Buying Property in Ukraine - Too good to be true?

[Nailer]

I'm looking at real estate listings, and this looks too good to be true. Here's a nice house on the beach in Odessa for $130,000:

http://realestateukraine.eu/catalog/houses/155129.html



This would cost $2 million dollars in California, at least.

If you just need a place to live, $30,000 is all it takes for a new high-rise unit:
http://realestateukraine.eu/catalog/apa ... 53451.html

Is this real? What's the catch?

[starchild5]

look for near by property and its price..if there is huge price difference, then dig more, find out about the owners, go back and forth with data, analyse, get second opinion....and then buy...good luck

[chanta76]

International investment can be tough because there is allot you don't know about local laws of that country. If you have the money and time. I would choose to stay in that country and rent a place for a few months. See what the locals say instead of a web-site. For real estate it's important to do this. Also if your a foreigner there maybe unique laws that may apply to you.

[gravity25x]

starchild and chanta both mentioned some good things. Be alert and research more, you never know how things work...maybe that house is 2 blocks from a waste water treatment plant.

Ukraine is in chaos. The Ukrainian govt sold out to the US/NWO. They're a bunch of greedy SOBs. Have you seen some of the crazy decisions/opinions that come out of their national government? They're crazy and I wouldn't trust them wth $10,000, much less $130,000.

If you have some Ukrainian friends who can tell you how things are at this exact moment, you might try it. But unless you speak Russian extremely well, I wouldn't recommend it. Ukraine is known in the former USSR as a place where ANYTHING can happen, as long as you have the money to pay for it.

There's much cheaper property in the world. Are you going to ukraine for a specific reason? Otherwise I'd look for a cheaper condo OR a more stable country.

I think the "catch" as you said, is that anyone who is rich has already left ukraine. So they're trying to sell their property off Of course this isn't true in all cases, but for the person with $100,000 in the bank? They're not rich enough to play in politics, but rich enough to get out of Ukraine. It's just the ultra rich and the semi-impoverished that are still in Ukraine from what I have understood.

Again, if you're really set on Ukraine, make sure you have some native friends and can speak Russian well yourself before you get involved in buying property in a country in upheaval... Otherwise I think you're really asking for trouble...

[gsjackson]

starchild and chanta both mentioned some good things. Be alert and research more, you never know how things work...maybe that house is 2 blocks from a waste water treatment plant.

Ukraine is in chaos. The Ukrainian govt sold out to the US/NWO. They're a bunch of greedy SOBs. Have you seen some of the crazy decisions/opinions that come out of their national government? They're crazy and I wouldn't trust them wth $10,000, much less $130,000.

If you have some Ukrainian friends who can tell you how things are at this exact moment, you might try it. But unless you speak Russian extremely well, I wouldn't recommend it. Ukraine is known in the former USSR as a place where ANYTHING can happen, as long as you have the money to pay for it.

There's much cheaper property in the world. Are you going to ukraine for a specific reason? Otherwise I'd look for a cheaper condo OR a more stable country.

I think the "catch" as you said, is that anyone who is rich has already left ukraine. So they're trying to sell their property off Of course this isn't true in all cases, but for the person with $100,000 in the bank? They're not rich enough to play in politics, but rich enough to get out of Ukraine. It's just the ultra rich and the semi-impoverished that are still in Ukraine from what I have understood.

Again, if you're really set on Ukraine, make sure you have some native friends and can speak Russian well yourself before you get involved in buying property in a country in upheaval... Otherwise I think you're really asking for trouble...

I'd agree with this. I did a real estate backed investment in an unstable foreign country once -- Detroit -- and it was the worst experience of my life. Lost all my money and got three years of extreme aggravation trying to get it back. Not really joking -- Ukraine and Detroit are comparable.

Contrarian Expatriate, a poster here, used to buy Ukrainian CD's before the coup in 2014, which paid something like 18 percent. He was doing well with it back then, and I'm curious about whether he still considers Ukraine investment-worthy in any way. The government -- a bizarre concoction of Jewish kleptocrats and neo-Nazi thugs -- truly couldn't be any crazier or more unstable. The country is the Titanic with all women and children evacuated. (Bringing freedom and democracy to the world -- it's what we do. You're welcome, Ukraine.)

[gravity25x]

starchild and chanta both mentioned some good things. Be alert and research more, you never know how things work...maybe that house is 2 blocks from a waste water treatment plant.

Ukraine is in chaos. The Ukrainian govt sold out to the US/NWO. They're a bunch of greedy SOBs. Have you seen some of the crazy decisions/opinions that come out of their national government? They're crazy and I wouldn't trust them wth $10,000, much less $130,000.

If you have some Ukrainian friends who can tell you how things are at this exact moment, you might try it. But unless you speak Russian extremely well, I wouldn't recommend it. Ukraine is known in the former USSR as a place where ANYTHING can happen, as long as you have the money to pay for it.

There's much cheaper property in the world. Are you going to ukraine for a specific reason? Otherwise I'd look for a cheaper condo OR a more stable country.

I think the "catch" as you said, is that anyone who is rich has already left ukraine. So they're trying to sell their property off Of course this isn't true in all cases, but for the person with $100,000 in the bank? They're not rich enough to play in politics, but rich enough to get out of Ukraine. It's just the ultra rich and the semi-impoverished that are still in Ukraine from what I have understood.

Again, if you're really set on Ukraine, make sure you have some native friends and can speak Russian well yourself before you get involved in buying property in a country in upheaval... Otherwise I think you're really asking for trouble...

I'd agree with this. I did a real estate backed investment in an unstable foreign country once -- Detroit -- and it was the worst experience of my life. Lost all my money and got three years of extreme aggravation trying to get it back. Not really joking -- Ukraine and Detroit are comparable.

Contrarian Expatriate, a poster here, used to buy Ukrainian CD's before the coup in 2014, which paid something like 18 percent. He was doing well with it back then, and I'm curious about whether he still considers Ukraine investment-worthy in any way. The government -- a bizarre concoction of Jewish kleptocrats and neo-Nazi thugs -- truly couldn't be any crazier or more unstable. The country is the Titanic with all women and children evacuated. (Bringing freedom and democracy to the world -- it's what we do. You're welcome, Ukraine.)

You bringing up those interest rates made me remember something I saw once:
https://www.gobankingrates.com/banking/ ... est-rates/

Very interesting stuff.
Uzbekistan and Georgia had the highest interest rates on CD deposits (after inflation). Followed by Ukraine.

Just remember many of these countries don't have something like the FDIC in the US.

[gsjackson]

You bringing up those interest rates made me remember something I saw once:
https://www.gobankingrates.com/banking/ ... est-rates/

Very interesting stuff.
Uzbekistan and Georgia had the highest interest rates on CD deposits (after inflation). Followed by Ukraine.

Just remember many of these countries don't have something like the FDIC in the US.

Yeah, I saw the same chart a couple of weeks ago looking for the countries with the best CD rates. So it begs the question: How stable do you think Georgia's banks are right now? If you put $5k-10K in a CD there, how likely are you to be able to get it back out? Obviously, you're dealing with the same sort of questions about Georgian real estate, but at $10K per unit you can hardly go wrong it seems.

[gravity25x]

You bringing up those interest rates made me remember something I saw once:
https://www.gobankingrates.com/banking/ ... est-rates/

Very interesting stuff.
Uzbekistan and Georgia had the highest interest rates on CD deposits (after inflation). Followed by Ukraine.

Just remember many of these countries don't have something like the FDIC in the US.

Yeah, I saw the same chart a couple of weeks ago looking for the countries with the best CD rates. So it begs the question: How stable do you think Georgia's banks are right now? If you put $5k-10K in a CD there, how likely are you to be able to get it back out? Obviously, you're dealing with the same sort of questions about Georgian real estate, but at $10K per unit you can hardly go wrong it seems.

I'm happy so far with my units. One is finished, the other basically finished. I honestly believe the value will go up over time. The elites are doing their best to impoverish people, and increasing living costs is part of that. I'm not renting them out at the moment. When I'm in Georgia I live in one and the other (which isn't finished) just sits...for now..

I'd have to do more research to know how stable their banks are. But I know one thing: they are more stable than banks in the US or Sweden. They have a higher percentage of capital reserves than either country:

"Currently the reserve requirements on funds attracted in the national currency amount to 7%, and stand at 20% for funds attracted in a foreign currency." From: https://www.nbg.gov.ge/index.php?m=558&lng=eng
English written by Georgians is always a little odd (even if grammatically correct), but I think they are referring to Bank capital reserve requirements..

This is in contrast to the Federal Reserves requirements in the US: which are about half: https://en.wikipedia.org/wiki/Capital_r ... _1_capital

But again it mostly comes back to the fact that there is no FDIC as far as I know, in Georgia.

Apparently they are talking about fixing that thought: http://cbw.ge/banking/commercial-banks- ... ce-system/

I guess what I would do until then is: just pick the biggest bank with the highest capital reserves.

[Rock]

1. Guys be very careful about chasing high interest rates around the world. With these deals, you face either currency risk (most of these bank CDs are local currency denominated), the bank or company risk (if issued by private institution), or sovereign risk (if issued by the national government). Some examples to consider from the past:

- Iceland bank and CD rates 2009 ish

- Russia late 90s

- Argentina early 2000s

- Brazil 2009 ish

- Third tier banks in Philippines mid-late 90s

- South Africa 2009 ish

- Turkey 2009 ish

- Costa Rica private investment USD CD very popular w Anglo expats which lasted 20 years until in early 2000s...(Villalobos brother’s ponzi scheme)

- GBP / JPY carry trade from mid 2007 for next 18 months or so

- Carry trades longing Aussie dollar, New Zealand dollar, South African Rand, Turkish Lira and shorting Japanese Yen, Swiss Franc, and US dollar during times of quickly contracting risk appetite (unwinding) most recent being 2008/9.

- Certain private companies in Brazil offering high rates in USD and even higher rates in Reals through 2007.

2. If you consider buying condo or property in any country, go there first to stay on-the-ground in the area for an extended period of time to learn the market from bottom up. Never buy in name of shell/proxy/sham company with intention of skirting local foreign ownership restrictions. And never never buy in name of gf, wife, lawyer, trusted friend, or anyone else unless you wanna give it to them straight up. Before you buy, hire a lawyer to do title search and arrange all paper work (find your own don't accept intro from seller lol). And do a lot of due diligence on lawyers before you pull trigger. You can start from list provided by US Embassy.

[MrMan]

I was looking at an add for an apartment just south of the Jakarta area in the direction of Bogor. About $25K for a two bedroom. The down payment is around $3000. The apartment hasn't been built yet. They are supposed to open the units to investors in early 2018. All the monthly payments could total up to about $3000 to $4000 (nominal, as in not adjusted for inflation) before the apartment is completed. The market price for apartments out there now seems to be around $50k.

I'd be assuming the risk of buying a unit before it is built. In the past, when developers went bankrupt, new developers took over, usually new developers who are less risky, and this can actually cause the unit's price to go up.

I think there is a market for 'second hand' not-yet-built units, and that the price appreciates.

Two bedrooms isn't big enough for my family to actually live in, but it would be a good investment.

I just need to make sure the land is owned by the investors in the building, not someone who technically has the legal right to destroy the building. I've heard some structure it that way. I don't think tearing down sold airspace units like this is common in Jakarta. Buildings can be delayed for a year.

I'll have to look more into market prices. Some apartments have appreciated in a short period of time.

[Rock]

I was looking at an add for an apartment just south of the Jakarta area in the direction of Bogor. About $25K for a two bedroom. The down payment is around $3000. The apartment hasn't been built yet. They are supposed to open the units to investors in early 2018. All the monthly payments could total up to about $3000 to $4000 (nominal, as in not adjusted for inflation) before the apartment is completed. The market price for apartments out there now seems to be around $50k.

I'd be assuming the risk of buying a unit before it is built. In the past, when developers went bankrupt, new developers took over, usually new developers who are less risky, and this can actually cause the unit's price to go up.

I think there is a market for 'second hand' not-yet-built units, and that the price appreciates.

Two bedrooms isn't big enough for my family to actually live in, but it would be a good investment.

I just need to make sure the land is owned by the investors in the building, not someone who technically has the legal right to destroy the building. I've heard some structure it that way. I don't think tearing down sold airspace units like this is common in Jakarta. Buildings can be delayed for a year.

I'll have to look more into market prices. Some apartments have appreciated in a short period of time.

I know some investors played that game a few years in Bangkok (buy condos early pre-sale and then re-sell either soon after for hot projects that sold-out fast or when structure is about complete. It worked pretty well when real estate prices were still rising fast and before there were so many projects. Now prices are already too high and there are way too many condos in central and nearby outlying areas. I don't know the situation in outer Jakarta at moment.

But I forgot to add what I consider another big risk - buying pre-sale. Many people have been burned one way or another in SE Asia. Some examples:

- Read Starchild's posting of presale buyers in the Philippines who got screwed over by the likes of Ayala and SMDC. I'll mention some of these and other potential risks below.

- Project can be delayed for a very long time. Example of this is Penthouse Suites in Angeles City which was over 4-9 years late on delivery of final units depending on which wave of buyers. Another project which is years behind schedule is just 100 meters from where I stay here in Makati - the Stratfordshire.

- Developer can go bankrupt and no new party comes in to buy them out, especially in case of wide-spread financial crisis. This happened with dozens of projects in Bangkok back in 1998-9. An icon from that era still standing as an empty shell is the "Ghost Building" right along Chao Phrya River. All the pre-sale investors of that building are still left holding the bag nearly 2 decades later.

- Project can be delayed indefinitely due to unexpected factors. Example of this is Waterfront Suites and Residences, a luxury condo right at Bali Hai Pier in Pattaya. Local residents complained in mass that the high towers were partially blocking iconic view from Buddha Mountain so local officials found reasons to indefinitely halt further construction over 2 years ago. The project may eventually get completed but will likely be reduced in height. I'm sure those who put down pre-sale money, especially foreigner name units which require much higher percentage of money upfront, deeply regret getting involved. Going back into the deep past (1980s), the UFO towers in northern Taiwan were almost completed but then cancelled due to many unexplained deaths of workmen and passers by on nearby highway. It was widely believed that this high-end sea-side project aimed at vacationing expats was haunted so developer cancelled it and walked. The shells remained empty till 2 or 3 years ago when they were finally demolished.

- A common trick which Starchild's related thread brought up is to sell that unit at an estimated size but then before the unit is turned over, official zoning claims there is an extra 0.5 - 2.0 sq. meters for a smaller condo. As per contracts (and developers add this clause in both in Thailand and Philippines), unit owner will pay at same implied per sq. meter rate for any extra size in final zoning and developer will reimburse buyer at this rate in case zoning of unit turns out to be smaller than estimate. Guess what? In my experience, the completed unit often (perhaps even almost always) get zoned at a slightly higher size than the original plan suggests so you have to pay this. This adds a significant percentage to final price yet it's often hard to measure out the full size they claim. Clearly developer must have some deal with zoning officials for sharing of money from fictitious extra end size.

Remember, pre-sale prices are not always lower. If market is in downturn, actual transaction prices when project is finished may be lower than lowest presale prices. Developer will initiate false price raises during building of unit. But that is misleading. What matters is what you actually can get in the secondary market. Many sellers may list their units at say 500 but no buyers emerge until it gets bargained down to say 400. So the asking prices in early secondary market (while building is still being built) and developer price raises are fiction unless a significant number of transactions actually get executed near these prices. Buying straight from developer, especially as project progresses toward middle to late stage, is usually not a good deal.

IMO, the simplest game is to be a vulture - wait for rush/sacrifice re-sale opportunities from motivated to desperate sellers of fairly new or even not yet turned over developments. In that case, what you see is what you get and you can use unit from day one. No waiting, minimal uncertainty, and perhaps a lower than presale price if the deal was good enough.

[Contrarian Expatriate]

Contrarian Expatriate, a poster here, used to buy Ukrainian CD's before the coup in 2014, which paid something like 18 percent. He was doing well with it back then, and I'm curious about whether he still considers Ukraine investment-worthy in any way. The government -- a bizarre concoction of Jewish kleptocrats and neo-Nazi thugs -- truly couldn't be any crazier or more unstable. The country is the Titanic with all women and children evacuated. (Bringing freedom and democracy to the world -- it's what we do. You're welcome, Ukraine.)

You have a great memory! I have since diversified away from Ukraine, but I might start investing there anew with the dollar being so strong again. Forget the FDIC; these investments are far safer than the US stock market and they pay around 20% in the case of Ukraine right now.

Georgian banks pay about half of that, but the dollar has soared there recently so it is a great time to open accounts there now too!

Yes, there is risk. But managed risk is how people get wealthy. It worked for me.

Follow the rates on Deposits.org for the latest international rates.

[Contrarian Expatriate]

After making a fortune in real estate investments in the US, I will never again buy another property in my life, especially overseas.

If you do opt for an overseas purchase, ensure that you have a real estate attorney approve all your transactions. There are often legal and regulatory snags that can entrap you which often do not exist in the USA. Still, some Americans have lost their properties overseas due to failure to pay local taxes they did not know about, and through fraudulent purchases. At least at home you have transparent and competent legal recourse. Not so in Ukraine.

Then you have the headache of furnishing, hiring help to maintain the interior and exterior, and finding assistance when the roof springs a leak. Even if you do speak Ukrainian or Russian, you will be bilked for more money than locals pay. I once had a cable guy overseas have to come back to my apartment each month to service my satellite dish which would malfunction. I finally went up on the roof with him and noticed that he barely screwed in a din cable so the wind would blow it off and he could charge me to barely screw it in again. When I screwed it in all the way, it never happened again.

Get a hotel room or a rented room and invest your money in a safer more liquid vehicle.

[gravity25x]

After making a fortune in real estate investments in the US, I will never again buy another property in my life, especially overseas.

If you do opt for an overseas purchase, ensure that you have a real estate attorney approve all your transactions. There are often legal and regulatory snags that can entrap you which often do not exist in the USA. Still, some Americans have lost their properties overseas due to failure to pay local taxes they did not know about, and through fraudulent purchases. At least at home you have transparent and competent legal recourse. Not so in Ukraine.

Then you have the headache of furnishing, hiring help to maintain the interior and exterior, and finding assistance when the roof springs a leak. Even if you do speak Ukrainian or Russian, you will be bilked for more money than locals pay. I once had a cable guy overseas have to come back to my apartment each month to service my satellite dish which would malfunction. I finally went up on the roof with him and noticed that he barely screwed in a din cable so the wind would blow it off and he could charge me to barely screw it in again. When I screwed it in all the way, it never happened again.

Get a hotel room or a rented room and invest your money in a safer more liquid vehicle.

Was your experience so bad you wouldn't do it again? The words "will never again" seem quite strong for something that brought you a fortune in life.. What was so bad about it? (Investing in real estate in america)

I'm also investing in real estate, but in Tbilisi Georgia (which is relatively free of corruption, for the region). I'm just starting out now. I've experienced what you said, with the "being charged more" and dealing with maintenance men. It's irritating, but if you have a local friend (like me) it is manageable. I'd like to invest in Sweden, but we have nation-wide rent control here...total BS....makes it totally unprofitable.

[Winston]

@momopi and @Rock you both know a lot about real estate. Any advice about the above? How do you know if there's a catch if a price seems too good to be true?

Is there any protection for foreigners in a third world country if he gets ripped off? What's to stop corrupt government bureaucrats from coming and taking your property?