Hello everyone, I want to give you all an example scenario and then ask for your humble opinions.. I have 3 properties in Spain. After tax and other fees, 2 of them cost 120,000€ each 3 years and they are now probably worth 160,000 each. The other cost 180,000 and is now worth 200,000. I´ve been wondering whether I should just sell-up and get out of Spain and maybe invest my profit in emerging markets such as Romania or even Poland. We´re advised to hold and not sell to be successful property investors. Even though the UK, Spain and France are mature markets, is there any point holding if things don´t look good for the coming years? Furthermore, don´t you think that in such uncertain times it is better to get in and get out quickly, realize your profit and then invest that into riskier emerging markets. What I´m beginning to learn is that a lot of the profits are really just paper proftis until you actually do sell! I´m sure there are other investors in my position. In addition, whats the point having 3 flats that are totally draining your resources due to high and bad lending terms? Would it better to sell, make a profit of 80,000€ and then just buy into next hot-spot. One thing I fear is that Spanish property market is going from bad to worse and maybe the UK market isn´t much better. Thanks for any opinions on investor strategies of ´sell quickly and re-investing´ or accepting little or no capital growth, being mortgaged to the hilt and ´holding´ if that makes any sense? Cheers, Liam

Hi Liam This was a question I reaised some time ago and there were some interesting comments. I was thinking at the time about flipping E European properties which had very high growth rates between contract and completion. My conclusion was that it could woprk but you certainly needed to have the cash to complete if necessary. My view on Spain (where I have a much delayed off plan investment nr Mojacar completing next year) and France, where I have a number of properties is that if you're looking purely at investment then there are better places to put your money. But then that's been the situation for the last few years. Both markets are probably a solid long term hold. In stock market parlance it's probably a good idea to have a spread of investments. My properties in France cover their costs and I'm remortgaging them to finance my East European investments so they are handy for that - it's alot easier to raise one loan even with French bureaucracy than several in E Europe! Also they are great places to go on holiday. So are they pure investments or a lifestyle choice? A bit of both in my case. You're absolutely right about profit being on paper - I'm having this experience trying to sell in Cyprus. So, having thought through similar issues I think I'll be keeping my French and Spanish properties and using re-mortgage cash to invest further in secondary and third tier locations in E Europe and land in the Caribbean. Huw

Hi Liam and Huw, My UK flat has been on the market for about 6 months now. I couldn't have timed it worse really, what with the HIPS and the credit crunch and this and that. Anyway - I know many people on here would gasp at the very idea of selling one's home. 'Never Sell!' they would presumably advise me. Rent it and remortgage, and get the associated tax benefits. I am becoming more and more tempted to take this route, despite my pessimistic view on UK property. However, there is a downside to this: I will be applying for mortgages on my CEE properties soon, and they will presumably be interested in what debt I already have. I will not be able to conceal it from them because UK mortgages will appear on my credit report. So the never sell policy will greatly increase my indebtedness, and hence my ability to raise credit in europe, which is my main goal at the moment. It seems like the optimum way to raise mortgages is this: 1) Have no debt. 2) Have a huge salary. 3) Start raising mortgages in the the countries with the harshest lending conditions first. So, start with Romania, then Poland, then Slovakia, then Czech. 4) Finally raise mortgages in the UK. Any thoughts or advice?

Hi Minsk I'd have to agree. In my limited experience, it appears that you should ensure your personal financial situation gives the lender least reason not to lend. I've just advised my brother that he should continue renting and make some money be investing abroad. As a borrower with a high salary and no mortgage I think he would be a far more attractive prospect to a foreign lender. I, on the other hand, am self-employed with a good income and a large mortgage which makes me a much less attractive prospect. I have limited room for improving my prospects although if I did sell the house, my wife would divorce me shortly afterwards at which point I would start renting ;-) I have two UK buy to let properties which make a small annual loss. I hadn't planned to sell them but, with the expected changes to CGT, I will certainly be reconsidering that option next May. I'm still crossing my fingers on the refinance front in Poland. Alex

Hi Minsk, Hi Alex, I have been also wondering about the best way around to get the right finance ...like you say Minsk ...starting through the awkward one(Romania) and then moving to the easiest (Czech)... However you end up always stuck after a very few...and then i wonder when i read the experience of other investors explaining they develop huge property portofolio in CEE and get the high associated level of Morgages? (See the article of PS In Sundaytimes for exemple) http: / /property .timesonline .co .uk /tol /life _and _style /property /overseas /article2737176 .ece The question is and remains , how do you do that? It is pretty sure that just a good salary would not be enough when you are talking of GBPMillion worth of mortgages? ?any clues ? Christian

Hi guys, Thanks for your views. I´m a young investor in the early days of portfolio building but I´ve been having major problems re-financing a property in Spain over the last 2 months. The bank valued the flat last week for a very small amount and offered me only 50% LTV, take it or leave it. I think I´ll take it and either pay off a flat in Warsaw in tranches, or else flip the contract and buy into Romania or buy land in Romania if I can. The credit crunch is having bad effect on Spanish banks who are know tightening lending criteria. They valued the flat at what I believe is 20% below real market value, which is scandalous in my opinion!! I also have big disadvantage of being self-employed and have 2 mortgages already, which will soon become 3. That will put a stop to any more investment for near future cos my Spanish mortgages have become cash-flow neutral/negative due to high interest rates. Maybe it could be worthwhile setting up some kind of property investment company in future just so that bank can see this is one of my main activities as a self-employed person... With regards to banks in CEE, I was turned down by a few Polish banks cos they ran a mile when they saw my two mortgages on my credit report and that I was self-employed. In the end I decided to either give up on looking for a mortgage in Poland or jump in front of a train and I chose the former! If you don´t have big earnings you will have problems getting a mortgage in Poland. Another bad point about mortgages in poland is that they are very expensive with too many exorbitant commissions. See you all, Liam

Hi Liam Gearing is key to building a good sized property portfolio. From what you said above I would suggest you sell the Spanish property if 50% LTV is all you can get & also the Warsaw flat if you really cannot get it mortgaged at a min 80% LTV. You could use the money released to put down as deposits in Czech or perhaps Bulgaria (Sofia only) where you should be able to get mortgages of 80-90% LTV this will allow you to have a higher 'exposure' to capital growth. It is good to have a balanced portfolio as Huw says, but to maximise your portfolio growth all properties need to be geared at min 70% & preferable 80%+ on purchase or you just have too much of your own cash tied up, this limits your potential capital gains. Just an alternative to think about Antony

Hi Christian, Although I don't have experience of it myself, I have assumed that the trick when applying for mortgages in CEE is not to disclose other mortgages in the CEE. Each one must believe it is the only one. However, you will be forced to disclose UK mortgages, because they will appear in your credit report. I must stress: this is only my theory at this point, which is why I'm so happy to discuss it. If I had already successfully done this (and I'm guessing there are a few frequenters of this board who have), then I would be keeping very quiet.

Caveat : Not disclosing all your debts when obtaining a mortgage could be a criminal offence (i.e. obtaining money by deception) although I doubt the police in the CEE countries would have any interest in pursuing a case ( and to my knowledge only a handful of people in the UK have ever been prosecuted and usually when it is couple with other fraudulent behaviour).

I was wondering if anyone had found any alternatives to raising money through Polish/Romanian banks? I am struggling to see how anyone could raise £1m in loans in eastern europe. The big rises are clearly going to come from Romania at the moment but without any effective gearing the Czech Republic seems like the only option. I tried calling a couple of multicurrency mortgage specialists but they wern't interested. I tried my bank Barclays but as of Oct 07 their managers have been instructed not to issue loans for property of any kind due to the credit crunch. I know it's not tax efficient but has anyone had any luck raising funds in the UK?