By Robin Bowman

I've got a few things I want to get across.

Well, three, actually.

Let's start with Krakow and the current Sunny Hill deal. There are a lot of reasons why this is a strong deal, but there are two outstanding ones.

First, there's the price of these units and second there's the fact that Krakow is in Poland and the Polish property investor market just got 1000 per cent more exciting.

Why?

Because in just a few short weeks we're going to see emerge the first re-finance product for overseas investors.

Let me tell you about the finance product first - because, as I say, this is what is going to make Poland - already a hugely attractive market - become almost irresistible to any serious property investor.

If you turn off whenever you think you're hearing marketing hype and sales patter, I'm right with you.

But, let me assure you, this is nothing of the sort. If you read anything about Poland this year - please read this because it will change your strategy at a stroke.

Let me ask you a question and, I assure you, this is not a test to see whether you've read and digested Portfolio Property Secrets! Incidentally, you can do just that by clicking here.

Let me ask you this - how did the property investment pros in the UK and other highly developed markets build vast and hugely profitable portfolios?

Were they brilliant strategists, canny bargain hunters, careful cashflow calculators?

Secret of success

Well, possibly they were all these. But they did something else that is at the very core of property investing and why as an asset class it is a clear leader.

The big secret of success?

Ready?

They re-financed.

Simple, isn't it. And yet, amid all the dazzling property price growth we've seen already in CEE markets, what we haven't seen - up to now - is the means to re-finance.

By this I mean simply that once your investment property has gone up in value, you re-mortgage to release some or all of the increase in value in order to reinvest elsewhere - and you then do this again and again. You get the picture, I'm sure.

The beauty of refinancing - just in case you're not aware - is that it releases profits for reinvestment BUT it does not trigger a capital gain, so you don't pay tax on the released profits. Truly an investor's dream!

Now, if you think I sound excited by the fact that this device will be available to overseas investors in an attractive form within the Polish market within around one month, then, well, you're right. I AM excited.

Not only does it mean that the Polish property investment market will allow you to build a vast portfolio if you want to, but that you can do so - after the initial outlay on your first property - with other people's money!

This development really marks how sophisticated the Polish real estate market is becoming. It's really what I call a coming of age.

The key now to investing in Poland, which, let's face it, has seen several years of phenomenal growth, is to search for under-value investments. If you combine these - wherever you may find them - with the ability to re-finance, then you have a hell of an attractive market.

Sunny Hill

And this brings me to Sunny Hill. I want to talk about this deal because it actually demonstrates perfectly what I'm talking about.

The secret, as I've said, is to hunt for value - or below market price deals.

You can do this in one of two ways in Poland.

First, you can go into markets that are basically second tier cities - like Wroclaw, Poznan, Lodz and Katowice. Here you are going to be riding the wave of early and very fast growth. In some cases, like Poznan, growth hasn't really taken off to anything like its full potential yet.

Second, you go where there has already been excellent growth, markets that are still growing fast but that are well-established and very secure - like Krakow or Warsaw. And you look for individual pockets where you may, if you look hard and you're lucky, find great value.

Sunny Hill is just such a deal.

You don't go crashing into a market like Krakow's and snap up anything that moves. If you did that, there's a good chance you'd get stung. No, you look carefully for real value.

It's getting harder to find this, but it is possible. There's no over supply in any parts of this market - developments still sell out in a day. But you must look for under-valued deals.

In Sunny Hill we found one - units priced at PLN 6,500 psm that our research tells us have a market value of PLN 7,000.

Now, this is a hot, hot market and yet what we have here is a deal that is under-priced PLUS will offer the option of re-financing from day one of completion.

That, to me, is pretty unbeatable. If you want to get another opinion on the details of Sunny Hill, I'd urge you to read the interview with our Polish property market expert, Robert Chojnacki - as well as read our Investment Report.

PS strategy

Now, I just want to touch on something a bit more strategic, if I may.

I'm often asked where Property Secrets will be going next with our deals and why we aren't in certain markets. Let me, briefly at least, fill you in on how I see things developing.

I'm shortly off to Sofia, where I continue to look for opportunities, and I'll talk more about that in the near future.

Meanwhile, let me spell out why I see Poland and Romania as the backbone markets of the Property Secrets operation. Of course, we'll continue to offer selected deals in other markets, but selectively.

Take the Czech Republic and Slovakia. I see these markets as like Krakow and Warsaw - there are good investments, if you know what you are doing.

But we expect the Czech market to offer the better finance (and shortly a re-finance option). I like Bratislava, too - but we are still waiting for the better finance offers.

Poland, though, as I've explained above, is becoming a very sophisticated market that offers all things to all types of investor.

The fact that you have blue-chip markets such as Warsaw and Krakow, and the Tri City area, and then you have second tier markets that are only now starting to boom, plus excellent finance (and now the re-finance) means that this market is simply outstanding.

Another reason is this - and I'll be blunt here - we're spent a lot of time and money researching this market and building contacts and expertise within it. This has made us the leading lights here and we don't intend to let that lead we've established fade.

I see Romania offering essentially the same opportunities as Poland, but it's less developed as a market, so at an early stage of growth. It's perceived as more risky than Poland, I believe, but that is also its attraction.

The reason I say this is that it simply isn't more risky and so offers the investor the opportunity to get in way before others realise this and the market really takes off.

What Romania lacked, at least until very recently, was the availability of finance.

Property Secrets moved into this market, as we said at the time, in anticipation that the finance would come and when it did it would change everything.

And, guess what? It's worked out exactly like that.

Massive boost from finance

Not only is finance available, but from next month we're going to see a huge boost to the domestic market when the 25 per cent minimum deposit on a property purchase is removed. Banks will be free to lend whatever LTV they want to lend.

What we are going to see is the same pattern of development as we saw in Poland with banks moving - I believe rapidly - to lending 100 per cent LTV.

To me, Romania, based on its size and the development of its property market, represents Poland of just a few years ago - with the mortgage products starting to come on-line and the second tier markets, like Constanta, starting to open up.

These two markets alone - Poland and Romania - offer such a wide selection of investment opportunity that I cannot see any reason for Property Secrets to shift its focus.

Of course, this doesn't mean that we're not ready to pioneer or go into other markets IF and only if we think the opportunities are greater than in Poland and Romania.

For example, I hear people asking about the Baltics. Well, in a nutshell, let me tell you what I think.

The opportunity in Estonia was a long time ago - years ago. The opportunity in Riga has also passed - I know of people who have experienced great growth, sure, but who are now seeing just five per cent growth a year.

And then we come to Lithuania, Vilnius. OK, here's what I think - and I'm quite prepared for anyone to convince me otherwise on this (I don't have a closed mind on any market). I think Vilnius is a very small market and small markets get ramped very quickly and they also burn out very quickly.

Like I say, I always come back to comparisons with our core markets. And my conclusion - if you like Vilnius, fine. Then go and invest in Poznan! They'll almost certainly offer the same kind of growth, but Poznan is within the Polish market with all the advantages that offers.

What advantages? Let me put it this way. What is the point of increasing your costs by going into a new market - the time and cost you need to spend on dealing with different tax systems, different languages, different rental markets, etc, etc, when you can almost certainly achieve the same kind of growth in a far better established and more secure market?

Of course, if you're going to invest in volume, then it may make sense to look at Vilnius, but not otherwise, if you're talking about one or two investment units, it's not worth it - in my opinion.

So, for now, we'll leave Vilnius to others. But do feel free to convince me otherwise. I'd be delighted to hear from you.