Practical case Mallorca: Exclusive villa in Port d'Andratx – Preserving the asset structure instead of using all capital
After the company sale, the entrepreneur had broadly spread assets from securities, shareholdings and liquid funds. Added to this were ongoing returns from investments and several rented properties in Germany.
At a glance
- Purchase price: 3.450.000 €
- Financing required: 2.070.000 €
- Equity: 2.008.500 €
Anonymised case figure · not a binding statement for other projects · §34i GewO
An exceptional home with a view of the Mediterranean
After selling his mid-sized company, an entrepreneur from North Rhine-Westphalia fulfilled a long-held dream together with his wife. They were not looking for a holiday property but for a high-quality centre of life on Mallorca. The decision fell on a modern villa above the natural harbour of Port d'Andratx – with generous terraces, an infinity pool and an unobstructable sea view.
Although sufficient assets were available, the purchase was not to be paid for entirely from own funds.
Initial situation
After the company sale, the entrepreneur had broadly spread assets from securities, shareholdings and liquid funds. Added to this were ongoing returns from investments and several rented properties in Germany.
The aim was to preserve the existing asset structure as unchanged as possible and yet build solid financing for the acquisition.
Financing overview
- Purchase price: 3.450.000 €
- Additional costs: 448.500 €
- Renovation and individual features: 180.000 €
- Total investment: 4.078.500 €
- Equity: 2.008.500 €
- Financing required: 2.070.000 €
The financing share corresponded to around 60 % of the purchase price.
The challenge
At first glance the villa could have been paid for entirely from own funds. However, this would have required extensive reshuffling of the assets and unnecessarily reduced long-term investments.
In addition, the property was to be adapted to personal wishes immediately after handover. Planned were a new outdoor kitchen, a photovoltaic system with battery storage, an intelligent building control system and the redesign of individual outdoor areas.
These investments were to be fully taken into account already before the purchase.
Analysis
The focus was not on whether financing was necessary but on which asset strategy was more sensible over the long term.
After a detailed review of the existing assets, it emerged that a balanced use of equity would preserve considerable financial flexibility. At the same time, enough liquidity remained available to be able to realise further investments independently of the purchase.
The planned modernisation and equipment measures were fully included in the overall calculation.
Financing solution
The financing was built at around 60 % of the purchase price.
The additional costs and a considerable part of the purchase price were borne from own funds. All planned modernisation and equipment measures too were financially planned in from the start, so no additional financing decisions were required after the transfer of ownership.
The remaining assets continued to be invested in a broadly diversified way.
Outcome
The villa could be taken over without time pressure and adapted to personal ideas immediately. Just a few months later, the property was fully modernised and ready to move into.
At the same time, the existing asset structure remained largely intact. The buyers had to sell neither shareholdings nor liquidate long-term investments.
What other buyers can learn
Even with high assets, property financing is not necessarily a sign of a lack of liquidity. Often it is rather about using capital sensibly, preserving assets and keeping financial flexibility for future decisions.
Frequently asked questions
Why do wealthy buyers finance a purchase at all?
Is modernisation sensible for high-quality properties too?
Does more equity have to be used for a luxury property?
Conclusion
Acquiring a villa in Port d'Andratx shows that property financing means far more than the mere raising of capital. In the upper market segment in particular, the long-term preservation of a well-considered asset structure is often central. Financing can be a deliberately chosen instrument here to secure liquidity, make investments plannable and realise the dream of life on Mallorca in an economically sensible way.
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To the case report →A similar situation in Spanien? Let's talk.
Every financing in Spanien is an individual case. In a free initial consultation I will tell you honestly what is feasible and which bank fits.
Book a free consultationAnonymised individual case, not a binding statement for other projects · Siegfried Perini, BAFA-notified for the cross-border activity of the owner Olga Nikushkina · §34i GewO · no tax or legal advice · no financing commitment; conditions depend on creditworthiness, loan-to-value and bank