Creative Financing for Investing in the Netherlands

[Erwin Groenendijk]

Dear all,

Originally, I am from the Netherlands and for two years now living and working in the city of Barcelona in Spain. It is also here that I started investing in Real Estate investing. In this forum post, I would like to discuss the topic of Creative Financing for Investing in the Netherlands.

The reason for that is because in Barcelona there is a creative way of Fixing & Flipping a house without being the 'official' owner. This is done via a 'Contrato de Arras', meaning a down payment of 10-20% which gives you the right to do the rehab and sell within 6 months without officially needing to buy the property yourself (excluding all involving costs of the process of doing so, as e.g. notary costs, taxes etc.). Then, if things go well, you never own the property but you do get the profit as a contractor for selling it for the rehabbed price. This way, taxes are lower and with a relatively small amount of money you are able to Buy, Rehab, and Sell properties. Of course, the downside is that you need to be able to sell the property in 6 months, among some others.

Are there similar creative financing set ups in the Netherlands? Do you know/use particular smart ways of buying, rehabbing, or selling properties and would like to share? Tips for beginners or the tricks for more experienced investors?

Please share/comment! 

[Bas Land]

Hi Erwin, good question. I'm from The Netherlands as well. Full disclaimer: I don't own any investment real estate. I do own my primary property and I'm looking to invest, but obviously take my advice with a grain of salt as more experienced people might be better able to help you out.

Apart from the obvious financing with a bank mortgage or private money (onderhandse lening) I can think of two ways to finance property: crowdfunding and getting a personal loan. Crowdfunding is growing and more platforms are getting in the real estate space. The personal loan can get as high as 75k I believe, depending on income and other debt services. The interest rates are pretty good at 4.2%.

Regarding the flipping without owning I've not heard of that before. Also with our laws I can't see how that work. Probably the tax authority will see you as the investor/entrepreneur anyway you structure it, and tax you accordingly. But then again, I'm pretty inexperienced and trying to learn as well.

Good luck!