This development appears to be a good deal but as it will be my first property investment I would be greatful for any comments from more experienced investors.

hi,

in my opinion main points of this deal looks excelent. Only issue which you should be aware are the payment terms, they are like :

20% on exchange (estimated 27th February 2008)
70% intermediate payment on completion (estimated May 2010)
10% on handover (estimated three to six months after completion)

Which means that :

1. Either you have to make sure that you are eligible to draft mortgage in Bulgaria somewhere around May 20100
(this eligibility depends on your personal circumstances, you are employed/not employed, level of income, nationality, etc.)

or

2. You have to have ready 70% of price from your own funds on date estimated around May 2010 and you should plan for that.

You should also consider a fact of eventual delays, which means that after you draft mortgage for second (70%) payment, developer can delay with completion, but you have to pay interest from 70% of apartment price which you already drafted. In case delay is longer, that can be a significant cost.

In order to see how can you be protected against those potential problems, you should see how those issues are treated in FPC for this particular development (for example is there a possibility to flip apartments before second payment is due in case you will have troubles with finance raising?)

Hello Marek and Mat,

Yes the payment terms are not the most favorable for a PS deal but for Sofia they are excellent. If you were buying on the local market you would have a number of unsavory stage payments; PS has managed to negotiate these terms down.

What we have to remember here is that Sofia is a relatively new property market and banks will not give great terms to the developers they are lending to; this has to be reflected when the developer offers terms to the buyer. If you buy in Poland now you will get good terms but this is an established CEE property market.

This deal is re-assignable. I have confirmation from the developer that this is the case. If you bought and needed to sell on you would need a written agreement between yourself, the developer and the new buyer.

I hope this all helps? Please remember everyone that this deal closes tomorrow, therefore please confirm your interest today. This deal has been very popular so please get in there early so someone in the Portfolio Development team can contact you.

Kind regards,

Martin Grainger
Head of Portfolio Development
purchasesupport@propertysecrets.net

To Marek and Martin,
thanks for the advice and your time,
Matthew

Is there anyone in the forum who has invested in this development?


Do you consider to complete it or walk away?

To Yoohan,

I did invest in this development and at the moment intend holding onto it. Did you buy?

Matthew

I have a deposit down on one apartment, and I'll be waiting until completion before deciding what to do. Hopefully the situation with mortgages in Bulgaria and/or the exchange rate will improve by then.

I agree as far as they payment structure seems to be a bit awkward so you may want to investigate more of maybe strike up some sort of a deal with the builders for a much better deal.

The intention, by the way, is that this forum, or indeed the Property Secrets site, does not close.