Five biggest real estate investors’ mistakes in Bulgaria

24 May 2009 – 12:25

Investors make mistakes every day. If they did not then the developers, estate agents and lawyers will stop making money. Investing in Bulgaria is even more risky than most of the other countries mainly due to the lack of judicial system and enforcement of laws.

Here is a list of five such investor mistakes from which it will be hard to expect any return at all:

  • Bulgarian Dreams and their network of interconnected companies leaving half of Bulgarian with unfinished projects with bombastic names such as Aquamarine, Belle Vue, Bell Tower, Breeze 1 & 2, Cedar Lodge, Cedar Heights, Golden Fort, Green fort, Interpred Development, Iskar Central, Museum House, Panorama Fort club, Paradise Villas, Park Residences, Pirin Place, Bansko Hill Road, Ravda Village, Sofia Hills Mansion, St Vlas, Summer Dreams, The Sands, The Orchard, The Residence, Vega Village, Waterside Quay and White Lagoon. At least the big number of deceived investors lead to their uniting in groups such as offplancollective.com. However, the mess created by Robert Jenkin and his fraudulent schemes is so big that it will be hard to find a way out soon.
  • Golden Pearl Holiday Resort, Varvara, Bulgaria – advertised by the “excellent investment opportunities provider” The Right Move Abroad Ltd. After several years of disputes finally the development was founded to be completely illegal. It is strange that its development was allowed in the first place and what is left now is to find someone to deal with the bricks, rubbish and concrete left on the site. This, however, does not stops the awarded estate agency to continue advertise the development even as “sold”.
  • Oasis VIP Homes. Built right on the sands next to the sea this development is illegal by all means of the law and Bulgarian constitution. Sooner or later it will be demolished.
  • Golf Club Ibar – “the first Nicklaus design Golf Course” in Bulgaria and probably their last. The development of the two cousins Lazarov & Nedev has become famous with its fake documentation and forged habitation certificates. Among the other problems the developers have been sued even by the local Municipality.
  • Sunny Beach and even more now with surrounding towns of Nessebar, Ravda and St. Vlas. What used to be the nicest Black Sea resort is now a concrete monument of construction madness and corruption in the real estate sector in Bulgaria. It will take years to recover from the damages caused by uncontrolled building in the area.

    • Who is to blame for this? Surely the Bulgarian authorities who allowed this in the first place and were amongst the main beneficiaries of bribes and organisers of all sort of schemes to circumvent laws and materialise developer’s greed.

    The list above does not pretend to be a comprehensive one but rather a start and challenge to everybody else with experience is this area. Any comments or suggestions are welcome and I will love to hear from you criticism or recommendations.

By survivor | Posted in important, properties | Comments (1)

Property prices and tendencies in Bulgaria

27 February 2009 – 18:06

A recent article in Capital newspaper (one of the most read newspaper for economic news in Bulgaria) reviewed one subject which was sort of a mystery for many years – the price of construction works. According to the calculations provided in this article (which source is the Bulgarian Construction Chamber) the price of construction varies between 940 to 1380 BGN per sq. m. less the investment for the plot of land. That price is for “turn key” completion and excludes just the furniture and if we are to believe then the builders in Bulgaria are making huge loss.

It is not a secret that even in this survey the data is quite exaggerated and the real prices are almost half of what is quoted.

The article, however, is an attempt to justify the prices and to make the picture more “optimistic” and that what is on the market at the moment seem logically priced.

It is not a secret again that being owned by one industrial group the newspaper is “defending” in a way the position of the developers and trying to bring a calmness among the people in Bulgaria. Judging from comments (286 so far), most of which negative, obviously this article does not serve its purpose but on the contrary.

One very interesting comment sheds some light onto the market mystery and raises the logical questions about the buyers.

Who is supposed to buy at these prices?

There are three main groups of buyers, who were pushing air into the prices’ balloon and they are not difficult to guess:

  • buyers from abroad / foreigners
  • Bulgarians living abroad
  • Bulgarians living in Bulgaria, who managed among the property boom to sell something somewhere in Bulgaria and get enough money to buy directly or apply for mortgage

Now, from this picture from where will come any new buyers? Foreigners who bought here are looking to sell. The salaries in Bulgaria are going down and many people are losing their jobs and the Bulgarian abroad are also not in very good situation. Who will pay the “reasonable” prices of the developers?

It not a secret also that many buyers who bought with mortgage are getting harder and harder to repay them and the market is getting flooded with more and more properties for sale from the banks (so called secondary market of properties).

The logical end of the comment is that when there is no demand nobody cares about the price of construction. In a market economy the demand (not the supply) is the main factor for the price of one product so it seems that somebody has to do the maths again…

By survivor | Posted in important, properties | Comments (1)

Broker’s stupidity is endless

28 January 2009 – 14:30

As it seems…

olympia consult header image

olympia consult header image

“Soled” is the new meaning of “Sold” – according to these intellects. Another proof that there is nothing easier than becoming a broker in Bulgaria.

By survivor | Posted in various | Comments (1)

Things to Do in Bulgaria When You’re Owner

20 January 2009 – 19:27

I am writing this post further to a reply to a topic in Talk Bansko Forum. The idea is to give some more information on the things that need to be done once the property purchase has been completed.

This (sort of) guide assumes that the buyer is an individual who bought the property on his/her name, which as per the current legislation in Bulgaria can be only apartment or in some cases apartment with the so called “ideal” shares from the ownership of the land where the building is built.

1. First step is to register in the BULSTAT registry (BULSTAT = BULgarian STATistics). The term for this registration is seven days from receiving the Title Deed for purchase of the property.

Why is this registration required?

The purpose of BULSTAT registration is to sort out the mess caused by the “knowledge” for foreign languages and mostly the interpretation of the names in Bulgarian language / Cyrillic alphabet. By creating unique code only from digits the misinterpretation is (hopefully) avoided. Once each owner has such number it is easier to register properties, check for taxes and obligations. For the Bulgarians this is done with their identity (EGN) numbers but since foreigners do not have such numbers the BULSTAT is going to be used.

The registration is compulsory from some time now but what happens with those who bought properties before it was introduced? Well, the things are not very clear but officially all existing owners should be registered by the State, or at least that is the assumption. In practical terms every owner at one point or another should do this registration so there is no chance to miss it.

2. Secondly, the other registration that is required is with the National Revenue Agency where each owner has to submit a special form/declaration describing the property and its main characteristics. On the basis of this declaration each year are calculated the property and the waste/rubbish collection tax. The term for this registration is two months from the date of receiving of the Title Deed.

3. Thirdly, (and lastly) the registration that is required in case that the property will be rented to tourists is so called “tourist accommodation” registration which has to be made in the Tax Department where the property is located and subsequently is connected with payment of annual tax. In case that this registration is missed then this omission can be reason for imposing fines by the tax administration.

Hope the above information could be useful for someone. However, for each particular case it will be good to consult the things with a lawyer first.

By survivor | Posted in important, properties, various | Comments (0)

Don’t give money to Parvanov. Even on Christmas!

3 December 2008 – 16:31

The original in Bulgarian – http://www.ekipnews.com/?p=3720

Georgi Parvanov – Bulgarian President, former secret agent in the Communist State Security Services.

It is now the beginning of the sixth issue of the “Bulgarian Christmas”. So far, judging from the report on the official website of the campaign the money raised are 11 662 026 BGN. Most of them were spent for purchase of ambulances and medical equipment.

What I can admit is that when it first same to my mind this idea (around the autumn of 2003) I opened one folder and wrote down “Christmas impossible”… We managed to prove that solidarity is not just exhausted political term but in the Bulgarian reality it can be enriched with real content.

states on the website the president, who is the main initiator and patron of the campaign.

As it happens with most of the things touched by Parvanov “Bulgarian Christmas” turned up into a cynical, impudent and lacking of any human meaning mockery with the Bulgarian people. These people are repeatedly called to donate money for a campaign which only purpose is to show the president as compassionate, painstaking and socially responsible.

And the people donate – very often their last money – after the state, presidential and party sponsors, circles of companies and other predators already collected their earnings via taxes, inflated prices and direct steals from the budget. The last case – president’s comrades and the cheeky steals of the president’s sponsors were the main reason EC to stop financing of 220 million euros for Bulgaria. Just one of the companies very close to the president – Eurofrigo managed by Ludmil Stoikov and Mario Nikolov was asked to return to SAPARD the illegally received 3 million BGN – which amount is very likely to be collected in this year’s campaign.

Therefore to these people – and mostly to their chief Georgi Parvanov – should not be given anything, even on Christmas. They have proven convincingly that any money touched by them vanish immediately. No money, no scrounging. They already had enough.

It is impudent and cynical to ask the people to donate for allegedly plausible cause when the government continuously speaks about the 5 billion BGN surplus. Only with one signature of the Minister of Finance Plamen Oresharski in Bulgarian Christmas can be transferred ten times and even more money than the harassed people manage to collect for five years. And this money to be used for the sick children so their parents not to be asked to beg from the State.

But no. It is better crying mothers and father to kiss president’s hands and to cry on his New Year’s speech. Solidarity – blah, blah.

And one other thing which is also important why no money should be given to the president when he and his comrades ask for them. So far (this is the sixth year) “Bulgarian Christmas” is still not registered under the laws of the country as legal entity. There is no clear information who physically orders the payments and it is not known publicly who are the people in the committee that allocates the funds. For five years there isn’t any single financial report nor that any of the sort have been given to the State auditors and even worse – there is no public information for anything of that kind.

It is clear only one – Parvanov used the coins of the Bulgarians and the suffering sick kids to improve his image.

Don’t give him even a coin. If you have the willingness and the means – give money, but choose independently to whom to donate them – as free citizens in free state.

And leave Parvanov to get money from his sponsors and to donate them. At least they will not refuse him.

By survivor | Posted in important, various | Comments (1)

Bulgaria – the Russian Trojan horse in EU

28 November 2008 – 18:17

Very interesting post describing how Bulgaria is considered to be the Trojan horse in EU for Russia and how its current behaviour continuously follows that trend. The actual copyright on this phrase belongs to the Russian representative to the EU Vladimir Chizhov.

It is funny how every single person in Bulgaria knows that the government is corrupted, most of the so called “socialists”, the ex-Communist Party members were agents of the former State Security together with the current president. And when speaking for him it appears that he is even proud of this. Not to mention the others who even firmly believe that they actually did something good.

Now when their incompetence and corruption became popular not only in Bulgaria but in the EU they dare to think that somebody else is to be blamed. It is true that there is no such thing as former communist. One of the main characteristics of Bulgarian communists (nowadays “socialists”) is their shameless insolence.

At least one good thing from all this is that nobody will keep any illusions about their type of “socialism”.

By survivor | Posted in various | Comments (1)

Another successful investment in Bulgaria

28 November 2008 – 13:26

The Guardian published yesterday an article about another “successful” investment in Bansko. Another thing that probably worth mentioning that the described development – Pearl II is still offered on various sites like The Bulgarian Property market.

Probably it is not new but I will repeat that the very first thing that any investor in real estates in Bulgaria needs BEFORE anything else is to find a lawyer.

By survivor | Posted in important, properties, various | Comments (0)

Counting naked swimmers…

3 November 2008 – 21:10

Now when it is clear that the situation will not get any better in the next few months it is time to count those who were “swimming naked” hoping that the tide will miss them ;)

It seems that few developments in Bansko are already experiencing difficulties servicing their clients like All Seasons Club, The Orchard, Cedar Lodge (I, II and the rest), Lira Thermal and Golf Club IBAR. Apart from them there are some others that will come up very shortly.

The only sad thing is that this “swimming” experience will leave bad taste to those involved.

By survivor | Posted in important, properties | Comments (3)

The world crisis finally came to Bulgaria

30 October 2008 – 15:10

It is official now. Whether you like it or not it is here. We are about to see “who has been swimming naked”. Construction, estate agents, construction materials, tourism will feel it shortly. Banks, financial services to follow.

Ready to dive?

By survivor | Posted in important, properties | Comments (0)

How to certify power of attorney for Bulgaria

28 October 2008 – 15:10

I posted a detailed instruction on how to certify documents (and more precisely power of attorneys) in order to be valid in Bulgaria.

Probably this information will be useful for someone who is about to finalise purchase process by signing of a title deed.

Apart from the power of attorney there are also some other documents required but this will depend on your situation and it is better to consult it with a lawyer.

By survivor | Posted in important, properties | Comments (0)
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