects of the purchase of the apartment and the community of owners are clearly and legally binding, the following points are also included in the purchase agreement:

• Additional special property
• Existing special rights of use
• Common property incl. rights of use
• Community order
• Amount of the house money
• Amount of the maintenance reserve
• Current building plans & building description

Additional documents & papers

As a condo seller, you should be prepared for the fact that potential buyers may request to see certain documents.

These documents include, but are not limited to:

• Declaration of division
• Annual accounts
• Amount of the house money
• Amount of the maintenance reserve
• Resolutions of the homeowners’ association
• Community order

Let’s take a look at the respective documents, their content and task.

Declaration of division: division of ownership shares

The declaration of division is an important document that forms the basis for the purchase contract and sets out the rules and regulations for the community of owners. The exact division of the ownership shares is also regulated in the declaration of division.

Year-end statements: Income & expenses

The year-end statements list the expenses and income of the owners’ association. Here, the buyer can see how high the annual costs for the building are and how they are distributed among the individual residential units.

Amount of the house money: Community finances

The house charge is a monthly contribution that owners pay to finance the common property. The buyer should know the amount of the house charge in order to be able to estimate what financial burden will be placed on him.

Amount of maintenance reserve for repairs

The maintenance reserve is a financial reserve formed by the owners’ association to finance repairs and maintenance measures on the common property. The buyer should know the amount of the maintenance reserve and whether it is sufficient to finance upcoming repairs and maintenance measures.

Previous resolutions of the condominium owners’ association

The buyer should know what resolutions the community of owners has adopted in the past, as they may have an impact on future costs and obligations.

Community Rules: Rights & Duties of the WEG

The community rules set out the rights and obligations of the owners and the regulations governing the management and use of the common property. The buyer should check the community rules carefully to know which regulations apply to him.

That is why a preliminary purchase agreement is important

Under certain circumstances, it may also be worthwhile to agree a preliminary purchase contract. This is particularly worthwhile if you have found a suitable buyer, but the actual sale will still take some time. Through a preliminary purchase agreement, you can already make the sale binding and thus secure a buyer at an early stage without having to pay the purchase price immediately.

Preliminary purchase agreement secures buyer and seller

Notary appointment: This is the task of the notary

The notary plays an important role in both the preliminary purchase agreement and the purchase agreement itself. He is legally obligated to take into account the interests of both parties to the contract and to draft a legally sound contract.

The most important tasks of the notary at a glance:

• Drafting of the preliminary purchase agreement
• Registration in the land register
• Notarization of the final contract

Drafting of the preliminary purchase agreement

In the case of a preliminary purchase agreement, the notary will usually first prepare a draft contract that sets out the arrangements and agreements between the seller and the buyer. Then, all relevant documents are reviewed to ensure that the apartment is properly divided and described.

Registration in the land register

After the preliminary purchase agreement has been signed by both parties, the notary is also responsible for registering the preliminary agreement with the land registry in order to file a priority notice in the land register. This priority notice ensures that the buyer is entered in the land register as soon as the final purchase agreement is signed.

Notarization of the final contract

When drawing up the final purchase agreement, the notary assumes a similar role to that of drawing up the preliminary purchase agreement. He ensures that all legal aspects are taken into account, such as registration in the land register and payment of the purchase price. The notary also certifies the signatures of both contracting parties and ensures that the purchase agreement is entered in the land register.

Conclusion: contract of sale for the sale of apartments

In summary, the purchase contract is one of the most important aspects of the sale of a condominium. It sets out all the conditions and obligations associated with the purchase of the apartment and ensures that the sale is legally sound. In some cases, it is also worthwhile to draw up a preliminary purchase agreement, which will safeguard both you and the buyer. Allow yourself enough time to collect all the important documents and carefully review the purchase contract drawn up by the notary so that nothing stands in the way of the successful sale of your apartment.

Commercial test: Calculate purchase price

So, if you have found a property that you like, you should check it in advance. For this, you proceed in two steps:

1. Commercial examination
2. Technical test

To calculate the purchase price, you should write down all negative points in advance. You will need these not only for the purchase price calculation, but also for the later purchase price negotiations with the seller. These are the important, general points that come up in every commercial examination of a property.

Rental agreement, rent arrears and reduction

If you are purchasing an unrented property for your own use, these points are less important to you. However, if your property is still rented or if you want to purchase it as an investment, you should make a note not only of the deposit, but also of any special features and individual agreements in the rental contracts.

• Can all ongoing operating costs be apportioned to the tenants?
• Is there a deposit that has been agreed upon?
• What special features were agreed in the lease agreements?

Rent reductions and increases are also important for the commercial audit and should be noted for this purpose.

Non-apportionable operating costs: checklist

Some operating costs can be passed on to your tenants, but some cannot. In particular, costs for property management and maintenance, as well as depreciation, must always be borne by the landlord.

Are there any non-apportionable costs?

Here are a few examples:

• Costs for property management
• Maintenance costs
• Costs for repair
• Depreciation
• Reserves

In particular, renovation and refurbishment measures that serve to maintain the property cannot be passed on to the tenant.

Maintenance: Housing arrears & upcoming refurbishments

Maintenance is also an important criterion in the commercial audit. For this purpose, we recommend that you check the maintenance reserve on the basis of the last utility bill by asking for the last utility bill. Calculate a typical average of 1 euro +/- 20 cents per square meter. You will find upcoming renovation and modernization measures in the collection of resolutions.

So this is something you should definitely pay attention to:

• Amount of the maintenance reserve
• Amount of existing house money arrears
• Examination of the collection of resolutions

Checklist: Commercial audit

Here, once again summarized, the – typical – 11 test points in short form:

1. Can you pass on all current operating costs to your tenant(s)?
2. Has a deposit been agreed?
3. Are there any special features in the lease agreements?
4. Are there currently any outstanding rent arrears?
5. Are there any active rent abatements?
6. When were the last rent increases implemented?
7. How much rent could be achieved on new leases?
8. Do you expect to incur non-apportionable costs?
9. How much is the maintenance reserve of the WEG?
10. Are there any house money arrears of the WEG?
11. Have you reviewed the collection of resolutions?

Tip. Buying real estate: Learning from A-Z

Everything from A-Z: owner-occupancy or renting, financing a condominium, apartment search, real estate portals, brokers, valuation, purchase prices, negotiations and taxes. Knowledge and experience from experts, in one guide.

✓ A guidebook
✓ All facts
✓ Insider tips
✓ Purchase checklists

Learn step-by-step the home buying process and lots of insider tips!

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Broker’s license at a glance: Permission to conclude real estate contracts on a commercial basis

• Permission required for the conclusion of commercial contracts
• Issue of the permit only if the three conditions are met
• Requirements: Proof of the reliability of the applicant, of the orderly financial circumstances and of the clearance certificate of the tax office.

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