Updated: Check Point 4.-5. Disclosure: This reflects my experience of the Berlin Real Estate Auction Market, mainly with multi-tenant houses/apartment blocks. It applies for apartments and flats as well.
1. Financing Is Tricky And Hard To Find
its very hard to get financing for foreclosures deals. The best way is to buy the property with 100% cash and then finance. We will put you in contact with the right loan agents.
2. You Have To Put Down A Deposit
to be able to legitimately bid, you either have to
a) transfer 10% of the market value (determined by the court appointed appraiser) to the court house account or
b) present a bank check at the auction, testified by a German bank over the same amount, (Remember: therefore you need to open an account with a German bank, and transfer funds to the account). To just show up with cash is not possible and illegal for the court to accept.
3. Inside Property Inspection Is Not Possible
Please consider the fact that its highly unlikely to check the property from inside, in most cases you have to solely rely on the report made by a independent court appointed appraiser.
4. The Highest Bid Often Is Higher Than Market Price
This field of property investing is not a hidden niche anymore, we often experience fully booked court houses. With lots of bidders. The real deal, the bargain, you won’t find at the auctions anymore.
5. Paper Work And The Bidding Process Needs To Be Learnt By You
With a ratio of 30 checked properties versus 1 property bought (this is quite normal), you have to do a lot or research and paperwork. Most important call the property manager and ask about the renters, the other owners (if its a condominium) and the condition f the building.
If you don’t talk German yourself and if you have (yet) no understanding of the market and of the typical problems of buildings in Berlin this type of investment is nothing for you.