All Forum Posts by: Erwin Groenendijk

Hi @John Goldbranson, although perhaps not completely earning what you wanted, with making almost a 600k profit margin is something to be proud of. What was the timeline of the project if I may ask? And are you normally investing in this higher luxurious segment of the market and in Spain?

Cheers, 

Erwin

Investment Info:

Single-family residence fix & flip investment in Valencia.

Purchase price: $71,500
Cash invested: $45,000
Sale price: $160,000

Contributors:
Adrià Creixell

We bought this 70 m2 rooftop apartment in Valencia, Spain and we created two 35 m2 rooftop studios out of it. Amongst all the renovation works we also had to request a license to split the apartment into two studios. The initial buying price was 71,5K, our renovation cost around 35k, taxes and other costs 10k, making the complete project around 116,5k. In the end, we managed to sell both studios for 80k each, reaching a total selling price of 160k.

What made you interested in investing in this type of deal?

It was a rough diamond in a neighborhood outside the city center of Valencia. The 40 m2 rooftop made it the most interesting, as almost the whole year around the sun is out in Valencia. Outside life on a terrace takes on a whole different meaning living here, especially when it as spacious as with this Acacies apartment. The terrace is becoming the center of the apartment - people eat, relax, work, sunbath, lounge, invite friends over, practice yoga, you name it, in a space like this.

How did you find this deal and how did you negotiate it?

Via one of our trusted agents that we are working with the most in Valencia. As he is born in Valencia, he breathes and knows everything that is going on in the city. Although the idea to split the apartment into two studios was ambitious even to him, he was sure that if implemented successfully, there would be a market of interested buyers. In the end, we are selling both studios via him too. A win-win situation.

How did you finance this deal?

- The initial buying price of the apartment: 71,5k
- Paying the downpayment with our own money of around 7k
- Getting a mortgage accepted of around 50k
- Receiving all the other money from partners and investors

The interesting thing is that with a mortgage on the apartment and fundraising investor's money, we were with little to no of our own money in the deal. Who said that you always need to have all the money yourself?.....

How did you add value to the deal?

Splitting a 70 m2 rooftop apartment with 40 m2 of terrace in Valencia, Spain and creating 2 35 m2 rooftop studios with each 20 m2 of terrace out of it.

What was the outcome?

All in costs for the complete project is close to 120k and the selling price for both studios combined 160k, ending with 40k of profits.

Lessons learned? Challenges?

Like always, a lot! In this specific project, receiving the license from the municipality to officially split the apartment into two studios took longer than expected. We tried everything to get in between the municipality via our contacts to speed up to process, but nothing worked. When we finally did receive the license, we had problems with our contractor towards the end that led us to decide to stop working with that specific contractor and hire a different one in his place instead.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

If you ever decide to begin projects in Valencia, call us to redirect you or find out yourself to get a hold of the contacts of Simon. Being our agent, he has been one of the people that have proved to be most valuable for us to be working together with. Especially because we ourselves are living in Barcelona (4 hours from Valencia), and he was managing quite some time tasks in our name when we couldn't be there.

@Chiel Slinkman, exactly that was us. Anyways, good luck with your next steps and if you need any help feel free to ask us whatever you need. 

@Chiel Slinkman , no moved to Spain three years ago for work. Actually, it is here where I got the real estate interest and since then planning everything that I do around it. We are flipping apartments and since recently also buildings, our aim being to have one new project every month. Do you perhaps know other Dutch people that are investing internationally?

Would be nice to meet up in Holland the next time I am there and when there is a meet up organized by Geert. Send him my greetings if you talk to him. 

Hi @Chiel Slinkman, nice to have you on the BP community. 

You are on to the right things with your goals. Make sure to make contacts of use your already existing contacts to create a good project. Although it is more difficult in the hot market that we are, they are still out there. Perhaps listen to one of the last BP podcasts with J Scott was the guest, as they talk about having a strategy in the upcoming year where a possible dip could occur. 

Would love to help you with some insider tips, however, I moved from the Netherlands to Spain and I am active there in Barcelona and Valencia. Btw, I am also working in the IT sector. What I can advise you, though, is attending one of the meet ups already out there. Recently, I went to one hosted in Amsterdam by @Geert Schuring (not sure if the hyperlink is working). There you will get to know potential interesting contacts. 

Good luck and feel free to reach out at any time,

Erwin

@Darryl Felton @Nathan Currier-Groh, we are having some momentum in flipping projects in and around Barcelona & Valencia. For specific number, location, and legislation questions we can reach out to share experiences. Is there anything specific already on your mind that you would like to focus on? Any next steps planned out?

And what is your plan for the long term? Do this over and over again in Valencia? Don't know if you are living in the city, but, if you do, it would be nice to meet, exchange ideas, and to show each other the projects we are working on.

I'm sure you will do fine. Try to keep the costs of the rehab low and find a way to structure the deal in the right way. The first time is always challenging, just like we are experiencing always trying to do things better.

Erwin

@Jamil Azimov, where did you buy the property? In the city center of Valencia? And the plan is to flip it right?

Hi @Jamil Azimov, it for sure is possible to earn that profit flipping in the Ruzafa area. Like @Adrià Creixell is saying, it is essential to know what you are buying and have a team to work with. Do you have any experience in real estate in general?

@Patrick Daniel, that is a true example of long-distance investing buying deals. If you are ever in Spain, feel free to reach out!