A quarter past midnight. Just finished carrying a washing machine to the 5th floor. I’m jotting this down before a 4am departure for my 6am red eye flight to London so I don’t forget. Why am I sharing this story? Because this piece of work defines the sort of team we have & the lengths we go to when up against adversity, to assist clients.
3 months ago an Irish client came to me to ask me to sell his property at 20% below market value because he was exhausted by continually being burned in his Romanian real estate venture. In this case partially at the hands of a locally based Irish property management company & partly at the hands of bad tenants. After 5 years of ownership he remained with a run down, tired & broken apartment in Dimitrie Cantemir street, off Unirii Blvd with the most horrible quality & poor condition furniture you could ever imagine.
He told me he had a buyer for 44k, so we checked the value against nearby properties & the cheapest we could find like his was 20% more expensive. I could see that he was a defeated man. I suggested he let me try to manage it for 3 months for free & in that time, seek a tenant. He gave me a budget of 1000e to facelift it.
So on our next weekly trip to Bucharest, we visited the apartment to be greeted by a depresing sight: a smashed bedroom window, destroyed mattress, 300e of unpaid bills. building admin bill raging out of control. I began to fully understand why he was a beaten man. We set to work. Almost every member of the team felt personally that they wanted to help this man.
The team cleared his bills, re established good relations with the building administrator, got the utilities reconnected & set about advertising the apartment in every way we knew. Our site, other free sites, premium adverts, banner, expat website sites, other agents & facebook. Around a few weeks later I had a mail from a very nice chap from Devon, looking for a flat in exactly this street since he was moving from the UK for good to be near his girlfriend. But it needed to be top spec, no rubbish, & fairly priced. His girlfriend in the next street was also looking for a nice place for him so he made no commitments. But I established a good rapour with him & assured him of our fullest support in his move over here & to furnish the place to his tastes if requested.
In the mean time, Alex & Marius on the maintenance team put in a solid weekend painting for 18 hours straight in early January, while here on another furnishing job across town, simply to quickly facelift the apartment ready for viewing. In fact, it made the place look worse momentarily. It made the furniture look what it was, totally rubbish.
Last Sunday, Feb 2nd, the Devonshire client flew into Bucharest & came to see the apartment. After agreeing with the Irish owner, I suggested to the tenant that if he would accept the apartment, at a reduced rent, we would reinvest all of his rent to immediately upgrade the apartment, starting with the bedroom, then lounge, then kitchen, then finaly the bathroom.
His feedback was ‘its a long long way from what I want. To be honest, its nice to work with you, easy etc & I feel bad telling you, but I don’t have time to start a relationship with you that will see me living in a building site for a year, so respectfully, I am going to look elsewhere. If you can find the money from the owner, & can do the work without my rental income, call me when it is done & we will talk again’.
He only wanted a 3 month rental to start with, to see if his new life would work out or not. I assured him, he would really struggle to find a willing owner to agree to 3 months, but this owner would agree & would reduce the rent to 70% of the correct price, until at least the bedroom & living room were right up to scratch. He went away to think about it for a few days.
In the mean time, I put some spare money I had into the apartment, furnishing the living room & adding curtains to the bedroom & lounge, & changing all the lights. 4 days later, today the tenant rang me to say, he had chewed it over & if the offer of rising rent in line with improvements was still on the table, he’d like a second look. I set up a viewing for him, even though we are based in Brasov & 10 short minutes later he called to say how different the place looked since he saw it on Sunday & that he would like to commit to 3 months. He sent me 3 moths rent via bank transfer. I called the owner to update him. I then called the furniture guy & negotiated that he would make the bedroom furniture at cost price only & wait 3 months or more for his profit, so that we could get the apartment up & running without bleeding the limited income necessarily. The tenant requested that if he moved in, he wanted a brand new mattress, new washing machine & within a week a completely new bedroom wiht curtains etc & within another week, the lounge should be finished. The money available would only just cover this. To finished the kitchen, we agreed we would wait for the tenant to agree to a further 3 months rental. This is something we will look at in 2 months time.
Despite having a flight at 6am on Friday, 5 hours from now, I headed down to Bucharest with the company van, stopped at Hornbach & bought 2 sets of really sexy wallpaper, for the lounge & bedroom. Then onto Carrefour just before their 10pm closing to buy a washing machine, the best I could get in their sale, 7kg, 1200rpm spin, Indesit, plus a new mattress. I squeezed these into the van, drove them around to the flat. The tenant kindly helped me lug these up to the 5th floor. We shook hands & bid farewell. Tomorrow mornign he moves in. He has seen we did what we promised, regardless of the time frame or hour of the night. I am away in London for 3 days & have a busy Brasov diary next week, so it was important to get this done today so the tenant can move in tomorrow & not get cold feet or find somewhere else.
This Saturday morning, Alex will come down by minibus from Brasov, work through the weekend to add the wallpaper & change the lights. Next week a local painter will paint the kitchen. Next weekend the furniture maker, Adrian, will completely renew the bedroom, making the furniture in Brasov & transporting it down to Bucharest.
So in conclusion, the owner has not needed to send any money so far & will only need to send 1000e. The tenant has also paid a similar amount & we will have spent probably 3000e at-cost, with no profit to us (we will add our small commission onto the furniture much later when there is an income that is not needed to put back into the property, but now is a time to use all available money to put into the apartment & not dilute it).
The owner now has a very happy tenant, pleased with his reduced rent & the commitment of the owner to make the place much smarter. He has seen our commitment to assist without charge. This is not an unusual case. I have helped many owners out like this when they had no available funds but needed to make improvements in order to find a tenant. This is what makes WM different. Its a pleasure to help out an owner in need, not for profit, but because we have the skills & experience to take a bad condition property & turn it around, at cost price, find a good tenant & use the income to recover the investment, then & only then, take our 10-15% project management fee.
I am confident there are precious few other property managers or real estate agents in Romania or elsewhere who are willing to do such a thing.
I hope to be showing you a video on a few weeks of a fantastic looking apartment when it is nearly finished.
Here are 2 others which followed exactly the same pattern. No investment from the owner until the places were completely renovated. In both cases, they lay un-rented for years before we were asked to get involved.[youtube]http://www.youtube.com/watch?v=gTYZLot0rqs[/youtube][youtube]http://www.youtube.com/watch?v=F5ezRnpuAi8[/youtube]