ADDRESS | UNITS | FLOOR SPACE |
|---|---|---|
BERLINER ALLEE 4, WANDLITZ | 5 | 430 m² |
PURCHASE DATE | SALE DATE | PURCHASE PRICE | SALE PRICE | REALIZED RETURN |
|---|---|---|---|---|
04/2006 | 05/2019 | EUR 160.000 | EUR 749.000 | 368% |
Past performance and statements regarding earnings are no guarantee of future results.
Realized return
BERLINER ALLEE 4, WANDLITZ | |
|---|---|
Units | 5 |
Floor Space | 430 m² |
Purchase Date | 04/2006 |
Sale Date | 05/2019 |
Purchase price | EUR 160.000 |
Sale Price | EUR 749.000 |
Realized Return | 368% |
Why we invested
The house in Berliner Allee Nr. 4 in Schönerlinde stands as our first significant investment project, undertaken without external partners.
While not particularly spectacular, it represents a crucial milestone that demonstrated our capabilities and was our personal “proof of concept” to our idea of real estate investing.
Soon after the fall of the Berlin Wall, it became evident that several Brandenburg towns bordering Berlin would experience significant appreciation as part of the city’s “outer belt.” One such town is Wandlitz, renowned as a retreat for the former GDR leadership.
Just a few meters beyond Berlin’s border lies the small town of Schönerlinde. Within a short drive, the large hospital complex in Berlin-Buch serves as a magnet for many medical professionals, for whom we aimed to provide new homes with this project.
Opportunities and Challenges
- At the time, public transportation connections were abysmal. The nearest S-Bahn station was a 15-minute walk away.
- Additionally, even after reunification, the village remained largely undeveloped.
- Furthermore, several old outbuildings had to be demolished, and the courtyard had to be repaved.
- The development of the location was uncertain and not without speculation. It was by no means guaranteed that the small village would attract the necessary tenants.
- Consequently, the initial square meter rents were around three euros. At the same time, in our early stages, we were not yet equipped with the financial resources we have today.
- This also ensured that it would be a long-term project, where gradual increases in value would have to be awaited rather than annual ones.
Results
Leveraging the low initial rents, we were able to negotiate favorable terms with tenants and implement the renovation of the exterior spaces and individual apartments in a phased manner.
This allowed us to continuously reinvest the ongoing rental income and essentially grow the property organically without the need for further equity or external financing. This approach enabled us to cultivate the necessary patience and composure to observe the developments in Buch and Wandlitz.
Thus, we continuously enhanced the property, culminating in the complete renovation of the facade, serving as the building’s calling card.
With this comprehensive refurbishment, we were able to sell the property, albeit after 12 years of patience, at a profit of over 350%.
While this initial project was situated in a price range below one million euros, it served as a catalyst for our firm, not least in terms of percentage return.
We gained the confidence to identify sound investment opportunities and learned valuable lessons in assessing the viability of a property’s location.The decision to focus on future projects in more attractive locations also stems from the lessons learned in this seemingly unassuming suburb.
The Schönerlinde project exemplifies our ability to identify undervalued assets, implement a patient and strategic investment approach, and capitalize on long-term value creation.
This success instilled confidence in our ability to find sound investments and underscored the importance of careful location assessment.
