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Buying property at the Bailiff / Enforcement Agent Auction (Komornik Sądowy) in Poland

Buggsy 8 | 98
25 Apr 2016 #1
So, I'm up for one of them listed properties. I've read the conditions but still a bit puzzled coz there's too
many details missing. If there are any who have bought from the same auction I'll be greatful
if you can fill me in on some of the questions I have.
When the deposit is paid, coz they ask for deposit upfront, will it be refunded straight away if
offer is not accepted?
What other fees am I liable to if offer is accepted?
Is the bidding process just one offer written in an envelope and highest offer wins
or it's like at a normal auction where you can bid against other punters?
Are second listed properties full of pitfalls?
25 Apr 2016 #2
good luck! I take it you speak fluent Polish and/or have a business partner or family connections. I trust that you are au fait with the Polish property market and are lawyered up. You have a solid business plan and concept of what your end goal is and are a cash buyer. Otherwise, you are probably either going to get f*cked or f*ck yourself, either way tantamount to the same thing. I have seen Expats f*ck themselves before and it is not pretty. I would be hyper aware or instantaneous changes in property laws. They have already started on arable land and compulsory purchase order provisions. Be absolutely in the know if the subject of local council ground rent is mentioned. Utilities and access to them. The surrounding area, is it dilapidated or tidy? How far said property is from the local services etc etc.

I admire your intention and wish you good luck.

My err of judgment came when I bought a piece of building land in the countryside for a really good price and then afterwards a year or two later I thought to myself, Why the hell would I want to live in the middle of the countryside in rural Poland, seriously WTF. I don't hunt, I don't fish, I like nature but I am an urbanite. Anyway, the moral of that story is be careful what you dream for because you might just get it! And then what?
OP Buggsy 8 | 98
26 Apr 2016 #3
To Chłopek2: Judging by your language you sound like a young person (below40).
I appreciate your advice but I've been there and done that.
I'm just looking for someone who has been to Komornik Sądowy auction to purchase a property.
To be a bit specific: It's not my first buy in Poland, I haven't just got off the plane, I don't use kredyt hipoteczny and it's just a city flat.

Would like to hear from Polishinvestor and others who have actually bought through this way.
Thank you.
cms 9 | 1,255
26 Apr 2016 #4
I can answer only one of your questions - I did unsuccessfully bid on a place and my deposit was returned without hassle - I think I waited 7 days for it.
jon357 74 | 21,955
26 Apr 2016 #5
I don't use kredyt hipoteczny and it's just a city flat

Someone once suggested that I did this a few years ago - the price range seemed great; the issue was the form of ownership of the flat - just too risky, plus I dislike sealed bid auctions. That and someone wanted money for 'helping'.
26 Apr 2016 #6

I have bought four properties at auction. Two turned out good, one took 12 months to complete and the last I am still trying to get the former owner removed two years down the line. when you buy at auction you also accept to take on the problems of the previous owner/tenant. Mostly they are bitter/twisted individuals who do not care that you are the new owner. As a form of warning, if the property can be bought at 50% of valuation expect a further 15% in lawyers fees, also anticipate in your business plan two years before you take full possession. If the numbers add up its a good deal.
OP Buggsy 8 | 98
26 Apr 2016 #7
To LondonNorf: Which type of ownership has been the most difficult you've had to deal with and which would you avoid in the future?

Is a lease of less than 90 years too risky? Is a second listed property a red flag?
I have bought in the past mostly from housing cooperatives (spółdzielcze własnościowe)
and have never had many problems with the whole process. The first property involved a family fued where the first of the siblings
was sensible and the other was a real pain but when a property is about to be repossessed, somehow they always come round.
50% of the true valuation- I have never been involved in such and would be wary of that.
The property I have my eye on is from a debtor. The details from the Bailiff's office and housing cooperative do match.
The Bailiff has a good reputation and opinions I have read are quite positive.
The previous owner is in the process of moving out. Only worry is if there are pitfalls and the competition from others.
polishinvestor 1 | 361
27 Apr 2016 #8
Over the years looked at a few properties under the hammer so to speak but never interested me enough to bid for one, so cant offer much help. I would say be wary and do a complete check of every possible detail/variable as I have heard of gminy leaving out various details and people ending up with listed properties resulting in vastly increased turnaround costs. But there are so many great properties available via traditional avenues, its never really been a problem for me finding a good deal. Especially lately, its a buyers market and will be for some time so you can offer well under the asking prices which are often very unrealistic. Many have a noz pod gardlem as they say so its always worth a shot. And buying cash means you can press even harder.

Re leases if its from the local council you can usually buy them out if you plan on holding the property for a period of more than 10 years.
OP Buggsy 8 | 98
21 Apr 2017 #9
Just coming back on this one for some who might be considering going down this way.
First of all, it's much better when buying cash- with the banks don't even think about it, if the property
is at the bailiff's. I had to do it the Polish way. I spoke to the bailiff before the day and he advised me on what to do.

I got the keys 2 months after purchase, did some D.I.Y over a few weekends and now
there are 3 happy students renting the flat.
spiritus 69 | 651
21 Apr 2017 #10

What's the buy to let market like in Poland ?

I have always been tempted but friends and family have put me off saying it can often be a legal nightmare with tenants.
21 Apr 2017 #11
it can often be a legal nightmare with tenants.

The trick is to rent your flat out as commercial space, i.e. an office. You stick a clause in the agreement saying that anybody living in the flat is grounds for termination with a month's notice and then when you want them out, they're out.
spiritus 69 | 651
21 Apr 2017 #12
I don't quite follow.

Rent a residential apartment out but mark it down as a commercial space. Advertise for tenants but they have to agree that they cannot legally live there and if they do then I can serve one month's notice ?

Are any laws being stretched with this scenario ?
21 Apr 2017 #13
Rent a residential apartment out but mark it down as a commercial space.

You rent out the flat as office space. In the agreement you specify that nobody can sleep there and the tenant agrees to that. You can verbally tell them that in the past you worried about trying to evict people who lived in your flat so you're renting it as an office but then make it clear to them that if you do discover somebody is sleeping there, the minimum notice period is a month.

Are any laws being stretched with this scenario ?

No laws being stretched and with a contract saying they aren't allowed to live there, it would be hard for them to claim that they do have the right to live there.

Another solution is to rent as a residence but for the tenant to provide a signed statement with an address to which they agree to be evicted to. The downside there is that you still need to evict them. With a B2B office rental agreement you can just change the locks.
OP Buggsy 8 | 98
30 Apr 2017 #14
What's the buy to let market like in Poland ?

Sorry Spiritus I don't come on here that often- gotta work.
The market for buy to let isn't that profitable as long as you buy with a mortgage or use estate agents. You need to know how things work in this industry first. If you are buying cash then it's worth considering.

If you wanna start you can buy in small towns for less than 200 000zl and that can bring you a rental yield of about 6%. But be aware that if you don't know much about how things work around here you might not make that.

Good small towns are those that have growing industry and young population looking for good property to rent.
spiritus 69 | 651
2 May 2017 #15
If you wanna start you can buy in small towns for less than 200 000zl and that can bring you a rental yield of about 6%

Thanks. 6% is pretty low though :(

Any experience of property flipping ?
delphiandomine 88 | 18,163
3 May 2017 #16
There's not that much liquidity on the Polish market, so I wouldn't place much in it. You could do well by looking into so-called 'mikroapartamenty', as these are likely to go up in price if they're located in good areas, and you could probably get good yields on them from all the korpoludki moving to Poland.
terri 1 | 1,663
3 May 2017 #17
Buy to let property must be considered as a long term investment.
If you buy a place (house/apartment or anything) and then sell it within 5 years, you will be liable for tax on the difference in price. The 5 years starts being counted from the end of the year in which you bought the property and it must be 5 years.

When buying any property it is worth keeping documentary evidence of all expenses. This may just help in the future.
OP Buggsy 8 | 98
3 May 2017 #18
Any experience of property flipping ?
Flipping legit ain't worth it. They will tax you so much that you'll end up with a loss.
On the other hand if you have deep pockets and surround yourself with the right people
yes,you can flip houses.If you've never lived here don't expect anything like you watch on
TV programmes or the same way you flip houses in the UK. Poland is a very punitive country.
If the buyers were mostly cash buyers then you would make something but unfortunately
they all have to apply and register their mortgages.

If you buy now it's a good time coz rentals for students, Brexit returnees and well paid employees from multinationals
that are setting up base in the country are going up. Good example is Jawor- an almost abandoned town before Daimler
came to the rescue with a new plant. It's still quite cheap to buy and I can tell you that rental yields will go up significantly

before them developers start building new blocks. You can build a potfolio but keep in mind the time frame when it comes
to the value and subsequently the taxes.
16 May 2017 #19
I would be wary of smaller towns, certainly unless you have some experience. Things can change quickly and the local market will quickly stagnate. I found it pretty difficult to beat 10%, while high single figures can be achieved certainly in commercial in the biggest cities still, although yields are getting squeezed as prices go up given the interest in Poland especially over the last 6 months. Residential yields are less at around 5-7%, but that said, you will be able to sell faster if/when the time comes. I think I read somewhere about half of flats purchased in 2016 were cash transactions, which means a lot have been bought as an investment and investors with larger pockets tend to stick to the more liquid bigger cities.
OP Buggsy 8 | 98
17 May 2017 #20
I would be wary of smaller towns, certainly unless you have some experience

Well, doing business in Poland ain't for the faint hearted. Buying property in the whole country, commercial, residential or agricultural, is an adventure
with many pitfalls for the locals and foreigners alike. I would never advice a foreign novice to buy commercial and then let out to " Polish businessmen".

That's the worst start. If Spiritus has some experience or has lived in Poland long enough, should know how things are done.
My first property, bought about 14 years ago in a small town, is still my biggest earner. The town is developing and them Germans are investing big.

The rental on short term leases goes up every year by 10%. Whereas the other property in Warsaw doesn't yield much coz of new developers

who overbuilt in my area and villages that where on the outskirts. Flipping it would give me a good yield but I'm in for the long run.

Rentals are not based on interest rates or economic situation but by how much the place is sort after. During the so called crisis from 2007 to 2008, I managed

to raise my rentals by the usual 10% without any problems.In big cities, they are usually overpriced and if you buy blindly, you will be lucky to make a yield of 5%

My colleague was buying commercial targeting banks, chemists and businessmen but he's had so many problems that he's now renting "rynek property"
as residential from ground floor to top floor.

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