Real Estate in Poland

[Paweł Gorecki]

Hello Guys,

I live in Poland and I do the business here, one of the biggest countries in Europe. It is a very promising market. FTSE Russell upgrades Poland from emerging to developed market few days ago, so now it is in top 25 countries on that list (You can check the rates of other rating corporations like moodys) . The arranger return from flat rental in biggest cities (500k-1m people) is 7%, however experience investor can make 13% or more procent (way more), counting bank loan You can double that precedence (one of my flats makes 36% after the tax). The law is safe and allows a lot different investment strategies (lowering tax rate). The market is still young and constantly growing. At the same time the need of new proprieties is so high that 90% of new flats are sold even before the investment is finished (a lot are sold when there is nothing build yet). Flipping flats or houses started to be more popular here like 3 years ago and usually You can double money invested in 6 months(using bank loan). The reason for that is :

1. People are earning more with every single year (chart in attachment )

2. Square meter per person is still low compare to our neighbours (24,7/ person in Poland, 43,4 Germany or 44,3 Sweden, USA 77)

Now it is a time to take a position on this market before it will grow. A lot of my friends are doing the Real Estate business with great success. But there is one small issue. We lack money for the investment. So I thought I can try to fuse young motivated investors from Poland with other investors that has money to make both happy. And what is the better place for that then US.

My idea is to create a site that will met both Polish investors with opportunities and other investors with money in a form of investments market. Foreign company will be buying shares in Polish SPE company. Polish investors may publish they investments only after verification (including past investments done). Specialists in every single big city will be able to check and measure the profitability. Some more advanced tool to increased the safety (like insurance) may be implemented as well.

Do You think this has a chance to work? Maybe You have some other suggestions?

Thanks for reading,
Pawel

 

[Matt Crowley]

Hi Pawel,

What experience do you have in fund management, asset acquisition? What is your current assets under management? How much have you invested / acquired in your career?

 

[Paweł Gorecki]

Hello Matt,

I own 2 micro academician (14 rooms total). I made 2 flips of flats(55 m2 and 70 m2). I am now starting to build a small block of flats (6 independent flats). I am still new to this market, 2 years experience. The amount of all will be close to 500K$.

Regards,
Paweł

 

[Matt Crowley]

Very cool. Do you have a website for the flats? Investor portal?

I'm in the fund world in Canada (note you are on a Canadian site, not U.S.). If you can do what you need to do without needing to create a fund, avoid it. It is a massive administrative burden. If your business strategy is more opportunistic and development focused, you should be able to value add the assets on a limited capital source, execute and exit quickly and grow organically.

The long-tailed investment world of long-term buy and hold assets is, frankly, better executed by funds with a steady ongoing capital source and a track record for long term capital preservation. Obviously you have a chicken and the egg problem to some extent, but the typical way around it in 99% of successful funds is a very experienced management team with capital markets experience.