“Ilan, I'm about to sign,” Danny told me on a video call, this time from a hotel in Athens. “A whole building in Koukaki, 6 floors, and the broker showed me crazy numbers. Similar apartments are selling here for 4,500 euros per sqm. I'm buying at 1,800 per sqm, renovating at 800 per sqm, and selling at 4,200 per sqm. A profit of double, easily!”
Danny is an Israeli real estate developer who has been working with me for 5 years. He has done excellent deals in Portugal and Spain. A numbers man, precise, not one of the crazy ones. But something in that call lit a red light for me.
“The broker showed you these numbers?” I asked.
“Yes, he has a whole market report. Sale prices, apartments sold, everything. I see the potential.”
“Danny,” I said, “do me a favor. Before you sign, give me a few days to check these numbers myself.”
Digging on the ground
I have a contact in Athens, an Israeli real estate agent named Michal, who has been working in the Greek market for 12 years. I called her that same evening.
“Koukaki?” she said. “Depends where in Koukaki. There are streets and there are streets. Send me the exact address.”
I sent it. She called back two hours later.
“Tell your client to run away from there.”
The truth about the neighborhood
It turned out that the broker had done something very clever: he showed Danny real numbers, but not from the same location.
Koukaki is a large neighborhood. It has a central, upscale part, near Koukaki Square itself, where prices really do reach 4,000-4,500 euros per sqm.
But Danny's building?
It was at the edge of the neighborhood, on a side street, a 15-minute walk from the center. In an area where instead of luxury restaurants and boutique shops there are garages and hardware stores.
“It's like showing a client Tel Aviv prices and selling him an apartment in Holon,” Michal said. “Not that Holon is bad, but it isn't Tel Aviv.”
The real check
I asked Michal to prepare a real market report for me for the specific location. She came back with data that woke Danny from the dream:
The real prices in the area:
- Renovated apartments sell for 2,400-2,800 euros per sqm (not 4,500!)
- The average over the past year: 2,550 euros per sqm.
- The broker showed Danny data from a street that is a kilometer and a half away.
Time to sell:
- Renovated luxury apartments in this area stay on the market for an average of 11 months.
- There are currently 23 renovated apartments in the area looking for a buyer.
- Supply has grown by 40% in the past year.
Demand:
- Most buyers in this neighborhood are local Greeks, not foreign investors.
- They are looking for small apartments (50-70 sqm), not large luxury units.
- Local purchasing power is weak; the average salary in Athens is 1,200 euros a month.
The hard conversation
“But Danny,” I told him on our next call, “let's do the real calculation:”
His original calculation:
- Purchase: 1,800 euros per sqm.
- Renovation: 800 euros per sqm.
- Total cost: 2,600 euros per sqm.
- Sale: 4,200 euros per sqm.
- Profit: 1,600 euros per sqm (a profit of 62%).
The real calculation:
- Purchase: 1,800 euros per sqm.
- Renovation: 800 euros per sqm.
- Total cost: 2,600 euros per sqm.
- Realistic sale: 2,550 euros per sqm (if you sell at all).
- Loss: 50 euros per sqm, before taxes, commissions, and financing costs.
“I can't believe it,” said Danny. “The broker showed me...”
“The broker showed you what he wanted you to see,” I answered. “He didn't lie, the numbers he showed you are real. They're just not from the right place.”
The turning point
Danny was silent. I could see him processing the information.
“Listen,” I continued, “I'm not saying there are no good deals in Greece. There are. But they're not in this area, or they're not in the cash flow you thought.”
I explained to him that there were two options:
1. Look for a building in another area - in the real center of Koukaki, or in an area more attractive to foreign investors.
2. Change the model - instead of selling luxury, rent to Airbnb (if you get the permit) or to long-term tenants.
“But why did the broker do this?” Danny asked.
“Because he represents the seller. His commission depends on the deal. The higher the price, the higher his commission. He wasn't working for you, Danny. He was working for the seller.”
The decision
Danny asked for another week. He flew to Athens, met Michal face to face, walked around the area himself, checked apartments for sale, and talked to other agents.
He called me from the airport.
“I'm not going into the deal,” he said. “I have 4 more days to sign, but I'm giving up the deposit. 5,000 euros, cheap for me to learn this lesson.”
“It's not a loss,” I told him. “It's an investment in education. And believe me, it's much cheaper than discovering this after you've already bought.”
My lesson from this story:
Numbers can be correct and still not real.
When someone shows you a market report, always check:
- Is the data from exactly the same location?
- Is it from the past year or from 3 years back?
- Who prepared the report, and what is their interest?
And one more important thing - always check not only “how much,” but also “how fast”.
What is the point of selling at 4,000 euros per sqm if it takes two years to find a buyer? During those two years you pay taxes, maintenance, interest on a loan, and the profit evaporates.
Danny, by the way, found another project half a year later in a completely different part of Athens. This time he brought his own agent, did an independent market report, and checked everything twice. And the project? A success.
Who among you has run into a similar situation? Has anyone almost entered a deal on the basis of “pretty numbers”?
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית