1 November, 2022 seen 115In this article, I will share notes and points of interest from our latest trip to Batumi during the Orthodox Easter…
Back in Spring 2022, I come up with an idea - launching a crypto token for investing in Batumi real estate. The original idea was to issue about 100 tokens over Ethereum smart chain, collect the funds, buy the property, sell it for a profit, and buy back tokens at an increased price.
I still like this idea, and I'm still looking to go forward with it. During the past 6 months my idea didn't raise much interest, yes I had a talk with a few investors, but most were not aware of what a smart token is, so I stopped actively pushing this idea.
- High Risk / High Return Investment Opportunity in Batumi Real Estate
- Invest in Batumi Real Estate (Buying Black Frame Projects)
Recently I got contacted by a Canadian citizen showing interest in this project, but in a more traditional way, the FIAT way - I was offered to establish some kind of business partnership, with me owning 10% and partner 90% in such partnership
I'm interested in knowing more about investing in a couple of studio apartments at a bargain price working with you. If things work out okay, then I'll be able to pump $20,000 immediately and another $20k within 12 to 18 months.
After some brief thinking, I agreed on establishing such a partnership and we started to exchange emails and shaped the idea further of how it could work out in this traditional way of investing.
At the start, I was looking to establish a limited liability company here in Georgia, with both of us as shareholders in the company. Opening a bank account on companies name. Depositing funds there and then buying from the company funds some of the Batumi real estate properties. There are some cons and pros to such a partnership form. The good news is it's pretty straightforward and is possible to handle remotely (by using power of attorney). From the downsides, there comes - accounting, taxes e.t.c
Again, I think this is still an option, but as we were talking about just one property, the price tag and complexity of dealing with other things seemed a bit high. I contacted several law companies here in Georgia, asking how much they would charge for setting up such an LLC in Georgia, and was offered about $1,500 for registering the company + some $900 for opening a bank account. This seems quite a lot for a $20,000 investment
I believe I could manage to register a company in Georgia for less than $300 if done by myself, but that would ask for some time and additional learning of Georgian law.
I raised my concerns to the potential business partner, and suggested some alternative ways, as I could help with buying this property 100% in his name, taking a 5% taker fee, and when selling taking a 5% maker fee, or we could proceed with joint-ownership and an agreement between ourselves laying out all the points, like
- We are responsible for paying our share of money to the selected builder.
- Once construction is finished, we sell it at the market price; we receive our initial investment and share the profit as per shared ownership.
- Few more conditions to cover situations arising If we cannot sell within a reasonable time frame
to better answer these questions, I again contacted a few persons who specializes in Georgian law, but in the end, I understood the best would ask directly to the Real Estate Companies, and that was it - I contacted a few real estate companies I already had contact with, asked is it possible to buy property by 2 or more co-investors and register their shares in the land book. And got a positive answer. This leads me to think this is the way to proceed with such a small investment among 2 or more investors in Georgia.
My eyes are now set on a small studio (well not so small after all) about 35sqm in Batumi with a sea view (above the 10th floor) for about $800/m2. the total investment looks closer to $28,000, but I already got offered a 4% discount if we will agree to handle all the paperwork remotely. so that would get the buying price closer to $26,880 or about $768 per square meter. I believe once the project is finished, we could sell it at $1,000 per square meter, booking about $7,000-$8,000 profit.
Another feature real estate developers offers here in Georgia - interest free installements, i was offered following schedule
- 20% down payment - interest-free installments for 48 months
- 30%down payment - interest-free installments for 60 months
- 40% down payment - interest-free installments for 72 months
- 50% down payment- remaining 50 % after 2 year, when project will be finished
In short it means you can get an apartment in Batumi with about $4,000 first downpayment. Quite Awesome.
I'm open to other interesting offers and will try to find some good value deals under $700 per square meter in Batumi (and Tbilisi). In fact, I was able to find, some projects yet in the planning stadium starting at $400/square meter (Black Frames)
Interested to learn more or ready to invest with a partner in Georgia? Contact me and I will look at what can I do for you!