5 lessons for the Romanian society, taken from Mr. Isarescu’s new Real Estate Investment



A new transaction was announced in the media this week. A transaction not made by just “anyone”, but by the Governor of the National Bank of Romania, Mr. Mugur Isarescu. The man that practically carries the financial stability of the country on his shoulders and protects it from politicians’ quarrels, made a choice which seems excellent. According to imopedia.ro, “he bought a 120 sq.m. apartment close to the Arcul de Triumf area, getting a loan in order to pay just 700.000 lei (circa 155.000 Euro). This apartment is part of a residential project whose owner has gone bankrupt”.

For more information, you can check the link here.

5 lessons for the Romanian society

If the information published in the media is correct, Mr. Isarescu’s investment has a lot to tell us and many lessons to teach the Romanian society. Let’s check them together:

1. When you find a good opportunity, it is always the right time to invest in Real Estate

When the property is good, the location the right one and the price is attractive, waiting for it to go even lower does not make sense. Mr. Isarescu bought something which is really “value for money” and he concluded the transaction now, he did not wait for the winter, when the prices are expected to decrease.

2. If your income is in lei, borrow in lei

His salary is paid in lei, so he chose to invest in lei. The announcement of this investment also sends a message to the population. It is not by coincidence that lately the banks are willing to borrow in lei (which exists in surplus in some of them) than in Euro, which is expensive and rare to find.

3. 1.200 – 1.300 Euro / sq.m. for an apartment close to Arcul de Triumf

If an apartment of 120 sq.m. in this area really costs 155.000 Euro (and not 250.000 – 300.000), then this gives a clear sign for the direction of the market and its future. I don’t need to say more, I am sure that all of you understand what I mean.

4. Ask the banks (or friends of yours who have access to bank assets for sale). They might have opportunities waiting for you

According to the media, Mr. Isarescu acquired an apartment which belonged to Unicredit Tiriac Bank. This bank had initially provided the loan to the developer and ended up having the apartment in its property. The same bank provided a loan to the Governor of the National Bank, in order for him to purchase the property.

Many banks are willing to offer you a property of theirs with a decent discount and financing. Why is that? Because this way they resolve a problem, cash in the advance and transform a “zero producing asset” into an income producing asset. So in reality the loan does not mean extra money for them. If you have access to a bank, talk to them. If not, speak with someone who has. I think that it’s worth your time.

5. A property matching someone’s status

Mr Isarescu is among the most important people in Europe. Still he invested in a property which was not “too much” for his status. He did not choose to buy a property of 300 – 500 sq.m. He invested in a good area, a nice property, at a good price. Nothing over the top.

How many of us really buy a property which matches our REAL standards? How many of us invest in what they can afford today and not in what they dream of buying? The message is clear: If the Governor of the National Bank buys a property like this, then someone with 1.000 Euro / month salary should realize his standards and adjust to them.

This is how I see Mr. Isarescu’s announced investment. What is your opinion?