Apartment Building Finance – Podcast
Apartment building finance: this episode explains key metrics, financing options and common mistakes, from the first residential acquisition to a portfolio.
Apartment building finance
Original recording in German.
Directly on this website – no registration or tracking.
What this episode covers
The apartment building is the favorite asset class of German real estate investors – and its financing is the decisive craft. The result explains the four key figures on which each financing depends: debt service coverage (DSCR), loan-to-value ratio (LTV), sustainable rent and property quality.
We show how to choose fixed-rate period, eradication and leverage for the holding strategy – and why the highest leverage is rarely the best. In addition: how additional borrowing and Mezzanine equity can be leveraged for portfolio building.
Key points
- The four key figures: DSCR, LTV, sustainable rental, property quality.
- Choose fixed-rate period and principal repayment to match the holding strategy.
- Why energy efficiency and Capex belong in every request today.
- equity leverage: from first MFH to portfolio.
- Typical errors in existing rents and renovation backlogs.
The bank view before the bank
The result recommends conservatively calculating DSCR and LTV of the target property – whoever does this negotiates on an equal footing and recognizes overpriced offers before the notary’s appointment. The sustainable rent is always evaluated, not the potential.
Key figures, structure and the equity lever are available in detail in the guide “Finance apartment building”.
Quick answers
How much equity do I need for a apartment building?
20–35 % of the purchase price plus ancillary costs – the real use of own funds can be reduced via additional borrowing or subordinated capital.
Which key figures does the bank check?
In particular, debt service coverage (DSCR), loan-to-value ratio (LTV), sustainable rent and condition and location of the property.
Is an MFH worthwhile despite increased interest rates?
The bill is more demanding, but continues to work – if purchase price, sustainable rent and structure fit together. Flat-rate responses are not a substitute for calculation.
Jürgen Kronawitter
Jürgen Kronawitter specialises in structured real estate finance. He helps property investors, developers and portfolio owners implement complex financing solutions. His work focuses on structuring and arranging senior loans, whole loans, mezzanine capital and bridge loans, as well as tailored financing for acquisitions, investment properties, developments and refinancing. By combining conventional bank lending with alternative capital sources, he develops financing structures for domestic and international property projects.
Jürgen Kronawitter on LinkedIn → More about the author