With no end in sight to Kyiv’s soaring real estate prices, Ukrainians may consider buying property abroad.

In addition to the widely advertised villas of Cyprus or Spain, well-off Ukrainians have the option of purchasing a home away from home on the other side of the Atlantic, in sunny Florida.

When asked why a Ukrainian would want to invest in property so far away, Laszlo Kovacs, a naturalized American citizen born in Hungary who owns Florida Investment Marketing Inc, a Florida-based real estate broker that caters to Eastern European customers, is unequivocal.

“It is like buying a Bentley, instead of a Zhiguli or Volga,” he said.

“Florida has a fantastic climate, entertainment, amusement parks. If it were a separate country, it would be the third or fourth richest country in the world,” Kovacs added.

Irina Norrell, director and co-owner of Florida Investment Marketing’s Kyiv office, which opened in November of 2005, dismisses the common stereotype of Florida as a haven for retirees. To her, Florida is first and foremost about chic and glamor.

“I guarantee you, if you go to Miami, you won’t see a single retiree. You will see celebrities and very rich people. The elderly reside in the Gulf of Mexico area.”

What’s more, according to Kovacs, you don’t have to be a millionaire to afford to buy property in Florida: the lower end of the real estate market there is in the $150,000 range, and one can live comfortably with an annual income of $35,000.

Kovacs said his company encourages its clients not to pay for the property they buy upfront, but instead to take out a mortgage loan in the U.S.

“Paying 100 percent of the price upfront is likely to raise the suspicions of the U.S. authorities,” said Norrell, a naturalized American citizen born in Moldova and currently residing in Kyiv.

According to Florida Investment, mortgage terms for Ukrainians in the U.S. are highly attractive.

Norrell said that a Ukrainian could put up a minimum of 20 percent of the house’s value, then pay the rest in monthly installments for up to 30 years at interest rates of 3.5 to 7 percent annually.

According to Florida Investment Marketing, prospective Ukrainian buyers could obtain a mortgage in the U.S. with letters of reference from their employers and banking information from a U.S. account.

An employee of the Florida branch of the Bank of America said that his bank would give no loan to a person who doesn’t have permanent residency status and a credit history in the U.S.

Chris Babcock, as associate at E-Loan, an online direct lender, told the Post that to be considered for a mortgage with his agency, a Ukrainian citizen would have to have a green card and at least three different lines of credit in the U.S., regardless of the state where he is eyeing property.

Kovacs said these financial institutions lack flexibility in their lending policies and gave assurances that a Ukrainian client could easily get a loan through the lenders he works with.

Claus Rodenbostel, a mortgage broker with a Florida-based mortgage agency called Sky Financial, which works with Kovacs’ company, said that Ukrainians get lower interest rates because they put up larger down payments. According to him, the average first-time American buyer puts up no more than 10 percent.

Kovacs said that Florida Investment Marketing’s turnover for 2005 was $250 million, adding that in addition to its Ukrainian office and headquarters in Tampa, the company also has branches in Romania, the Czech Republic, Slovakia, Russia and Hungary.

Jiany Massad, the owner of another real estate agency called Florida Realty Finder, said that in the last three to four years he has seen considerable business from Russia and neighboring states, with the average purchase price being around $400,000.

Just like Kovacs, Massad does not see any serious problem in getting a non-resident his first mortgage loan in the U.S. The only complication, he said, is that the interest rate an applicant would have to pay could be up to 15 percent.

Massad said it is quite unlikely that a foreigner would get a loan for any less than 10-13 percent.

“The average American cannot get one for less than 6 percent.”

Massad said that brokers offering lower interest rates might simply add let the real interest accumulate and tack it on later.

“They are taking it and adding it to the pile every month. You end up paying a huge amount of interest that you still hadn’t paid,” he said.

Rodenbostel said that this is also not a problem if the buyer plans on reselling the property in the near future, as real estate prices are going up.

Kovacs said that his company gets the most business at their Hungarian and Czech offices, but the Russian and Ukrainian offices post the largest sales volumes, with an average transaction of $500-600,000, almost double the Hungarian and Czech figures.

Kovac said he couldn’t give specific information on his East European clients, citing the company’s confidentiality policy.

“People who we are dealing with meet us at hotels, restaurants or coffee houses. As you understand, they just do not want to be seen.”

Norrell described her clients as “mature people for whom a Florida house wouldn’t be the first one.” She could not disclose the biggest deal that her office had ever handled, but Kovacs described it as “a nice and cozy house in the area of a couple of million dollars.”

But in order to live in their new Florida homes, Ukrainian citizens will have to at least get long-term visas.

Kovacs said his company submits a recommendation to the U.S. embassy, which facilitates the application for 10-year U.S. visas.

Vadym Kovaliuk, an employee of the U.S. Embassy’s press service, said that a visa applicant’s ties to the U.S. should be less than those in Ukraine, or it might complicate his chances of being issued a visa.

"In general, Ukrainians should be very wary of anyone guaranteeing any sort of U.S. visa assistance," he said, adding that the U.S. issues visas for a maximum period of five years.

“I do have personal experience of people getting a 10-year, unlimited visa for the U.S., therefore, it’s quite a possible scenario,” retorted Kovacs.

by Vlad Lavrov, Kyiv Post Staff Writer