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  1. #1
    Join Date
    Feb 2007
    Location
    New Plymouth - good to be home!
    Posts
    21

    Default Off-the-plan in Bulgaria

    Hi Property People

    OK, so I've been trying to be patient and keep learning as much as possible, but then the mantra of 'Take Action' starts up again and I can't help but start looking at holes to throw my money into, speaking of which:

    If anyone could spare some time over the weekend, could you cast an eye over an investment opportunity which I peeked at and now have an eager sales-lad hounding me for a decision on. The website is here:

    http://www.obeliskinternationalinvestment.com/documents/alpine/

    He's also forwarded me a bit of literature on Bulgaria, in the form of:

    http://guides.obeliskinternationalinvestment.com/downloadreir/bulgaria

    password: rebu622jc (Password is case sensitive)

    and

    http://www.absoluteguideseries.com/download/bulgaria

    The password is: est37kdd3 (Password is case sensitive)

    The rental returns don't sound great (especially when you consider how seasonal these things are), but I'd be more interested in getting in and then selling on completion (projected as December) or as soon as I can shift it, to realise captial gain and get out of somewhere I'd not plan to buy & hold (not this early on in the PI career for sure).

    So with another impending call from the 'young salesman of the year' on Monday, can anyone suggest questions that would really lay this thing out on the table, and show it up for the crappy deal I'm sure it is?

    All thoughts welcome.
    Cheers
    The dr.
    Sometimes you have to seek forgiveness...not permission.

  2. #2
    Join Date
    Feb 2004
    Location
    Newcastle-under-Lyme
    Posts
    3,066

    Default

    Quote Originally Posted by dr_qwertie View Post
    The rental returns don't sound great (especially when you consider how seasonal these things are), but I'd be more interested in getting in and then selling on completion (projected as December) or as soon as I can shift it, to realise captial gain and get out of somewhere I'd not plan to buy & hold (not this early on in the PI career for sure).

    So with another impending call from the 'young salesman of the year' on Monday, can anyone suggest questions that would really lay this thing out on the table, and show it up for the crappy deal I'm sure it is?

    All thoughts welcome.
    All right then lets see if we can punch some holes...

    Firstly, as with almost any building project, the person who will make the major money out of this will be the developer. Likewise since it will be managed, you can bet on the management company taking less risks and making more money than you...

    Note these aren't reasons not to go for it if you think it is a good opportunity, but they are food for thought.

    Secondly, if I remember rightly there have been some scandals about people losing money in dodgy developments in Spain, and then not being able to pursue their claims because of dodgy contracts. I note that this is a Spanish company doing developments in Bulgaria, might be worth doing some digging.

    Thirdly, if you do go for it, I would want to look over that contract very very carefully, you are handing over a significant amount of cash (70% prior to completion) and you want that contract to be airtight.
    Quote Originally Posted by Obelisk
    The independent lawyer, recommended by Obelisk International to represent the buyer
    Is to me a warning sign, you want an independent lawyer, with experience of international property investment, not someone effectively appointed by the company.

    Things to look out for are get outs for the developers, I have heard of unscrupulous developers who have get out clauses in their contracts so that if significant capital gains occur they can get out of the contracts and resell the property at a higher price, using the original purchasers as an almost free source of finance...

    Fourthly, I'd want more information about the actual income and management costs etc, I know you don't intend to hold it, but you may find you have to (suppose the market dips rather than soars) and so you need to know how badly it will hurt in the worst case scenario.

    Fifthly, the information they give about the potential capital gains and profitability really ought to be ignored, you need to do your own due diligence, regardless of the spin they put on things. For starters, the comparison properties they give are irrelevant, since they give you no information about how many other developments there are (Since these will cut into your possible capital gains). That there are three other developments that are more pricey is good, but perhaps there are many which are cheaper as well... In any case, without knowledge of the quality and location of their development in comparison to the other developments mentioned you have no idea if you are comparing apples to apples or swines to pearls. Their conservative estimate of capital gains is 10% I would be surprised if this is really that conservative, and would do my own independent research.

    Sixthly, I don't know your financial position and goals so it is hard to comment, but you may need to also consider international borrowing and currency risks as well.

    Seventhly, you need to consider how if at all this meets up with your goals. Don't let your money burn a hole in your pocket just because you feel the need "to take action" my worst ever buy occurred because of precisely this need. Take sensible action, not impulsive action.

    Finally, don't let the pushy sales person pressure you, that they need to hard sell speaks volumes.

    as you can guess I don't think this is a great opportunity, and wouldn't take it myself, but whether it is a worthwhile speculation (since that is what it will be) depends on your position, your finances, and your goals.

    Cheers
    David

  3. #3
    Join Date
    Dec 2004
    Location
    Sydney, Australia
    Posts
    413

    Default

    Dr

    My thoughts are its best to start in a market you know first rather than a new market you know nothing about.

    Monid has made some good points here and I'd advise to stick to your original plan and look at Taranaki.

    I did stumble on something of real interest (excuse the pun) today and that was ANZ (UK) offering mortgages in the UK on NZ property in the currency of your choice but at the interest rate of that country(i.e UK mortgage on NZ Property at the UK interest rate!).

    I'll PM you the details as I am definitely looking into it!!!

    LK
    Last edited by LondonKiwi; 14-04-2007 at 10:27 AM.

  4. #4
    Join Date
    Oct 2004
    Location
    Auckland
    Posts
    16

    Default

    I was under the impression people are leaving Bulgaria in their thousands - after joining the EU maybe?
    Dickie

  5. #5
    Join Date
    Nov 2005
    Posts
    3,286

    Default

    Quote Originally Posted by dickie View Post
    I was under the impression people are leaving Bulgaria in their thousands - after joining the EU maybe?

    I don't know about that but I would not be too surprised if it were true. One of the main arguements against opening up the EU to East European ststes is that the citizens would flood west, from their 'poor' countries to the 'rich' western ones.

    But, to contradict myself a little here, the same arguement was used about certain 'poorer' western countries. As far as I know Germany and Denmark are not home to thousands of Portuguese or Sicilians. In fact from what we see on the media the reverse seems to be the case. Citizens of rich countries are moving to poor countries to take advantage of the weather , lifestyle and lower cost of living. The English are buying up villas in France and whole communities of Brits live on the Spanish Mediterranean coast permantly.

    My own opinion is that the EU should be more concerned about letting Turkey and Morocco join than more East European states.


    What has all this got to do with NZ property investment you ask? Search me!

    xris

  6. #6
    Join Date
    Feb 2007
    Location
    New Plymouth - good to be home!
    Posts
    21

    Default

    Quote Originally Posted by xris View Post
    What has all this got to do with NZ property investment you ask? Search me!
    Yeah OK - I felt that one coming when I pressed SUBMIT...but it's nice to broaden the scope of conversation now and then.

    Thanks all for the quick response (impressively thorough analysis Monid!), I'll write more when it's not 1 in the morning.
    Cheers
    The dr.
    Sometimes you have to seek forgiveness...not permission.

  7. #7
    Join Date
    Oct 2005
    Location
    Auckland, NZ.
    Posts
    619

    Default

    If you are looking at the newly developing ski resorts ie Bansko - then Numbers leaving due to EU membership are not relevant as your rental market is UK and German ski holidays.

    You should be researching easyjet and ryanair flight routes and frequency.

  8. #8
    Join Date
    Jan 2005
    Location
    Turkey/NZ
    Posts
    1,821

    Default

    Dr,

    I am based in a resort in Turkey and I would say that the two real estate markets wouldn't be a world apart.

    What I am seeing here this season is an oversupply of apartments and a stable supply of tourists/visitors/buyers at best. At worst, there may be decrease in visitor numbers (the usual target market for these types of developments) meaning the wrong type of dynamics for the investor expecting cap gains.

    IF, I wanted to invest here (which I don't as I have serious reservations on structural build quality), then it is getting close to name your price with cash strapped developers.

    Please research hard, as they are a crafty bunch in this part of the world

    All the best
    G

  9. #9
    Join Date
    Nov 2005
    Posts
    3,286

    Default

    Dr,

    I was talking about my ramblings, not your question.

    xris

  10. #10

    Default

    I heard the population is to drop 35% by 2050, and population is a key driver for housing prices.

    Interestingly the UK, France and Spain are the only populations to rise.

    I'll show you the article when you buy me the beer you promised .

    Other than that, Monid has it sewn up.

    TD (aka S)


 

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