I want a castle. Need a loan


Today we will talk about buying a castle. At first, the discussion started under the post 'how to save money on buying a castle', where I talked about a low-budget option: the purchase of castle ruins for reconstruction. And there I added at the end of the discussion 'I do not recommend buying ruins on credit.'




  The answer seems obvious: if you do not have, say, 50,000 euros, then you will not be able to afford the reconstruction. For orientation: the construction of a 5 * chateau hotel will cost an average of 15 million euros, and this is far from the limit.

The second argument lies in the non-material plane. Four years ago, I conducted surveys of dozens of castle owners: the first half: success stories, and the second: complete disappointment and bankruptcy. The sample is, of course, insufficient. And the reasons for (not) good luck are actually very, very many, I will tell you about them sometime. I then even deduced a complex formula for a successful project in castles.


  But there are a few at the very beginning: what determines the scenario of events. This is the relationship between the owner and the castle.


  When you get a call from a bank demanding to pay off a loan with interest, and you suddenly have problems: you lost your job, got sick, spent money on children's education, or just decided to relax in an exotic country - then your attitude to the castle will immediately deteriorate. It's all the castle's fault! Moreover, you will need to urgently look for money, you will go to earn them. And this is wrong. The castle should be your priority. This is a purchase for life, especially if it is 'just' ruins.


  The third reason lies in the nature of loans as such. You need to behave according to feng shui, friends. You can only borrow money when someone else is paying for you. If you buy a castle in good condition, you can immediately open a café, quest room, hostel, hold a wedding and recoup the loan. But it is very difficult to implement a start-up all year round in ruins. But it is possible! There is about this, please, think seriously!


  However, my answer to the question of why it is not worth buying ruins on credit will not be the same. And this is one:

Because you do not need to take a loan to buy real estate and get project financing from the bank


  What does project financing mean?


 Almost all developers do this. The bank becomes not a pawnbroker, but your partner. Together with banking experts, you draw up a business plan based on your proposal, where you estimate the implementation of the hotel project at, say, 5 million euros. After calculations, you understand that the first money will start coming in a year and a half, that is, from this moment you will begin to repay the loan.


  In the first stage: 100,000 euros you need to buy ruins with the land and another 300,000 for a project with a construction permit, a total of 400,000 euros. The first stage will last 18 months. All these 18 months you spend money but do not pay the bank, this is a 'frozen stage.


  Second stage: you have received a construction permit, and now you can start pre-selling shares in the project. For example, 10 of the 40 apartments decided to sell to investors, who can rent these rooms or live in the rooms when they want. From the money received from investors, you a) start paying off the loan for the purchase and construction permit, b) invest in marketing. At the same time, the bank finances the main part of the construction.


  The third stage: you can see that construction has been delayed (for example, you found an Amber room in the castle cellars), but the Bank insists on a refund. Then you announce the sale of 10 more rooms - but they are already in finished condition, plus an Amber story with an Amber room, so the apartments are more expensive.


  Fourth stage: the hotel is finished, you hire a management company that deals with the hotel. With half of the profit, you pay the bank's share for 10 years, and the rest of the money is yours.


  I repeat again: the bank should become your partner, not just a loan shark. And finding such a bank for a project in ancient ruins is very, very difficult, but possible. You understand that the management of the financial organization must be the same 'Castleman' or even a maniac, like you. He must be aware of the great mission of restoring the historical heritage entrusted to his company. He should be proud of what he did and feel like a noble. This is the kind of banker you will need.



  Now, do you know where to start looking for the castle? By searching for "your" banker.


  If you are interested in finding out how to find him, please contact us.