All Forum Posts by: Account Closed

Hi Predrag, Tore, Vasa,

Maybe a little late... but,

Every singel bank in Norway (and all over the world) are investor friendly. They of course want to lend out as much as possible as it is what they do to make money. 

But as a private RI investor in Norway you have to fulfill the criterias set by the government/finanstilsynet or else you will be automatically rejected. Not because the banks are unwilling to lend you money, but because they are not allowed to. (See bottom of post for criterias.) 

One solution is to set up a company for the purpose of real estate investing. At least thats what i did. (For flipping deals).

When the banks are lending money to a company, there are no set rules they have to follow, so they can be more flexible (But they of course need some kind of security. )

Call the B2B branch of your local bank and ask for a meeting. Present your plan in that meeting and ask what it takes to get a loan. I am sure you will find a solution. If not, try another bank (Its not really as much about the bank as it is your contactperson in that bank. Ask someone you know who has a similar company if they can recommend a B2B financial advisor.)

Then set up a company, get the loan and buy.  

Best of luck!

Br

Vegard

Lånekundenes samlede gjeld skal ikke overstige fem ganger brutto inntekt i året (inkl forbruksgjeld, studiegjeld osv)

Det skal fortsatt kreves 15 prosent egenkaptial ved kjøp av primærbolig

Avdrag kreves for lån som overstiger 60 prosent av boligens verdi. Tidligere 70 prosent.

Rammelån kan ikke gis når lånerammen overstiger 60 prosent av boligens verdi (tidligere 70 prosent).

Bankenes mulighet for å gjøre unntak utenfor kravene opprettholdes til å gjelde maks 10 (Kan bli 8 i nær fremtid) prosent av bankenes innvilgede lån.

For the Oslo area there are special rules as of right now.

Lånekundenes samlede gjeld skal ikke overstige fem ganger brutto årsinntekt (inkl forbruksgjeld, studiegjeld m.m.

Det skal kreves minst 40 prosent egenkapital ved kjøp av sekundærbolig (bolig nr 2, 3 osv)

Det skal fortsatt kreves 15 prosent egenkapital ved kjøp av primærbolig.

Avdrag kreves for lån som overstiger 60 prosent av boligens verdi. (Tidligere 70 prosent).

Rammelån kan ikke gis når lånerammen overstiger 60 prosent av boligens verdi (tidligere 70 prosent).

Bankenes mulighet for å gjøre unntak utenfor kravene begrenses til å gjelde maks 8 prosent av bankenes innvilgede lån.

Welcome Josef,

In regards to renting out small apartments, you are not allowed to rent out "borettslagsleiligheter".  (Unless you have lived there your self for years and need to move due to work, military services, sickness or other special reasons. Even then theres a timelimit for how long you can rent out your apartment.)

"Selveier leiligheter" however, you can rent out as you wish.

Heres a link to the law that regulates the use of "borettslagsleiligheter".

https://lovdata.no/dokument/NLO/lov/1960-02-04-2#K...

In regards to financing it depends if you are buying the property as a private person, or through a company. But either way I would start by asking my bank connection what it would take to get what you need and just take it from there. 

Best of luck to you!

Hi David,

In regards to Norway,

A lot of foreigners are buying real estate in Norway these days. With the low oil prices the norwegian currency is very very cheap. 

And it also goes the other way around. In 2011-2013 Norwegians bought alot of property in the US. Especially in the Florida area. 

Now its the americans/foreigners turn to make good deals in Norway. 

Today 1 USD= 8.66NOK  Except from a short period in mid 80s and early 2000, it has never been cheaper to buy norwegian currency. In 2011-2013 1USD= 5.2 - 6.1 NOK. (When Norwegians bought american property.)

Here is an article from Norways largest economy newspaper. Its from 2013 and it talks about how "everyone" is buying property in Florida. Google translate it and you will get the idea. http://www.dn.no/privat/eiendom/2013/07/16/-florid...  

Here is an article from 2015 which says that there are record high numbers of foreigners buying commercial real estate in Norway. Amongst them, Americans. http://www.dn.no/nyheter/finans/2015/04/22/2158/Nr...

Hi Jakob,

In regards to finding good deals in Oslo, a tip is to look for apartments that have previously been used as apartments for the poor by the local government. When an apartment in a government owned complex is coming up for sale in a bad neighbourhood this often means that most of the complex is coming up for sale and that usually brings the prices up in the whole neighbourhood. As an example there have been several fixer uppers sold in a complex in "Tøyen" for the last 3-4 months, and I see that these have been fixed up and is now being re-sold with an 50% price increase. Foreclosures is almost a non excisting market here in Norway now a days, the few that are foreclosures,  are sold at marketprice through an agent just like any other property.

The most effective use of your time is to get to know people who owns a lot of property and learn from them. Then you might be able to get some good deals as well through the same contacts. And of course, it also helps knowing local real estate agents.

Good Luck,

Br

Vegard

Hi Steven,

Don’t know if it’s a little too late, but let me shed some light on some of your concerns.

“678sqft 2Bedroom 1bath apartment. In great shape.”

678sqft equals 63m2. The average price per m2 in Spydeberg is 21.369kr. Since the asking price for the apartment in question is a total of 1.593.598kr, that tells me that the the asking price per m2 is 25.295kr, and may seem a little expensive. However, keep in mind that I have not seen the property.

“Asking price: Now this is where it is a little confusing for me. The actual apartment asking price is $100,000 (630,000nok) which is what we would pay to get into the place all cash. But immediately there is a monthly payment due on a loan which is assumed upon purchase for the actual Apartment Building, which is merged with other expenses for the apartment; water, garbage, television and internet(upgradeable naturally) building insurance, janitor services, snow removal, and overall grounds upkeep, and other maintenance. This payment is $1040 (6,558.00kr) per month. This loan is $152,952 (963 598kr).”

The total will be as mentioned above, 1.593.598. This type of community loan is something that became popular in the late 90s early 2000 here in Norway. The reason was that developers bought a building, renovated it and then sold it. Their costs is in the community loan, and the sales price is more or less pure profit. This however is not as common now as it was then, and if there are community loans, almost all owner communities offer individually down payment. What this type of financing does is that a lot more people will be able to buy the apartments, as the individual loans are so small that there are no risk for the banks to loan the buyer the amount they are asking. The bank always have first priority in a foreclosure, and the loss will be on the owner’s community. Unless the community is insured, which all new owners communities in Norway now by law must be. Since a lot of people can buy these apartments they are often overpriced. You must check if the owners community is insured. This is called "borettslagenes sikringsfond".
 
“All apartments are like this in Norway. What is strange (unverified) is my wife said we cannot pay this portion off early.”

As mentioned, this is not the norm anymore.

“Upon moving out, and attempting to turn this into a rental or selling; Potential Buyers and Tenants must be approved by the Apartment Building Board.”

This is important. No owners community wish to have tenants as their neighbours. Therefor by law, you are not allowed to rent out these type of apartments. There are exceptions, such as moving away, joining the military and such. However, you will need to live in the apartment one year before renting it out, and you can rent it out for a maximum of three years. There are some exceptions from this rule, contact me if you want to know about these. The approval process you are referring to is in regards to the laws mentioned.

“More Problems: No property management company to speak of. In my search I have yet to find one that actually is a 100% service. Several will let you list your property on their rental sites for a fee. So living 6000 miles from this property already seems a deal breaker.”

There are many options here. The biggest property management company for private property in Norway is www.utleiemegleren.no.

“Plus sides : There are no available rentals in this property's town. None. But there are several houses for sale, but no other apartments. This area is desirable. Comparable apartments rent for $1507/month (9500kr)”

The reason for that might be because “Ostfold” is not the most desirable place to invest in rental property, as the increase in prices here is less than the national average. But this might of course change in the future.

In general there are few risks involved in buying property in Norway as it is one of the most regulated and transparent markets in the world, but its important to know what you can do with the properties in regards to renting out, developing and such.

Hope this was of some kind of help even though I came in a little late.