Irish property investor Jim Collins has spent most of his life buying, renovating and selling houses and apartments in Dublin. Money is good and he knows the knack of business. He has his own network of agents, lawyers, contractors and developers who pass him updates on deals he might be interested in. These are typically properties below market value, distressed sales, repossessions, bank REOs, foreclosures.
One day, after having a friend over for lunch, he decided to see if he could apply his expertise abroad. His friend jotted down some data on the fledgling real estate market in a small EU country he visited. This sounds like fun, and Jim decides to take a week off work and start traveling. That country was Bulgaria, and he landed in the Bulgarian capital, Sofia, on a warm Friday afternoon last September.
A week later, he already had some idea of where Lozenets and Vitosha are in the capital; also Varshets, Borovets and Bansko ski resorts, Sunny Beach and Kavarna on the Black Sea coast. He toured dozens of developments, meeting builders and brokers. He also visited my office and we discussed his plans to acquire distressed and below market value (bmv) real estate. He has found that the way bmv property is offered and sold here is very different. On the other hand, since the price is so cheap, he was eager to try it.
So I offer him some advice that also applies to anyone interested in exploring the real estate market in Bulgaria that is really worth exploring in these challenging times.
Contact a decent professional agent and tell him your story: what you’re looking for, your budget, buying and leasing or flipping experience, etc. If possible find someone who not only understands the local business culture but has international experience as well. Otherwise, you might end up speaking English but thinking Swedish (or Arabic).
Once you’re done, you don’t have to spend more domestically. Your local agent will send you exactly what you want, a pre-screened list of investment opportunities in the location of your choice. If he’s just spamming with whatever is on his/her desk, find another agent.
Once a juicy deal is on the radar screen, put it in a separate folder and try to get as much information as possible about it, location, infrastructure, etc. You should have at least 20 of these potential deals on this place before jumping back on the plane to visit.
At this point you need a local lawyer. Ask to see the supplier, and if they don’t speak your language, get an interpreter. This might sound like an unnecessary expense since your agent will be there to translate for you, but having an independent translator early in the relationship can be an asset. This should set you back no more than 50-60 euros for half a day.
Get the paperwork from the vendor and have it checked by a lawyer. Feel free to ask for a bilingual copy and let the other party bear the cost of the translation. Your lawyer must be fluent in English so he can tell you about any language differences. In any case, here you will find that only the Bulgarian version stands up in court.
If your local agent is not a bmv real estate specialist then you are not in great shape. Participating in the auction will not do you any good if you do not understand the language. Even if you do, you have to know the local real estate mafia, they know all the tricks on how to snag any sale that doesn’t go your way. Many experienced foreign investors find this to be a common feature that is prevalent in many different business cultures around the world.
Another common fact that you can rely on is that foreign buyers pay more, so your connections with locals are very important. Don’t be shy about pampering them, it will pay off. It helps if you can honestly tell them that you like to buy at normal market prices because you have the funds ready; you are an experienced investor with a proven track record. for reference.
Beginners don’t be lazy, do your own due diligence. If you go for value and manage to negotiate a good deal, you’ll be on your way to making a lot of money. You’ll be amazed at what comes out of the bushes. Buying below market price can get you an instant profit, without proper research and negotiation, you will never be able to secure a deposit. This is a buyer’s market and now is the time.
