ADDRESS | UNITS | FLOOR SPACE |
|---|---|---|
WILDENBRUCHSTR. 46, BERLIN | 35 | 1993 m² |
PURCHASE DATE | SALE DATE | PURCHASE PRICE | SALE PRICE | REALIZED RETURN |
|---|---|---|---|---|
03/2013 | 09/2013 | EUR 2.000.000 | EUR 3.260.000 | 63% |
Past performance and statements regarding earnings are no guarantee of future results.
Realized return
WILDENBRUCHSTR. 46, BERLIN | |
|---|---|
Units | 35 |
Floor Space | 1993 m² |
Purchase Date | 03/2013 |
Sale Date | 09/2013 |
Purchase price | EUR 2.000.000 |
Sale Price | EUR 3.260.000 |
Realized Return | 63% |
Why we invested
The Wildenbruchstraße/Kiefholzstraße property investment stands as a compelling testament to the fact that achieving a 50% return on investment doesn’t necessitate an extravagant property.
This 1930s-era building is nestled within the vibrant “Kreuzkölln” district, where the trendy neighborhoods of Kreuzberg and Neukölln converge. Despite its somewhat unassuming appearance, the property’s proximity to the Spree River, the S-Bahn ring, and popular tourist attractions convinced us that its location far outweighed any initial shortcomings.
A consortium of Scandinavian private investors, eager to capitalize on Berlin’s burgeoning real estate market, possessed both the financial resources and the willingness to invest. However, the previous owners found managing the property from afar, without a deep understanding of the intricacies of the German market, to be far more challenging than anticipated.
While they had engaged a local Berlin-based property management company, the collaboration proved problematic, leading to their desire to divest from the investment. This presented an opportune moment for us.
Opportunities and challenges
- Our primary objectives were to subdivide the property into individual residential units and market them to capital investors. This involved creating 30 largely identical two-bedroom apartments.
- Additionally, we had to transform the attic floors into coveted shell spaces ripe for further development.
- Optimizing the profitability of the rented apartments was paramount to maximizing the sale price.
- To achieve success swiftly, we needed to navigate the bureaucratic hurdles of property conversion and the extensive formalities, ensuring that capital was not tied up for an extended period.
- Marketing the non-viewable apartments to investors across Germany under our then-unfamiliar name posed a significant obstacle.
- Moreover, tenant skepticism and apprehension regarding the sale demanded a delicate and sensitive approach.
A well-defined investment strategy and efficient execution were crucial for achieving the desired return on investment.
Results
While some investment projects present formidable challenges, the Wildenbruchstraße/Kiefholzstraße property proved to be a relatively smooth operation.
Building trust and rapport with the tenants was crucial to their satisfaction and cooperation. We achieved this through consistent, open communication and a commitment to delivering on our promises. In contrast to the previous management’s shortcomings, our approach was met with relief and appreciation from many tenants.
To further enhance the property’s value and attract potential buyers, we installed additional balconies, effectively increasing both rental income and overall return on investment.
This subsequent installation on the existing structure presented significant legal challenges and demanded considerable negotiation skills and assertiveness. Despite these obstacles, that endeavour was ultimately successful as well.
In 2012, we recognized the growing importance of digital marketing and created an in-house website to showcase the property. This website was then promoted through various popular real estate portals.
Our marketing strategy also emphasized transparency, providing potential investors with detailed information about the property and the investment opportunity.
While we engaged external partners to assist with the sales process, we ensured that they were well-equipped with comprehensive digital and analog marketing materials. This combination of transparency and effective marketing enabled us to sell the apartments and attic shell spaces within a short timeframe.
The Wildenbruchstraße/Kiefholzstraße property investment demonstrates the importance of fostering positive tenant relationships, embracing digital marketing strategies, and leveraging external partnerships.
By prioritizing transparency and open communication, we were able to secure tenant satisfaction, enhance property value, and achieve a successful sale of the property, ultimately delivering a substantial return on investment.
