Bulgaria

Re: Why Bulgaria?

Personal I think you are probably better off completing the purchase if you can not get you money back.

I think you would at least with a little bit of patience get all your money back before end of year and perhaps even a little profit. There are still plenty people buying out there.

Also just a question for everybody?

When people started buying apartments in Spanish resorts years ago could the Spanish afford them?

How strong was Spains economy?

Just questions not assumptions..
 
Re: Why Bulgaria?

I have bought a studio property in Bulgaria off plan in Dec 06. ust completing now. It is in St.Vlas, beachfront Garden of Eden development.

I must state I do not know an awful lot about the market there and have only recently taken an interest again. I am due to go to complete in next few weeks. Majority paid already.

I have paid for the property in cash which I had spare at the time. My original thinking was I had the money spare, didnt know a lot about the market, if the market grew then I could remortgage it on completion and use it to start a small portfolio out there. relatively small risk speculation I know... , main interests are here in Ireland in :a few buy to lets and a few one off houses I build and a few offplans at present.

I would point out that the fees/charges etc did seem high in agreement with some of the other posts. The property also seems expensive in retrospect at 1200e per square metre however I am relatively ok with that as it is a 5star complex hotel etc..very high standard and this was longterm investment..plus it would have cost me more to spend 2weeks in Bulgaria to research the market properly etc at the time and perhaps get some discount.

This logic made sense to me as in Ireland I had found at the time that anytime spent on negotiations etc led to being gazumped and you had actually lost more by waiting around than by paying the asking price initally instead of trying to get a 5% discount or more.. In growing market at 15% the price would have gone up the 5% by the time you closed anyway. I know this is not textbook investing but I simply did not have the time for negotiating on 5 or 6 properties at once.
Of course I did negotiate a bit and I did have a very good knowledge of the local prices so I knew I was not paying over the odds.

Overall,the strategy worked quite well and I now have built up considerable equity in the last 3 years although I'm more interested in the next 15 or so.

I am now at decision stage.. and have seen conflicting reports..

a)One I saw in Jan was that property prices where shooting up there.

b)On sites like this etc I have seen the warnings etc.

I have applied for a mortgage there just to see if I'll get it with Piraeus bank. Was considering a 2 bed property somewhere.

Should I leverage whats there already ..

1 studio(50K) existing
1 2 bed(100K) ne3w proposed property..

mortgage 100K = repayment of 7000 per year.. in anybodys opinion is there a chance of the market covering this little investment.

I would be happy with a break even result on the rent/mortgage ratio.
Where is the best place to get a regular rent of say even 4500K pa on the 2 bed. Thats assuming I get 2500K on the studio. I know this is a low yield but if I was doing this it would be for 5 to 10 years or longer. I should also point out would be quite happy to use the apartments for family etc as a longterm holiday apartment.

As an investor I believe in leverage however I haven't done it yet in Ireland as I had cash for deposits etc and was relatively happy to use it as I consider most of my of what I have done here to be longterm and I am not taking an income from my properties other than rental yield excess. 10-15 year plan. Deposits mainly came form new builds I sold.

All advice very welcome. Please try to stick to facts or experience.. dont want personal comments. If anybody has a strategy that might work out there I would welcome it.
 
Re: Why Bulgaria?

If I were you I would first of all check to see if your studio apartment has gone up in value since you bought it and if it has then at least it will make the decision to invest further easier. Try to sell your apartment through an estate agent at a price above what you paid for it and see how you get on.

It's highly likely that you won't be able to sell your apartment unless you sell it significantly less than what you paid for it.

Demand may have increased a little since the 1st of January but supply still far exceeds the demand. There's tons of stuff for sale in Vlas and Sunny Beach so it's difficult to sell any apartments unless they are off plan.
 
Re: Why Bulgaria?

Address are the biggest estate agency in Bulgaria. They have an office in Sunny Beach and they would all speak English as all people buying in Sunny Beach or St. Vlas are foreign. If you ring them they will give you some useful advice. Here's a link I found:

[broken link removed]
 
Re: Why Bulgaria?

Interesting response to this post. Posts seem to be divided between those that are sceptical, those that have already been burnt and those that like to stick their heads in the sand. Unfortunately IMO people are greedy and are looking for the soft money. They are not much different than those that invested in the Cork pyramid scheme. There is no soft money. Sellers are smooth talking and well polished and concentrate on singular positive aspects of investment in Bulgaria. Any market that offers you 100% appreciation, guaranteed (by whom!) returns, huge profits, etc. need to be looked at with extreme scepticism. If it looks too good to be true then it nearly always is.Also when borrowing in foreign countries all borrowers need to look at what is the attitude of the local banks to property. Follow their lead. IMO anyone with property there should be worried.
 
Re: Why Bulgaria?

Simply Joe:

Just to add that those who have invested in Irish property,Spanish property and US property in the last couple of years should also be worried too.
 
Re: Why Bulgaria?

Daddy said:
Simply Joe:

Just to add that those who have invested in Irish property,Spanish property and US property in the last couple of years should also be worried too.
Click to expand...

Along with those who invested in Bulgaria ?
 
Re: Why Bulgaria?

I will contact the agency and see what I can get for it. I am not optimistic.. will let everybody know the results on this thread..

Having spent more time reading other posts over the last week I do not see St.Vlas as a viable investment opportunity at present.

My options here as I see them now are:

1)Sell and reinvest elsewhere.(other Country or possibly Sofia/Varna)
2)Sell and perhaps buy bigger apartment for holiday home if I'm happy with the area when I see again in 4 weeks.
3)Keep and forget about for 5 years.

If anybody sees one option better than another please post.

These conculsions are made by reading posts and links form this site in the most. Thanks to everybody.
 
Re: Why Bulgaria?

It comes down to the maths at the end of the day. If the residue that is due on the apartment is more than you can get for it if you sell it, then you are actually better off walking away. If the opposite is the case, and you are sure that you can offload it on completion, then you have to complete and then sell it and get out with as much as you can of your original stake.

Not wanting to rub salt in a wound, but this calculation could have been done beforehand if you had gone outside the orbit of sales people and marketing companies. If you had found out the real sale value on the local market of the property before you bought, you just wouldn't have bought.

It might seem strange to many that people walk into these situations, but it happens all the time when ordinary people put themselves at the mercy of unscrupulous companies who just want your money and really couldn't care less about your interests. You are just cannon fodder, to be squeezed for the maximum and then cast aside as soon as you have signed on the dotted line. This kind of conscience-free marketing had its roots in parts of Spain, mostly around Alicante, and came to its pinnacle in the last few years in Bulgaria. The attitude to customers in Bulgaria was and is shocking; promise them anything that they want to hear and just take their money. Want three years rental guarantee? You got it, no problem. Want a 10% return? No problem. Want 50% capital appreciation? No problem. Roll up, roll up!
 
Re: Why Bulgaria?

If you've bought beach front properties in Bulgaria through an Irish agent then, quite simply put, you've paid much more than the going rate for them.

If the same sort of shenanigans ever happens here in Romania, and there is every indication it is about to, then I'll be shouting from the rooftops about it.

At the end of the day, sadly, it seems to me that greed rather than analysis holds sway in many recent incidences of irish overseas property purchases.
 
Re: Why Bulgaria?


I figure if I was you I would just walk away.

No point in allocating additional capital to a failed project. You are just gonna tie up this money whereas you can get it working for you now. You are not down that much and it would be prudent just to write it off as a loss and move onto the next project. Property, as an asset class, is getting hit in many countries but your loss is small in comparison to what other folks may experience.
 
Re: Why Bulgaria?

Hi Amarin,

Thanks for advice.

Have all but paid last 2000 euro only left.

Think you might have me mixed up with previous poster with 20k approx in.

I defininety think from point of view of investment at least the St.Vlas area is out for me.

Just now considering whether to keep or sell.

Have emiled agent so I'll fill you in next week
 
Re: Why Bulgaria?

Hi Sorry for the delay

Been busy with life etc in last 6 months

The story is


1) I have contacted the real estate agents and they have informed me that I will get approx 85-100 % of the value of the property. Not great I suppose but not an unmitigated disaster.

2) The property is completely finished to a very high degree with the hotel on site absolutely fantastic.

Backround:

On previous posts I have said I bought this for cash without seeing on recommendation of a sucessful friend, (was speculation). His sucess has not come through property development or investment though. I am fortunately succesful in property investment and any deal I ever done here made money.

The St Vlas investment is the first bad investment I have made and it is because I did not pay attention to fundaments as I always did in the past. Fortunately I have no mortgage here and overall I does not affect my porfolio. (except in terms of Opportuntity loss in capital). I am lucky I can hold this indefinitely or sell with any major conseqence but if this had been my first property investment I fear it might well have been my last.

Regardless of what happens to property prices there in the future 10-20 year etc it was still a bad investment in true investment terms.

For the purposes of this being an investment forum I have the following to say especailly to investors who are first time investors. BEWARE!!


Mistakes and Learnings:

1) This was my first oversees investment( have a lot of profitable experience in Ireland always based on fundatmentals and local knowledge). I took a chance ... in retrospect in terms of investment it was a bad investment and badly done on my part. I agree 100% with posters warning people of all off these heaviliy promoted types of investment in any country.

There is only one way to buy investment rental property..

a) Get out on the ground and work hard researching the market focusing on the real life agents or private sellers or owners/locals.
b) Investigate the rental market fully and be aware that guaranteed rental usually is built into the price.
c) Buy at a REAL( relative to real market) discount and ensure you have a strong rental market.
d) Never buy without visiting the country. I suggest you would first spend 2 weeks actually working for 5 full days on finding out all the aboves. Then return after a few months and then spend another week to two.

This is what I will be doing next time believe me. It could be a good time to goto Bulgaria to buy a holiday apartment buy finding distressed sellers and negiotiating hard if you are willing to put in the work.

2) Be aware of any TV or Trade show type "investments". they are excercises in marketing rather than anything to do with REAL property investment.

3) The company I bought from and others are still selling these new properties for 15% or more than what I payed for them!! Now here is the worring part!!! New build still being sale forcefully at hugely infated prices whilst bargins acn be picked up on the groud due to distresses sellers and trhere will more. Buying now you could be looking at real lossess of 35-45% in my opinion in next 3 years. BEWARE

4) Selling agents totlally over exaggerated the potential with excellent marketing which obviuosly fooled me.

Note:I have not included analysis of rentals here because this will be the first season starting from May 2008. I will update you when I know the facts and perhaps I may be even pleasently surprised, howver, no matter what happens I made basic mistakes here which I am readily willing to admit.

Hope this is helpful to nybody considering property purchases abroad.

Regards,

Paddy
 
Re: Why Bulgaria?

Hi Sorry for the delay

Been busy with life etc in last 6 months

The story is


1) I have contacted the real estate agents and they have informed me that I will get approx 85-100 % of the value of the property. Not great I suppose but not an unmitigated disaster.

2) The property is completely finished to a very high degree with the hotel on site absolutely fantastic.

Backround:

On previous posts I have said I bought this for cash without seeing on recommendation of a sucessful friend, (was speculation). His sucess has not come through property development or investment though. I am fortunately succesful in property investment and any deal I ever done here made money.

The St Vlas investment is the first bad investment I have made and it is because I did not pay attention to fundaments as I always did in the past. Fortunately I have no mortgage here and overall it does not affect my porfolio. (except in terms of Opportuntity loss in capital). I am lucky I can hold this indefinitely or sell with any major conseqence but if this had been my first property investment I fear it might well have been my last.

Regardless of what happens to property prices there in the future 10-20 year etc it was still a bad investment in true investment terms.

For the purposes of this being an investment forum I have the following to say especailly to investors who are first time investors. BEWARE!!


Mistakes and Learnings:

1) This was my first oversees investment( have a lot of profitable experience in Ireland always based on fundatmentals and local knowledge). I took a chance ... in retrospect in terms of investment it was a bad investment and badly done on my part. I agree 100% with posters warning people of all off these heaviliy promoted types of investment in any country.

There is only one way to buy investment rental property..

a) Get out on the ground and work hard researching the market focusing on the real life agents or private sellers or owners/locals.
b) Investigate the rental market fully and be aware that guaranteed rental usually is built into the price.
c) Buy at a REAL( relative to real market) discount and ensure you have a strong rental market.
d) Never buy without visiting the country. I suggest you would first spend 2 weeks actually working for 5 full days on finding out all the aboves. Then return after a few months and then spend another week to two. You must put in the hours.

This is what I will be doing next time believe me. It could be a good time to goto Bulgaria to buy a holiday apartment buy finding distressed sellers and negiotiating hard if you are willing to put in the work.

2) Be aware of any TV or Trade show type "investments". they are excercises in marketing rather than anything to do with REAL property investment.

3) The company I bought from and others are still selling these new properties for 15% or more than what I payed for them!! Now here is the worring part!!! New build still being sale forcefully at hugely infated prices whilst bargins can be picked up on the groud due to distresses sellers and there will be more. Buying now you could be looking at real lossess of 30-45% in my opinion in next 3 years. BEWARE

4) Selling agents totally over exaggerated the potential with excellent marketing which obviously fooled me. They also essentially lied about their commissions which were built into the property prices.

Note:I have not included analysis of rentals here because this will be the first season starting from May 2008. I will update you when I know the facts and perhaps I may be even pleasently surprised, however, no matter what happens I made basic mistakes here which I am readily willing to admit and I hope it helps others.

Hope this is helpful to nybody considering property purchases abroad.

Regards,

Paddy
 
Re: Why Bulgaria?

Paddy,

Respect for admitting you got the basics wrong, or rather didn't do the basics. Hopefuly, others will read and learn.

In today's economic climate I would be wary of investing in property anywhere, unless possibly you can find a genuine, motivated, distressed seller (i.e. desperate) in an established destination. Be patient; those who claim you risk missing the boat, wait for the next one - it may well be less crowded and give you a more comfortable journey.
 
Re: Why Bulgaria?

Hello Paddy,
Very helpful post! I hope your openness will help others to avoid this kind of expensive mistakes. Respect!
 
Re: Why Bulgaria?

POD:

Your studio cost 50k Dec 06. Down about 20%.

If you had invested in the stock market Dec 06 you would unless your very fortunate be down at least 20% also.

If you had invested in Ireland at a multiple of course of 50k you would be down probably 20%
of the full cost of the house.

If you had put your money on deposit you'd be losing close to nil taking inflation into a/c.

Latter is boring as many would tell you or advise you on AAM.

Message being d'ont despair with your BG purchase - as no one can tell the story in 5-10 years where any of the above investments will stand you.
 
Re: Why Bulgaria?

Urban Dev:

From my last post you can assume that other than taking the route of sticking the 50k into a boring savings account that all 3 options would currently stand as 'expensive' mistakes.
 
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