INVESTOR PROFILE: Alex Hobincu

Native Romanian and RoundTable Mastermind Group member Alex Hobincu has developed strategies that work both at home and away. His latest is project is certainly a step up though, we found out more…

Spotting opportunities and grasping them is at the heart of what has given Alex Hobincu his success in property.

Having moved to the UK 14 years ago Alex tells us how he made his start as a labourer. It was quite the leap leaving Romania with only one friend in the UK but it seems to have paid off! ON THE HOUSE Magazine sat down with Alex to discuss his property journey to date and what the future might hold for him.

One of Alex's early UK commuter town investments

LAYING THE FOUNDATIONS

“I started as a labourer in a UK construction firm, I went through the ranks, saved money and started investing it in Romania during the recession, buying my first property in 2012. I bought about 50% under the asking price,” explains Hobincu.

It was a cash deal which, as the property market was still trying to recover, was seemingly perfectly timed to pick up a bargain. It sounds like

the classic case of a motivated seller and a buyer not having to rely on a mortgage.

“That was my first taste of real estate, my first negotiation.” A taste that clearly lingered for Hobincu.

“I bought my first property in the UK in Romford, it was a one-bed house, £150,000 house with two massive trees right in front of it. The seller couldn’t sell it but I did some shopping around and managed to find an insurance company that would insure it. The asking price was £200,000 but I got it for £150,000 after a few of his sales had fallen through. I fully redid the property, gutted it, new glazing, took the trees down, everything I could do to maximise the profit. Complete revamp. One year later I got it revalued at £220,000 and I was able to release about £45,000, added some savings to that and bought another property down in Kent.”

SPOTTING OPPORTUNITIES

Alex invested in towns within Kent that he viewed as those with the potential to be commuter towns for London.

“A lot of people think some of these towns are a bit run down, but I’m looking at the transport. From Rochester, it takes about 40 minutes to central London, and you have the option to go to anywhere in London. I realised these sorts of places could potentially become commuter towns over the years.”

He is now evolving his strategy to include both investments here and at home and has scaled his ambition too.

“I’m trying to split my focus between [Romania and UK]. I recently bought a warehouse in Romania, 400 square metres sitting on about 1,000 square metres of land. I’m planning on converting that into properties of mixed usage, both commercial and residential. There will be a restaurant with flats above, next to a number of terrace houses and then parking spaces. I’m also currently looking at trying to buy the land next to the plot, about 500 square meters, to do another three houses... All connected by an access road.”

The plot in Romania

Not only is it a much bigger project than he has previously completed but it is also going to be challenging to manage from the other side of Europe. He does though, have family on the ground who are helping.

“I’m building for about €500 per square metre for a high spec finish. In the UK it would be anywhere from £1,800£3,300 for the same spec, depending on if you were selfmanaging or not.”

Splitting his focus between the two poses the obvious question, what do the returns look like for each?

“I expect between 9% and roughly 12% yield in Romania, whereas in the UK, at the moment I’m looking about 5.5-6% yield on standard BTLs [in Kent].

“Interest rates I’m looking at are around 6.5% in Romania (at the time of the interview).

“The good thing about the UK though is capital appreciation. That’s my capital appreciation machine, with less yield. Romania is the yield machine and I’m less bothered about capital appreciation.”

ADAPT AND CONQUER

Alex tells us how he was able to lessen the impact of interest rates across his portfolio - both recent changes and future changes.

“I started looking at fixing my rates that were ending in the next year or so and have been paying ERCs to lock in new rates since the beginning of 2022. It’s something I started doing based on the RoundTable Mastermind Group, where in our discussions, I could get a feel of the market sentiment, the direction it’s going… Many landlords didn’t have provisions for the situation we’re in now. They have properties that at 6% interest are starting to give them a wake-up call. They’re paying out of their pocket because their properties don’t earn enough.”

So, what do you feel the future holds for you?

“I’m going to try to reduce my investment in Romania and get the money into the UK. I’ve sold a few properties recently there and brought that over. But it’s been quite difficult using that money, the solicitors have been asking loads of questions despite it all being there and clearly legit. A few lenders haven’t accepted it. I’ve found that frustrating. I changed brokers, to the BTL Group’s preferred partners Ramsay & White who have helped.

“I’d like to add two more UK properties this year but it has to be the right deal. And complete the Romania project.”

What is the most important lesson that you have learned in your time investing in property that you would like to share with newbie property investors?

“The government are so tough on landlords now, take every advantage you can. So many landlords leave money on the table because they don’t have the right structures and advice in place. Speak with a good accountant, get that aspect handled.”