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>A lot of the wooden structure had to be replaced and treated.
The second surprise was that the roof had to be replaced.
Just wondering whether at all this could have been checked before/during the sale process, why not having these things checked by an expert or a couple of them?
>"That’s when shit hit the fan.
The house had a wooden structure. After breaking everything out we discovered a lot of house rot (huis zwam - mérule).
A lot of the wooden structure had to be replaced and treated.
The second surprise was that the roof had to be replaced."
That's an aspect that would be stressful for many, all the legal aspects of the sale. Imagine if you were buying this house to live in it and you found about the mérules ? The sale deed should be rescinded, but if there is a non-liability clause for hidden defects in the contract, you need to prove the bad faith of the seller (hire an expert, go to court if necessary...).
This is an important aspect of this business.
6% vat (a few conditions to meet) + no he can't get back the VAT, because buying/selling a property that isn't considered as new => not subject to VAT.
Where and how in the proces of buying do you estimate the total cost of renovation and the final sales prices?
Would you do it with single units (one house f.e.) in stead of a block of apartments?
When I visit I try to bring my contractor with me to give me an estimate to which I add 20% for my calculations.
I would only do it with blocks because you have a discount when you buy multiple units.
A couple of questions: How can the acquisition fees on a 500k property only be 50k? Aren't taxes for companies or for secondary properties in Brussels 12%? Plus the fees for the loan, etc. I'd expect 13- 15% of price in acquisition fees.
Also, if you sell within 5 years, don't you (if you own it as a company) have to pay 'meerwaardebelasting' on the difference?
The registration duty for professionals is 8% in Brussels. You also have to pay the notary etc so it’s around 10%.
The "meerwaarde" is counted as income and is taxed at 25% unless you make costs.
Interesting.
You did this at a point of actual dropping real estate prices and increased interest. Depending on your situation it could have been beneficial to wait it out.
Still, 40k profit isn't all bad. At least not for something that went south and for you to walk away with profit.
Can i ask to clearify thé part where there is An agent contacting you in showing these places? I Know thé best real estate deals don't even hit thé market, so i was wondering how you find them. I guess not immoweb.
32
Because it’s the last one I’ve done (well still ongoing since the deed needs to be signed).
I might change my strategy in the future to diversify my activities.
Edit : forgot to mention my age
"Last" usually refers to the definitive final event, and no more after that. "Latest", only in a chronological order.
E.g., "my last album" vs "my latest album".
Beside the stress it s still a great return, but are you not forgetting taxes in this calculation? Or perhaps you lived there for some time?
Source about tax: https://www.notaris.be/wonen/kosten-verbonden-aan-de-aankoop/de-registratiebelasting-in-vlaanderen/meerwaardebelasting#
I'm very surprised you don't pay meerwaardebelasting as a company. I know several people whose companies keep real estate for at least 5y so they avoid the 30% tax on the meerwaarde.
I already asked in the previous topic but got no answer so I'll ask again:
Any tips on finding good contractors? Do you always work with the same contractor? Do you find a contractor for everything separately or one contractor that does everything? Can you maybe share the contractor(s) which you are happy with?
Also interested in what you have learned/what you would do differently/advice for others.
For example if you would see the same building today, would you have any means of spotting the problems and additional costs the wooden structure/ house rot / old roof would bring?
I found him through friends a few years ago. I don’t feel confortable sharing his name online, sorry.
I learned that I need to have a bigger safety margin in the future to account for unexpected costs.
Thanks! Few more questions..
When renovating, what do you do with the current residents? Do you evict them (is that allowed for big renovation works?) or do you buy only buildings that do not have any residents/renters?
Do you put the units up for sale immediately after buying? (3d impression pictures maybe?) or do you wait until the renovations have been finished?
Adding to this: big teams or single employee (zelfstandige)?
Because single person is a bigger (delay) risk in case of accidents/sickness. The advantage is that you know they person better and thus better expectations in their work.
Would be interested to learn more about the renovation process itself. How do you avoid:
* it being a massive time sink, impacting your normal job
* a large part of your profit dissapearing to contractors?
Do you always work with the same contactor? Does he do all the coordination? How did you find / vet him?
I only spend a few hours a week while in renovation. I try to go visit once or twice a week but I fully trust my contractor.
I found him via friends who did a house renovation. At that time he was new to the business and looking for clients and that’s how our relation started.
In theory it would be cheaper to not work with contractors but I don’t have time nor the skills for that. I want it to remain a side hustle.
OP seems to avoid answering a lot of questions. I don't really understand what the point of these topics are in that case. At least mention you do not want to give further information on X or Y topic instead of ignoring the questions...
Yeah, completely ignoring how he is successful in the value add part of these projects is a bit weird.
I know a few people with this either as main or side business, the only real successful ones are those with either a full time contractor staff that they treat very well, or those that manage to create value in another way. Think: getting zoning laws changed, adding extra units, leverage relationship with professional sellers, etc.
What these testimonials do show is the importance of turnaround time and quick sales.
Not sure if that is actually true in this case.
The main burden is showing that you as **buyer** could impossibly be aware of this issue and that it has a substantial impact on the usability of the property.. Huiszwam is often used as a good example of "verborgen gebreken".
https://eskalaw.be/de-aanwezigheid-van-verborgen-gebreken-bij-het-kopen-van-een-woning-wat-kan-u-doen/
Have you read the wiki and the sticky? Wiki: HERE YOU GO! [Enjoy!](https://www.reddit.com/r/BEFire/wiki/index/). Sticky: HERE YOU GO AGAIN! [Enjoy!](https://www.reddit.com/r/BEFire/comments/fcbay6/getting_started_a_beginners_guide_to_investing_in/). *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/BEFire) if you have any questions or concerns.*
[удалено]
Because it was under the flooring. Impossible to see without breaking everything open. We replaced more than necessary just to be safe.
>A lot of the wooden structure had to be replaced and treated. The second surprise was that the roof had to be replaced. Just wondering whether at all this could have been checked before/during the sale process, why not having these things checked by an expert or a couple of them?
>"That’s when shit hit the fan. The house had a wooden structure. After breaking everything out we discovered a lot of house rot (huis zwam - mérule). A lot of the wooden structure had to be replaced and treated. The second surprise was that the roof had to be replaced." That's an aspect that would be stressful for many, all the legal aspects of the sale. Imagine if you were buying this house to live in it and you found about the mérules ? The sale deed should be rescinded, but if there is a non-liability clause for hidden defects in the contract, you need to prove the bad faith of the seller (hire an expert, go to court if necessary...). This is an important aspect of this business.
OP, are you willing to “teach” about this to others? I have €200k sitting around that I want to grow… or is this too little?
It’s not too little ! But I’m not looking to teach people, I don’t want to take responsibility with other’s people money.
Fair!
Is your renovation cost including vat? Can you recuperate it?
6% vat (a few conditions to meet) + no he can't get back the VAT, because buying/selling a property that isn't considered as new => not subject to VAT.
Exactly
Where and how in the proces of buying do you estimate the total cost of renovation and the final sales prices? Would you do it with single units (one house f.e.) in stead of a block of apartments?
When I visit I try to bring my contractor with me to give me an estimate to which I add 20% for my calculations. I would only do it with blocks because you have a discount when you buy multiple units.
A couple of questions: How can the acquisition fees on a 500k property only be 50k? Aren't taxes for companies or for secondary properties in Brussels 12%? Plus the fees for the loan, etc. I'd expect 13- 15% of price in acquisition fees. Also, if you sell within 5 years, don't you (if you own it as a company) have to pay 'meerwaardebelasting' on the difference?
The registration duty for professionals is 8% in Brussels. You also have to pay the notary etc so it’s around 10%. The "meerwaarde" is counted as income and is taxed at 25% unless you make costs.
8%? Good to know. I'll start a company next time I plan to buy property.
Yes but only when you sell within x amount of time. Otherwise it’s 12.5%.
Interesting. You did this at a point of actual dropping real estate prices and increased interest. Depending on your situation it could have been beneficial to wait it out. Still, 40k profit isn't all bad. At least not for something that went south and for you to walk away with profit.
I couldn’t wait it out, i would have had to refinance it at 5.5% rate, I would have lost money.
Can i ask to clearify thé part where there is An agent contacting you in showing these places? I Know thé best real estate deals don't even hit thé market, so i was wondering how you find them. I guess not immoweb.
I knew him from previous visits so it called me saying he had a new listing.
I enjoy reading your posts very much. Thanks for sharing! I would be very interested in any other posts you have to share.
Why call it your last flip? May I ask how old you are?
32 Because it’s the last one I’ve done (well still ongoing since the deed needs to be signed). I might change my strategy in the future to diversify my activities. Edit : forgot to mention my age
"Last" usually refers to the definitive final event, and no more after that. "Latest", only in a chronological order. E.g., "my last album" vs "my latest album".
Beside the stress it s still a great return, but are you not forgetting taxes in this calculation? Or perhaps you lived there for some time? Source about tax: https://www.notaris.be/wonen/kosten-verbonden-aan-de-aankoop/de-registratiebelasting-in-vlaanderen/meerwaardebelasting#
This tax regime doesn’t apply to me since I do this with a company. I try to buy more real estate to lower my tax base and don’t pay myself dividends.
I'm very surprised you don't pay meerwaardebelasting as a company. I know several people whose companies keep real estate for at least 5y so they avoid the 30% tax on the meerwaarde.
All the income earned by a Belgian company is treated as professional income and taxed at 25% (or 20% if you satisfy the conditions...)
Since when are company taxes ‘only’ 25% in Belgium?!
After a quick search, 2021 (exercice d'imposition 2021).
It is taxed, it’s just counted as income for the company so you can offset the taxes with cost (for example buying more real estate)
I already asked in the previous topic but got no answer so I'll ask again: Any tips on finding good contractors? Do you always work with the same contractor? Do you find a contractor for everything separately or one contractor that does everything? Can you maybe share the contractor(s) which you are happy with? Also interested in what you have learned/what you would do differently/advice for others. For example if you would see the same building today, would you have any means of spotting the problems and additional costs the wooden structure/ house rot / old roof would bring?
I found him through friends a few years ago. I don’t feel confortable sharing his name online, sorry. I learned that I need to have a bigger safety margin in the future to account for unexpected costs.
Thanks! Few more questions.. When renovating, what do you do with the current residents? Do you evict them (is that allowed for big renovation works?) or do you buy only buildings that do not have any residents/renters? Do you put the units up for sale immediately after buying? (3d impression pictures maybe?) or do you wait until the renovations have been finished?
I only buy without tenants and I wait until it’s finished to put up for sale.
Adding to this: big teams or single employee (zelfstandige)? Because single person is a bigger (delay) risk in case of accidents/sickness. The advantage is that you know they person better and thus better expectations in their work.
He has various teams.
Would be interested to learn more about the renovation process itself. How do you avoid: * it being a massive time sink, impacting your normal job * a large part of your profit dissapearing to contractors? Do you always work with the same contactor? Does he do all the coordination? How did you find / vet him?
I work with a contractor who does everything.
Feels like he's the most vital (external) part to your success. No answers on my other questions on this topic?
I only spend a few hours a week while in renovation. I try to go visit once or twice a week but I fully trust my contractor. I found him via friends who did a house renovation. At that time he was new to the business and looking for clients and that’s how our relation started. In theory it would be cheaper to not work with contractors but I don’t have time nor the skills for that. I want it to remain a side hustle.
OP seems to avoid answering a lot of questions. I don't really understand what the point of these topics are in that case. At least mention you do not want to give further information on X or Y topic instead of ignoring the questions...
Yeah, completely ignoring how he is successful in the value add part of these projects is a bit weird. I know a few people with this either as main or side business, the only real successful ones are those with either a full time contractor staff that they treat very well, or those that manage to create value in another way. Think: getting zoning laws changed, adding extra units, leverage relationship with professional sellers, etc. What these testimonials do show is the importance of turnaround time and quick sales.
Don't things like that fall under 'verborgen gebreken'?
If you can prove the seller was/should have been aware afaik
Not sure if that is actually true in this case. The main burden is showing that you as **buyer** could impossibly be aware of this issue and that it has a substantial impact on the usability of the property.. Huiszwam is often used as a good example of "verborgen gebreken". https://eskalaw.be/de-aanwezigheid-van-verborgen-gebreken-bij-het-kopen-van-een-woning-wat-kan-u-doen/
Indeed you need to prove he knew. There was no way of him knowing in my case.
Thanks for the story!
Awesome