German entrepreneur buys a coastal villa

Felix (not his real name) is a 45‑year‑old entrepreneur from Munich who runs a medium‑sized engineering firm. After years of reinvesting profits back into his company, he finally decided it was time to purchase a second home where he could relax and host clients. The Costa del Sol held particular appeal because many of his customers from Germany and elsewhere enjoyed golfing and holidaying there. He identified a four-bedroom villa with sea views near Mijas priced at €800,000. Felix wanted to finance part of the purchase with a mortgage so that he could retain more liquidity in his business. However, being self-employed presented challenges. His income varied year to year, and Spanish lenders often scrutinise business owners more closely than salaried employees.

Felix’s first hurdle was understanding what Spanish banks would require from a self-employed applicant. He read forums and found contradictory advice: some said that entrepreneurs must have three years of audited accounts, while others claimed that only the last year’s profit mattered. He also worried that his income would appear irregular on paper because his salary was small relative to the dividends and distributions he took from the company. Felix needed a partner who could help him present his financial situation clearly and emphasise the strength of his business without overwhelming lenders with unnecessary detail.

Through a referral from his accountant, Felix contacted Zerodown. He completed the pre-check form, describing his role as owner-manager, his company’s turnover, and his anticipated property budget. Shortly after, he received a call from Tomas, a pre-qualification specialist who spoke fluent German and understood small-business finances. Tomas explained that Spanish banks typically ask self-employed applicants for two or three years of annual accounts, a profit-and-loss statement, tax returns, and evidence of personal income (such as dividends or distributions). Tomas also noted that banks prefer to see consistent or growing profits and stable cash reserves in the business.

Felix embarked on preparing his documentation. He provided the last three years of company accounts, including balance sheets, profit-and-loss statements, and notes from his accountant. He supplied personal tax returns and bank statements. Tomas reviewed these documents and recommended obtaining an accountant’s certificate summarising key metrics: annual turnover, net profit, and shareholder distributions. This summary would allow the bank to grasp the business’s strength without translating the entire set of accounts line by line. Zerodown arranged for certified translations of the most important sections. They also suggested Felix demonstrate personal liquidity by showing savings and investment statements.

While Felix compiled his financial file, he travelled to Mijas to view properties. The villa he liked was a modern house with floor-to-ceiling windows, a pool, and a small garden. It offered space for a home office and guest rooms for clients. After a second viewing, he negotiated a purchase price of €780,000 subject to finance. The agent required a reservation deposit, which Felix paid from his personal account. Zerodown provided a pre-qualification letter to reassure the seller that his mortgage application was in progress.

Zerodown introduced Felix’s case to a Spanish bank experienced in lending to self-employed applicants from Germany. The bank’s underwriters scrutinised the accounts and asked detailed questions: What proportion of the company’s revenue came from long-term contracts versus one-off projects? What was the outlook for the next two years? How much of Felix’s income came as salary versus dividends? Tomas helped Felix prepare an explanatory memo. It detailed the firm’s main clients, its diversified revenue streams, and plans for future growth. Felix emphasised that although his personal salary was modest, he had flexibility to increase it if needed.

After analysing the information, the bank issued an indicative term sheet. It proposed a mortgage covering a majority of the purchase price with a competitive fixed rate. The term sheet included a requirement for Felix to maintain life and property insurance and to submit updated accounts annually. Felix appreciated the transparency of these conditions. He compared this offer with a second term sheet from another bank, which offered a variable rate with lower initial payments but more uncertainty later. After discussion with Tomas and his financial adviser, Felix chose the fixed-rate option.

The next step involved valuation and underwriting. The bank appointed a surveyor to appraise the villa. The surveyor confirmed that the property was in good condition and valued it slightly above the purchase price. During underwriting, the bank requested a personal financial statement showing all of Felix’s assets and liabilities, including any mortgages or loans in Germany. Felix provided this, along with documentation of his company’s current projects. He also opened a Spanish bank account to ease the transfer of funds and to demonstrate commitment to managing the property locally.

After completing their review, the bank issued a binding mortgage offer. Felix reviewed the terms and conditions carefully. One clause required him to pledge the shares of his company as secondary security if his income declined significantly. Tomas negotiated with the bank to remove this clause, arguing that the property itself and Felix’s other assets provided sufficient security. The bank agreed, and the final offer was amended. Felix accepted the offer, satisfied that the terms would not hinder his business operations.

On completion day, Felix travelled to Spain. He met with the notary, accompanied by an English-speaking lawyer recommended by Zerodown. The bank transferred the mortgage funds to the seller, and Felix paid his deposit from personal savings. He signed the deeds, and the property was registered in his name. Felix walked through his new villa, imagining weekend barbecues and team retreats.

Felix’s experience underscored the value of working with an introducer. Without guidance, he might have struggled to present his entrepreneurial income convincingly and could have accepted onerous loan conditions. Zerodown’s team helped him prepare a coherent file, liaised with lenders who understood international business owners, and negotiated favourable terms. Felix now spends several weeks a year at his coastal villa, using it as both a personal retreat and a place to entertain clients and partners.

With the villa secured, Felix turned his attention to making it a functional second home and a hospitality venue for clients. He hired a local designer to furnish the house in a style that balanced modern minimalism with Andalusian warmth. The designer recommended suppliers in Marbella, saving Felix the hassle of importing furniture from Germany. He also enlisted a property manager to handle maintenance and to prepare the villa for visits by his family or clients. To comply with Spanish regulations, Felix registered the villa for occasional tourist rentals during months when he was not using it. The rental income, while modest, helped offset ongoing costs and provided a real-life test of the villa’s appeal to holidaymakers.

The mortgage required annual updates, so Felix established a process for sending his updated accounts to the bank each year. He planned his dividends and salary to show steady income, which kept the bank confident in his repayment ability. The relationship with his bank manager became part of his broader financial network, and he appreciated that he could call upon the manager for advice on other financial products. As his engineering business grew, Felix explored the idea of purchasing additional properties on the Costa del Sol or elsewhere in Europe, knowing that he now had a template for the documentation and preparation needed.

Felix also found that owning a villa in Spain brought unexpected benefits. Clients visiting his company’s headquarters in Germany expressed interest in visiting the villa for networking events. Felix hosted small seminars and retreats at the property, combining business discussions with leisure activities. These gatherings deepened client relationships and allowed him to showcase his commitment to quality and hospitality. Colleagues from Munich enjoyed escaping to the sunny coast, and Felix felt proud to offer them a taste of Mediterranean living.

Looking back, Felix noted that the process of obtaining the mortgage taught him to organise his finances more systematically. The requirement to produce clear accounts and a net worth statement prompted him to formalise aspects of his business record keeping. The experience also highlighted the importance of translation and professional guidance when dealing with cross-border transactions. As he relaxes by his pool in Mijas, Felix feels a sense of accomplishment. He has balanced entrepreneurship with personal well-being and now has a tangible reward for years of hard work.

As the second year approached, Felix’s confidence in managing cross-border finance grew. He scheduled annual meetings with the bank to review his mortgage terms and considered investing in energy-efficient upgrades, taking advantage of local incentives. He also explored collaborating with local engineers on joint ventures, linking his German expertise with Spanish innovation. Each new step reinforced his belief that thoughtful preparation and professional guidance could turn a sunny dream into a sustainable part of his business and personal life.