All Forum Posts by: Jos Van der Sluijs

Do you have a specific location in mind?

Goodluck Kelvin, don't forget to enjoy the city!

REMAX isn't as big in the Netherlands as it is elsewhere so make sure you meet an agent that knows how the investment market works! Most of them I’ve met don’t know anything about investments.

Dear Nathan, I've send you a private note. 

Are there any investors from SF around here who could tell some more about this news article?

Seems to me they did a great deal. Would like to know the thoughts of some locals. $ 90k sounds like a good price but you probable need to spend a lot more on attorney fees. If I know Rich people (in The Netherlands) they would just keep going to court, just to bleed you dry on attorney fees and force you to sell cheap. How expensive could it get, even if you would win all cases?

Rich-SF-residents-get-a-shock-Someone-bought-their-street

Hello Thomas,

Congratulations on your first purchase. I’m an agent in Amsterdam specialized in investments. You might know this already but there are some strict local rules about renting out rooms. If there are more than 2 people living in a place there are different rules (family’s count as two people).

I’ve add the links to the city’s website below (It’s in Dutch) and I’ll try to explain.

Basically if you would like to make it 3 or 4 people/rooms you need a common area of at least 11 m2 (118 square feet) and it must be at least 3 meters (10 feet) wide. Next you need to have the contact and airborne sound insulation at least 47 dB.

If you would like to make it a 5 or more people/rooms there are even more rules.
You need to register it at the Chamber of Commerce, It’s only possible if there are less than 25% of others doing it in the same flat/building and it’s only possible if the part of the city the apartment is in hasn’t reached its’s maximum.

Most investors stop renting it out like this and only rent to couples, family’s or 2 people (friends).

https://www.amsterdam.nl/wonen-leefomgeving/wonen/bijzondere-situaties/woningdelen/

https://www.amsterdam.nl/veelgevraagd/?productid={B25BA8DF-4C52-42F7-A634-4B4F39309718}#case_%7BFDE94C47-65FE-4357-A22E-11F0C8F4B5D4%7D

...

Hi Ramysh,

I'm also in the Netherlands, but from Amsterdam, a completely different market.

I think you should always start with rehab costs and your ARV but I never use 70% ARV because it doesn't tell me much. It assumes you spend 20% of the ARV on rehab but I don't think that is the case, at least not most of the time. I always use hard numbers. Let's say I think ARV € 275.000 and renovations costs me € 60.000 I also like some profit so let's keep € 30.000 extra (you also have selling costs, but let's forget about those for now).

€ 275.000
€ 60.000
€ 30.000
€ 185.000

€ 275.000 / 70% = € 192.500 you just gave € 7.500 of your profit away. If something unexpected happens and your rehab cost are 10% extra you have another € 6.000 less profit. Leaving you only half of what you would like to get to even take the risk of investing. Most investors here are going for a 10% minimum profit.

The other way around is also possible. Let’s say you can get the ARV of € 275.000 but you only need some new paint and flooring so your rehab is only € 10.000 You would still love to get a € 30.000 profit so you can pay:

€ 275.000
€ 10.000
€ 30.000
€ 235.000

using only the 70% ARV you would miss out on the € 30.000 profit. Of course you could start with the negotiation at € 192.500 to get even more profit but stopping there would not be the best thing, assuming your rehab costs and ARV are accurate.

I would really invest in yourself and your team to make sure the rehab costs and the ARV are accurate. From there you take the amount of profit you need and a little extra for if you messed up the ARV or Rehab costs.
At auctions prices used to be around 80% of the free market value (normal selling price of the building in normal condition). Now days I see them go for 100% of the free market value. Investors put them straight back on the market hoping somebody will overpay a little making them a € 10.000 profit, but that’s no way to start you investment business.

So educate yourself in ARV and Rehab Costs in you market.

Jos

Dear William,

If you bring up a good deal there is always a way to get some percentage of ownership in the deal. Other than that I don’t see a lot of creative financing other than using private money. The best advice I can give is to find deals and present them to experienced investors in return for some small percentage. I see a lot of newbies enter the game like this starting with now money and getting something like 5-10% and use the profits for a next deal bringing in the deal and some money to work their way up to 25% of 33% sometimes 50% until they are experienced enough and have the cash for their first 100% ownership deal. It all starts with finding good deals.

Hi Joe,

There are some people on BP from the Netherlands (like samir and myself). The basics from BP are the same over here the rules (laws) are different do so you should get informed about them. There are no Dutch real estate forums around as far as I know, but if you read some of my previous posts you should get some idea. feel free the ask me any questions. Do you know to which city you will be going?

Dear Samir,

I didn't get any response on my pm so I assume you didn't have time yet to get in touch. Please contact me when you've got the time for it.