Bucharest Isn’t Beersheba

Moshe, a former career officer, took early retirement and was looking for something to do. With his retirement money he bought an apartment in Beersheba, renovated it and rented it to students. A few months later another opportunity came up to buy a second apartment in the same building, and he took it. Over time he built up several apartments and began offering his services to friends who had retired from the army. He got a reputation as someone who could find deals below market price, renovate efficiently while saving time and money, and add value to properties.

I met Moshe on a flight to Bucharest. He told me he was flying out to look at a few real-estate opportunities after hearing from some acquaintances that Romania is an easy place to do business, and he had decided to expand his activity there. He was drawn by the low property prices in Bucharest and the strong growth potential of the Romanian market. After hearing about my work, he asked to meet for breakfast the next day to see how we could work together. That was the start of a friendship.

Over the following months, after we connected Moshe with professionals in Romania (the owner of a construction company, agents, a management company, an accountant and more), we checked quite a few deals for him, and for some reason in the first year he didn’t manage to close a single one or buy even one apartment. It wasn’t that Moshe didn’t find opportunities, but every time, by the time he finished his checks and made a decision, the apartment had already been sold. Moshe was frustrated. He couldn’t understand what the problem was, or why the “system” he had built worked in Israel but not in Romania.

I met Moshe at our Romanian partner’s office in Bucharest, and together with the partner we tried to understand the root of the problem. We went through the whole process, from the moment an agent reported a potential deal to the moment Moshe made a decision and gave an answer. Moshe’s checks took anywhere from a few days to 3 weeks, while our preliminary legal checks, run in parallel, took two or three days at most.

The deeper we looked, the clearer it became that the problem was Moshe’s feasibility check and business plan, because of the size and diversity of the city. In Israel Moshe knows the numbers from experience, and he had built himself a spreadsheet that could calculate a deal’s feasibility and give him a first answer within minutes. In Romania he hadn’t cracked a “system” that could give him a Go/No Go answer any faster. His spreadsheet was useless. He struggled to get the data he needed.

I suggested he get a detailed price list of items and materials from the contractor, so that for every future deal that came across the desk he could calculate the expected renovation costs without needing a detailed quote from the contractor (true, there will always be exceptions, but at least he could get an estimate quickly). I showed him another tool for tracking rents by area in Bucharest, so he could get a quick answer on that too. We also agreed to focus only on a certain type of apartment and certain parts of the city, to make things easier for him (focusing on a specific niche of the property market lets you build expertise and be more efficient).

When we met 6 months later at my office in Ness Ziona, Moshe already owned 2 apartments in Bucharest and was in the middle of buying another one for a client. The time from getting an offer from an agent to Moshe submitting a purchase offer had shrunk to just 3–4 days.

Moshe’s story is a great example of how important preparation, persistence and flexibility are in real-estate investment abroad.

In a competitive market, speed is the name of the game. You need to be able to make quick decisions and shorten the checking process, as Moshe did. As an investor and/or developer, it’s important to take the time out, or plan ahead, to develop tools and processes that will help you analyze deals efficiently. That can include software, checklists, local contacts and more (and, as I repeat every single week, the importance of thorough research before investing in real estate in a foreign country. That includes understanding the economic situation, the tax laws, the buying and selling processes, and more).

Moshe’s story is an example of an Israeli entrepreneur who managed to overcome the challenges of international real-estate investment. He proved that with persistence, flexibility and a willingness to learn, you can succeed even in a foreign, competitive market.

Be flexible, and be ready to adapt your strategies to changing market conditions.