I live in a townhome with a two car garage that is below the front of the house (in a basement type setup).

After some rainy days, I noticed that there is moisture and leaking between where the drywall ends and the concrete part of the wall (which comes up about 3-4 feet) begins. This is on the front side of the townhome.

I believe the leaks are due to the previous owner not repairing the downspout in the front and it essentially shooting water straight into the ground, digging a hole in the dirt and allowing moisture to seep in easily.

I was wondering what I can use to patch the part of the wall where the drywall and concrete meet. Currently there is a paper tape like material (which is coming off.) and some sort of spackel. What is the best product I can use to seal this area, and what things do I have to watch out for while doing it?.