“Ilan, I found an apartment a third below market price. I just need you to go over the contract. Quickly, before someone else snaps it up.”
That is how my first conversation with Yossi opened.
Yossi is a veteran real estate investor on an Israeli scale. He started his path in Beer Sheva, in one neighborhood that he knew street by street. Field tours every week, conversations with brokers, an ear to the ground. He was looking for one thing: apartments below market price. Bargains.
And the method worked for him. Within two years he bought several apartments at prices that made everyone who saw the numbers raise an eyebrow. Then he moved on to other cities, completed more deals, and built confidence. In his eyes, he had cracked the code: find what others don't see, buy cheap, earn the gap.
Now he wanted to do the same thing, only bigger. Abroad.
He arrived in Bucharest, and within a week found what he was looking for. A three-room apartment in the city center, an old building with high ceilings, walking distance from everything that matters. And the price, tens of percent lower than similar apartments in the area. He did the math ten times. The yield on paper was a dream.
“It's exactly like Beer Sheva,” he told me. “Everyone looks at the new and shiny projects, and no one looks at the old buildings in the center. This is the inefficient market I know how to exploit.”
I asked him for two days before he signed anything.
The check didn't take long. Our team in Bucharest examined the building, and what came up explained the price in one sentence.
The building is classified in a seismic risk category. In Bucharest there are old buildings that received an official classification as prone to collapse in a strong earthquake, and some of them bear a prominent red marking on the facade. Yossi, by the way, saw the marking on his visit. He simply didn't know what it said.
The locals know exactly what it says. That's why they don't buy there. That's why it is hard to nearly impossible to get a mortgage on such an apartment. That's why quality tenants skip the building, and on the day Yossi wants to sell, the only buyers who will be interested will be more foreigners who can't read the mark on the wall.
We met on Zoom and I presented the findings. He was silent for a few seconds, and then said a sentence I remember to this day:
“Wait. So the price was right.”
That was the moment the penny dropped. Not “I missed a detail.” Something deeper: the price was never low. It was accurate. The local market priced this apartment exactly according to what it is - a property with a problem that everyone in the city knows about. The discount Yossi thought he was getting wasn't a gift. It was advance payment for a risk he didn't see.
I think about that conversation a lot, because Yossi didn't err out of inexperience. Quite the opposite, he erred because of his experience. In Beer Sheva the method worked, because there he was the local. He knew the neighborhood better than the sellers. In Bucharest he was exactly on the other side of the same equation: the foreigner who doesn't know, facing an entire market that does.
And this is the principle I return to again and again, in every country: the market knows how to assess what an apartment is really worth. When a property sells at a very low price relative to its surroundings, the price is not low. It is too low. And there is always a reason. In Israel you will sometimes find it yourself. Abroad - almost never.
Yossi didn't sign. He lost two days of enthusiasm, and saved himself years of a stuck property. A few months later he bought another apartment in Bucharest, at full market price, in a building that passed all the checks. “Less sexy,” he told me at the signing, “but this time I know exactly what I bought.”
If you are offered a property abroad at a price that sounds too good to be true, don't ask how much you're saving. Ask what the locals know that you don't.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית