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It’s not impossible for someone to have 30 apartments by the time they’re 40. It’s a matter of convincing mortgage companies to loan you money, which is what th

It’s not impossible for someone to have 30 apartments by the time they’re 40. It’s a matter of convincing mortgage companies to loan you money, which is what they want to do given it’s their job. I know several people who’ve done this 100% legitimately, the real question is how much equity they have

economicalidea 3y ago
It’s impossible to buy 30 apartments in Munich for normal people with normal salary. You need at least 40 million euros, more if you are not only buying in unattractive areas.
- ovi256 3y ago
  The above poster has explained how one can get loans for those 40 million euros.
  - economicalidea 3y ago
    Ah so I show up at the bank and tell them “Please give me 40 million so I can buy apartments and rent them out - oh and I also have no money or safety of my own so just hope that I will be able to pay it back” Good luck with that at a German bank.
    - phpnode 3y ago
      no bank would let you do that in the UK either. The way this typically works is that a bank will lend you ~75% of the purchase price on a Buy-to-Let mortgage, so you buy a £200k property with £50k down payment. This is achievable for normal people with good salaries, let's say they're earning £100k. The mortgage is likely interest only so the landlord can make approximately £10k/year from rent from that one property. The next year they buy another, their earnings are now £120k. It now only takes them a few months to save another £50k to buy their next property, and the more properties they own the faster it is to acquire the next one. After a few years of this let's say they have 10 properties in total. They are now earning £200k, which makes the bank's decision to lend them more money an easier one, even though they have £1.5m in mortgage debt already. If they already have 10 properties then it's not that much of a relative leap to get to 20, then 30. With 30 properties they're earning £400k a year and can finance a new property every 2 months. They do have £4.5m in mortgage debt that is not being paid off though, but they're making a bet on the value of those properties exceeding the purchase price by the time the balance of the mortgages becomes due 20 years from now. In the past that was a pretty safe bet. The risk of doing all of this is that the property market can slow down, rates can go up, values can fall, property maintenance can become a significant cost, bad tenants can ruin a property and wipe out several years earnings and the government can change tax rules that makes all of this far less profitable (as happened in the UK quite recently). But it's absolutely not impossible. About a decade ago I worked with a perfectly normal guy in his mid 50s who worked as an accountant in a small software company, he had 200 BTL mortgages! He just kept reinvesting the profits and buying more each month.
      - kbart 3y ago
        That's a nice theory, but it doesn't work like that in most EU countries where banks are reluctant to give you a loan even for the 2nd property, let alone for tens of it unless you have collaterals to cover the cost.
- rcxdude 3y ago
  The situation is a bit different if you tell the bank you are planning the rent it out, not pay for the mortgage yourself.
deleted 3y ago
[deleted]
Sakos 3y ago
In Germany?
- phpnode 3y ago
  In the uk. Do buy-to-let mortgages not exist in Germany?
  - saiya-jin 3y ago
    I am sure they do/did but this still doesn't match resulting reality. By financial swings he does, he has 1-2 mil euros of disposable cash, on top of that vast amount of flats. Judging by his age and career path, he had to amass most of it (80-90%) within less than a decade. No German bank is going to give you 100% mortgage (in fact 110-120% for taxes/fees/additional reconstruction) when you already have 10 properties mortgaged in exactly same way. You also don't build any cash reserve like that, owning properties is always more costly than financial projections make it so. At the end it doesn't matter, good for him (apart from everything that makes a man the man) but his vague background story as told simply ain't true, and folks were eating all that till I came along and thought about numbers for few seconds.
raverbashing 3y ago
You're assuming getting a mortgage (in the UK) is a click-click-approve process, but it is far from that Purchasing any property is a many-month endeavour with solicitors/banks etc
- phpnode 3y ago
  Yes it can take several months but it's also a well oiled process that's quite straightforward as long as you have the relevant paperwork ready to go and assuming the properties you want to buy are easily mortgageable (and you have a large enough deposit and a good credit rating)
- phil21 3y ago
  I don't know how it works in the UK, but in the US the types of people hustling properties in real estate are not using the same banks/financing an average person looking for a mortgage would. It seems from talking to small time real estate folks that you use these lenders (likely lie or stretch some truth to do so in many cases) to get your first 1 or 2 loans, then move on to specialized lenders. There are specialized firms w/ private capital that are happy to fund these midsize deal flow guys and finance them. Once you get a working relationship with a few such vendors it seems rather easy to get marginal deals done others would find impossible. I don't know if this simply doesn't exist in the UK at all - but I'd bet money that it does in some form. Since bankers and finance make their money off the points on deployed capital, especially the loan officer making commission on the deal flow, the incentives are aligned to make more loans vs. less. I think the hardest part of getting something like this going is the first 2 to 3 properties. After that and a few years of proven ability to manage cashflow here in the US your lending options open up exponentially both in number of lenders and the creative/exotic means of financing now available.

economicalidea 3y ago

It’s impossible to buy 30 apartments in Munich for normal people with normal salary. You need at least 40 million euros, more if you are not only buying in unattractive areas.

ovi256 3y ago
The above poster has explained how one can get loans for those 40 million euros.
- economicalidea 3y ago
  Ah so I show up at the bank and tell them “Please give me 40 million so I can buy apartments and rent them out - oh and I also have no money or safety of my own so just hope that I will be able to pay it back” Good luck with that at a German bank.
  - phpnode 3y ago
    no bank would let you do that in the UK either. The way this typically works is that a bank will lend you ~75% of the purchase price on a Buy-to-Let mortgage, so you buy a £200k property with £50k down payment. This is achievable for normal people with good salaries, let's say they're earning £100k. The mortgage is likely interest only so the landlord can make approximately £10k/year from rent from that one property. The next year they buy another, their earnings are now £120k. It now only takes them a few months to save another £50k to buy their next property, and the more properties they own the faster it is to acquire the next one. After a few years of this let's say they have 10 properties in total. They are now earning £200k, which makes the bank's decision to lend them more money an easier one, even though they have £1.5m in mortgage debt already. If they already have 10 properties then it's not that much of a relative leap to get to 20, then 30. With 30 properties they're earning £400k a year and can finance a new property every 2 months. They do have £4.5m in mortgage debt that is not being paid off though, but they're making a bet on the value of those properties exceeding the purchase price by the time the balance of the mortgages becomes due 20 years from now. In the past that was a pretty safe bet. The risk of doing all of this is that the property market can slow down, rates can go up, values can fall, property maintenance can become a significant cost, bad tenants can ruin a property and wipe out several years earnings and the government can change tax rules that makes all of this far less profitable (as happened in the UK quite recently). But it's absolutely not impossible. About a decade ago I worked with a perfectly normal guy in his mid 50s who worked as an accountant in a small software company, he had 200 BTL mortgages! He just kept reinvesting the profits and buying more each month.
    - kbart 3y ago
      That's a nice theory, but it doesn't work like that in most EU countries where banks are reluctant to give you a loan even for the 2nd property, let alone for tens of it unless you have collaterals to cover the cost.
rcxdude 3y ago
The situation is a bit different if you tell the bank you are planning the rent it out, not pay for the mortgage yourself.

deleted 3y ago

[deleted]

Sakos 3y ago

In Germany?

phpnode 3y ago
In the uk. Do buy-to-let mortgages not exist in Germany?
- saiya-jin 3y ago
  I am sure they do/did but this still doesn't match resulting reality. By financial swings he does, he has 1-2 mil euros of disposable cash, on top of that vast amount of flats. Judging by his age and career path, he had to amass most of it (80-90%) within less than a decade. No German bank is going to give you 100% mortgage (in fact 110-120% for taxes/fees/additional reconstruction) when you already have 10 properties mortgaged in exactly same way. You also don't build any cash reserve like that, owning properties is always more costly than financial projections make it so. At the end it doesn't matter, good for him (apart from everything that makes a man the man) but his vague background story as told simply ain't true, and folks were eating all that till I came along and thought about numbers for few seconds.

raverbashing 3y ago

You're assuming getting a mortgage (in the UK) is a click-click-approve process, but it is far from that Purchasing any property is a many-month endeavour with solicitors/banks etc

phpnode 3y ago
Yes it can take several months but it's also a well oiled process that's quite straightforward as long as you have the relevant paperwork ready to go and assuming the properties you want to buy are easily mortgageable (and you have a large enough deposit and a good credit rating)
phil21 3y ago
I don't know how it works in the UK, but in the US the types of people hustling properties in real estate are not using the same banks/financing an average person looking for a mortgage would. It seems from talking to small time real estate folks that you use these lenders (likely lie or stretch some truth to do so in many cases) to get your first 1 or 2 loans, then move on to specialized lenders. There are specialized firms w/ private capital that are happy to fund these midsize deal flow guys and finance them. Once you get a working relationship with a few such vendors it seems rather easy to get marginal deals done others would find impossible. I don't know if this simply doesn't exist in the UK at all - but I'd bet money that it does in some form. Since bankers and finance make their money off the points on deployed capital, especially the loan officer making commission on the deal flow, the incentives are aligned to make more loans vs. less. I think the hardest part of getting something like this going is the first 2 to 3 properties. After that and a few years of proven ability to manage cashflow here in the US your lending options open up exponentially both in number of lenders and the creative/exotic means of financing now available.