Starting as a “Heart – breaker”… Ending as a stone breaker…

This happens when you invest without crosschecking before…

I looked at my right. People sitting on the chairs, talking. Then at my left. The bar of Marriott café, at ground floor. I looked up a bit. The famous stairs made of marble. I took a magazine. I was able to read it properly. This quick test convinced me that my vision was still good. I guess the three gentlemen across the table thought I am weird, or lunatic, but I didn’t have any other choice, I needed to be sure I can still see. My eyes returned to the map. There, at the edge of it, far away from Ilfov County, they met again with the magic word: Niculesti. “Don’t you see how close we are to Bucharest? Why don’t you reply?”

It all started as a small favor…
“Ilia, if you are not very busy, I would kindly ask you to see some friends of mine. They have a problem and need an opinion by an expert… Who knows, maybe a good deal can come out of this. I will owe you a favor”. How can I say no to such an introduction? I would never refuse to this friend of mine anyway, but his manners and approach are always an example for all of us. “Am I allowed to give them your mobile number?” “Definitely, I will be more than happy to meet them and of course you don’t owe me anything at all” I replied.
It was a cold December afternoon, back in 2007, a couple of weekends before the Christmas holidays. Marriott hotel had not implemented its “you are rich – so show us the money” parking system yet, so the whole area around was blocked by a parade of luxurious cars. My… poor Touareg was too cheap to find a parking place next to Maybach, Rolls Royce, 3 different types of Bentley, Porsche, all possible Mercedes you can imagine etc. So I had to park at some meters distance and walk to the hotel. The cold air was refreshing me, because I still remember I was very tired that day…

“Niculesti: The future heart of Bucharest!”
The Greek gentleman was on time, actually waiting me. A clean cut person, who was inspiring you positive feelings from the first moment (rare case, allow me to say…). He had some Cypriot friends, who asked him to introduce to them “a good real estate agent, who will earn easy money by selling some excellent plots we have. We want to sell fast, this is why the price will be very flexible”. The Greek guy called my friend and now we were shaking hands with our brothers, the Cypriots. Two men, younger than me (unfortunately it started to happen, yeah). Nice manners, polite, dressed in a casual – expensive way. Sometimes you like or hate someone immediately, by the first view. Well, in this case I felt really comfortable meeting them, I hoped I would be able to be useful to these nice three gentlemen…
“So, after we invested on these plots couple of years ago, we did all the procedure and now we want to sell” “Ok, where these plots?” “On Niculesti” “Niculesti?” “Yes, Niculesti, why you look at us this way?” “Guys, are you sure? Do you know where Niculesti is?” “Of course”. A map opened immediately. It has been severely used for years, as I could see on it all sorts of words and spots. Somewhere up, at the edge, you could search and find with small letters a village, named Niculesti. The word was circled by a pen (not 100% circled, the map’s edge was very near and it was more like three quarters of circle).
“I am sorry, but why did you invest there???” “Mister Ilias, we thought you are serious and they told us that you know Bucharest and its potential. Niculesti is the future heart of Bucharest, don’t you know this?” the Cypriots replied together, with their faces full of surprise. “Who told you this?” “The agent, he knows a lot, he is very well connected. We also asked the female and she checked and confirmed”. “Gentlemen, would you mind telling me your story from the very beginning?”

“400% at least, in 6 months the latest”
Although Real Estate investments are safer than stocks and mutual funds, there is a common code of ethics while promoting them. No one / never dares to promise to you officially a specific profit %, no one has the right to advertise specific figures. This is illegal in many countries, you can end up to courts and pay millions, except of course the fact that your career is over. (By the way, I wonder where are all these lovely serious agents who presented in 2008 stupid lands with huge prices, guaranteed the sales of the apartments and presented to the investors net profits “for sure, if you buy the land”)
Between 2004 and 2006, many “Real Estate consultants ” appeared in Cyprus and advertised / promoted in media “properties in Romania with guaranteed profit”. In the beginning the profit was just “guaranteed”. Then competition forced some “serious people” to specify the profit: “200% guaranteed profits”. Some others said more, in the end there were plenty of advertisements like “Romania offers you 400% profit. Will you grab the opportunity NOW?”. Then some others added to this figure that this 400% would be achieved in 2 years. This quickly became 1,5 year, then 1. Until a brave guy surprised the whole nation, with a historic advertisement of “400% AT LEAST, in 6 months THE LATEST”. (No, he was not arrested)

And they believed…
Looks like the guys across the table were fans of Mariah Carey and Whitney Houston and probably they loved to dance their song “When you believe” (“you will win when you believe”, check it out http://www.youtube.com/watch?v=CxIN79n4jVo). But Whitney and Mariah were singing about us believing in God, not in crooks…
“We saw the advertisement and we thought “What the hell, we are not stupid, we should also take advantage of this opportunity”. So, we called the guy with the advertisement. Very polite, Cypriot like us, someone we could trust. He explained to us that the interest rated at the banks offer very small figures nowadays, while Romania allows to us to invest and earn big profits in some months. He told us that it is possible to reach even 1.000% in 5-6 months, but he preferred to be defensive and said that with 400% we should be satisfied. So, we bought the tickets, reserved the hotel and… here we are, in Bucharest”

The big secret of Niculesti…
“We arrived around the afternoon, as we came from Athens (some business to finish there too). He was waiting us at the airport, he was very polite. Also he had a lady with him, an assistant” “Could you please describe to me how this guy looks like and how his car was?” “Is it important?” “I am curious, if you don’t mind, one of my hobbies is psychology” “He was around 1.70. Dressed in a simple way, he was driving a silver car…” “New that time?” “No, I guess 6 – 8 years old back then. He was nice and also simple, as he said he was so busy he didn’t have time to be very well prepared himself”, informed me the first Cypriot with the second one adding “but the female was SUPER. SUPER in her all” (Greek expression, meaning in everything). “Can I guess? She was dressed sexy?” “You guess right, mr Ilias, but her legs were ooooooooooo, fantastic” “And her cleavage, her cleavage too!” added the other.
“Did you go to the city first?” “No, we were in a hurry and we went directly right, as you reach the intersection when you exit the airport”. “So, the civilization was on your left but you went right?” “Yes, he was so kind, helped us to avoid the traffic. He explained to us all the areas with details, told us all the huge prices and in the end we arrived at Butimanu. We didn’t like the prices there, so he asked us if we want to invest in a new area, which has a big secret. He took us to this nice area, Niculesti. We liked it a lot. Imagine, the secret was so well kept, that not even his assistant didn’t know, she was surprised herself too”. “And what is the secret? He gave you the numbers of the next edition of Lotto?” “Even better! He showed us some official maps, we saw the infrastructure works and the new highways and he explained to us that the new heart of Bucharest will be moved there. With open space available for all uses, Romanians decided to create a magnificent centre in the North, so as to correct all the urbanistic mistakes of the past”

«Why to beat him? He was honest!»
“And you didn’t beat him badly for losing your time?” “Why to beat him??? We saw the map, he was honest! We entered in the city during the evening…” “… so you didn’t see it with natural light?” “No, no”. “Let me guess: In the evening you went out for a dinner with these two. The girl liked one of you and she also brought a girlfriend of hers, who happened to like the other one. You had wonderful sex, both of you. The next day you opened accounts, gave instructions for the negotiations with the owner of the lands and you left” “How do you know?” “I’ve been to this cinema many times and I’ve watched this film a lot”. “Which film are you talking about?” “Never mind. Then he informed you about the final prices after the tough negotiations and you came for the final contract. You signed either without the owner to be present, because something happened to him, or he stayed just one – two minutes because he was very busy that day” “He was busy, sent someone else with empowerment”
“After the contracts, you didn’t have sex with the girls again, something happened and they got upset on you, or asked you for very expensive presents. Today neither them nor the agent answers the telephone to you” “Re si koumpare” (Cypriot expression) “what happened? Are you a spy? You had been following us in Romania?” “No, but all these sound very familiar”. “Yes, but you are wrong, they didn’t disappear as you say. Also the girls were very nice, too bad we couldn’t help them enough and they had to emigrate for this” “Helped them for what?” “They had some serious financial problems but we didn’t have available at that time 20.000 euro they asked to borrow”. “Good”. “And it is a pity, because the girls and the nice agent helped us more” “More? Oh… like what ???”

A… “God sent” help…
“So how did these girls help you more?” “You know, you don’t have to be so grumpy and defensive, they are good people here in Romania”. “I know, this is why I am here too, but what happened with your lands?” “The girls and the agent, but especially the girls, were polite enough so as to tell us how to give an added value to the properties”. “By growing wheat or corn?” “Of course not, we bought lands for residential destination, what corn and wheat are you talking about? So, as our lands were extravillant, they proposed to us to switch them into Intravillant status”. “There? At Niculesti? In the middle of nowhere? You must be joking”. “I am not joking and please don’t interrupt. So, we were introduced to some very nice architects. They really helped us and told us many secrets we didn’t know, thank God we found them, through the girls”. “And what did you do with them?”
“They informed us that the best way to add value to the properties was to switch to Intravillant and apply for a PUZ (zonal urbanistic plan) so as to obtain a good CUT (coefficient). It took some time though, as they had to “oil” many people for this. Finally they did it and today we have the best lands in the area, with approved PUZ. If we want to, we can immediately apply for authorization to build, so we have a competitive advantage towards competition”. “Do you have these papers with you? May I see them?” “ Yes, for sure”. “He opened his bag and gave me a bunch of papers. “Here you are”.

Ground floor + 5 floors between corn and sunflowers…
I will never forget these papers. It was amazing… The so called “architects” were such big crooks that they had instructed the land owners to apply not just for villas, but for buildings! 4 different PUZ documents, presenting some weird buildings… Imagine a land of 5.000 sq.m. with opening of 18 meters ( X 278 meters) hosting some 5-6 blocks. Each of the blocks had a footprint around 500 sq.m. and a weird shape, its dimensions were 10 X 50 meters. All the blocks were supposed to be situated at the land’s border, so as to remain the necessary 8 meters for a street and a pavement. The description was clear, with bigger letters than usual (I’ve seen some hundreds of PUZ so far). You could build one basement + ground floor + five floors, covering up to 70% of the land’s surface. All the walls built at the property’s borders had to be… “blind” (no windows). I guess because you should not see the sheeps behind them, eating peacefully their wheat or grass.
“Guys, what is this?” “The PUZ”. “But why do you have a project for so many floors?” “So as to be able to have the maximum possible CUT and sell the land in higher price”. “Hm, interesting approach. Who told you this?” “The girls and the architect together, like this we can double or triple the price we will sell our land”. “In the middle of nowhere? There is no civilization around, how can you develop buildings and not villas, for example?” “This is not our business, the investor will decide what he wants to develop. We simply give him full options”. “And I guess they told you that you had to pay much more, so as to have tall buildings instead of villas”. “Indeed, but it worths. We calculated the figures and the outcome was positive, as we will sell in a really good price”.
“And why you have 4 PUZ and not one, did you buy 4 lands?” “No, it is one land, just that the ownerships were one next to the other and we didn’t want to merge them, the costs are huge for something like this”. “I have merged tens of properties, this is not true. Who told you this?” “The lawyer and the architect”. “You know the lawyer well?” “No, she was introduced to us by the agent”.

One land, meaning four…
“Guys, I am not an expert on this, but if you look at the documents you give me, these properties are not one next to the other. Look here” I pointed at some drawings and cadastral documents. It was the first time I saw them losing their confidence… “what are you talking about?” “if the land is bordering to the other one, here you can see it as well, in this PUZ”. To cut the long story short, I explained to them that they had bought four small lands, with very bad openings and no connection to each other. They also paid for four different PUZ studies, except if… “where are the stamps of the authorities on the PUZ?” “what stamps? There are so many here” “Yes, I can see… but none from authorities. The project is just stamped by the architect and maybe his friends or God knows who”. “You have bought four pieces of land, in the middle of nowhere and they have presented to you PUZ approvals which don’t have any validity”. “But they said they have” “I also said once fifteen years ago that I would like to be like Sean Connery, but no one paid attention to my hidden talent, unfortunately”.

Fifty euro, meaning two…
“Ok, ok” the guys tried to relax. I was feeling very uncomfortable to say all these to such nice people, but I could not lie. “Even like this, what are the chances to sell the land with our price? Help us and we give you big commission”. “What is your price?” “Fifty euro / sq.m.” “Why fifty?” “Because this is the price we want”. “Ok, in this case I can not help you”. “But why? Before we lost contact with the girls and the agent, we put them to make for us a small market research and they gave us this feedback from the market”. “Did you pay for this?” “No, why to pay?” “So, they gave you another present”. “Yes and we have also telephones to call people to crosscheck ourselves, if we want”. “Did you call?” “No, we trust them”.
“How much did you buy the lands?” “Why? Is it relevant? All people buy and then ask what they want. Also, we must make the profits we were promised, either wise we would not leave Cyprus to come here just for 3-4 times the price of the land”. “Ok, please tell me the secret, I want to help you”. After some minutes I found out that they had bought the land with 2 euro / sq.m. “So the guy bought it with 0.1 – 0.2 and sold it to you with 2 euro, after having told you that he negotiated from 5 euro”. “Impossible, what are you talking about?” “… and now you want to sell with 50?” “Yes, we paid also the PUZ, don’t forget this”. “Correct, how could I ever forget?” “So, what is your opinion? Will you find us a client? You will be paid very well”.
“Guys, first of all, I am not able to trick anyone and present to him the properties, no matter how much you pay as commission” “…but why? You don’t need money? Aren’t you a broker?” “I do not work so many years so as to start now tricking people and promoting properties like this. So, I just propose to you to go to a lawyer, in case you want to find all the crooks who stole your money and also to get rid of the properties as fast as possible”. “In what price?” “Two euro would be very good, the problem for you is where to find the stupid to pay you this money…” “Are you insane? Two euro for a diamond like this?” “First of all the diamonds are four, not one and secondly sometimes in life it is better assume a mistake, correct it and go on, than insisting on something which is pointless”.

“Can we sell with two now?”
The guys got very upset. They terminated the discussion and they tried hard so as to shake my hand and not kick me while I was preparing to leave. They have been probably to the majority of Greek speaking agents in Bucharest, but I guess no one was such a good magician so as to find them what they wished.
Time passed and last month I had a call by a Romanian agent, with who my company collaborates with: “Ilia, how are you?” “Surviving during the crisis” “Listen, a guy of yours, talking Greek, informed me for a land in Niculesti, he told me you know the case. He said that he is willing to listen to something you had told him once and sell for two euro per sq.m. Do you think it worths sending you the papers?” “Not really, keep it for yourself”. In few minutes the Cypriot gentleman called me and informed me that they had not found anyone to sell with the price they wanted, then the crisis appeared and now they just want to get rid of the land, selling it for as much as they bought it. I reminded him that the lands are four and I had to break his heart again, letting him know that I don’t deal with properties like this. I really felt sorry…

We are not more intelligent than the people around us
Why did I share with you all these? Mainly because I want to send you a clear message: We are not more intelligent than the people around us. With me first in the list, there is no reason for any of us to believe that he will find a simple way to make lots of money, without crosschecking, comparing, thinking, implementing an investment strategy.
Now that the market is full of opportunities, don’t forget to work with a good lawyer, architect and accountant that make you feel comfortable and safe. In the end of the day, sometimes I believe that if the crooks are once guilty for trying to trick us, we are twice guilty for not identifying them.

PS. In my opinion Cypriots are probably some of the most intelligent people in this world, combining the mind of the Greeks and the Jewish. I still wonder how it was possible this REAL story to happen in Romania hundreds of times in the last years. And so many people, from all nationalities, to be blocked, having bought agricultural lands in prices of buildable areas…