Cyprus-Forum.com

[miltiades]

Right now Covid 19 will push many businessess into bankrupsy, businessess short of cash and heavy exposure to debt.
The financial markets have reached levels below those reached in October 1987, black Monday. I was rather lucky that I got out some 2 months ago retaining just one which is way down.Had I borrowed money in order to invest and ....make money I would by now be having .....kittens.
Creditors will not be interested in helping out they just want their dosh back
I wonder how many will ho down here in Cyprus. Sky scrapers offering appartments for sale starting at 1.35 million euros !!
Well its highly unlikely that Chinese or Russians will be quing up to ...off load their dosh. As for hotels offering special offers right now starting from 235 euros per night
And Spaghetti with lobster sauce at 45 euros, well , apart from the many hotels owned by the Church of Cyprus, the rest will be in for a hard time. Good luck to them all !!

[Paphitis]

Right now Covid 19 will push many businessess into bankrupsy, businessess short of cash and heavy exposure to debt.
The financial markets have reached levels below those reached in October 1987, black Monday. I was rather lucky that I got out some 2 months ago retaining just one which is way down.Had I borrowed money in order to invest and ....make money I would by now be having .....kittens.
Creditors will not be interested in helping out they just want their dosh back
I wonder how many will ho down here in Cyprus. Sky scrapers offering appartments for sale starting at 1.35 million euros !!
Well its highly unlikely that Chinese or Russians will be quing up to ...off load their dosh. As for hotels offering special offers right now starting from 235 euros per night
And Spaghetti with lobster sauce at 45 euros, well , apart from the many hotels owned by the Church of Cyprus, the rest will be in for a hard time. Good luck to them all !!

I think creditors will be hard pressed taking any business to the wall at this time if they are forced to shut.

In Australia, the Government will hit them with a Royal Commission and they will lose customers left right and center.

It would become a PR disaster for any Bank who plays hardball right now.

In addition, there are laws here where businesses can plead hardship and ask for a temporary suspension of payments which can be for as long as 6 months. The banks are not allowed to do anything.

Sometimes is better to shut up and actually work with people than take them to the wall and deal with the public outrage.

It’s will be the same with families that have mortgages on their one and only home where both adults are forced on leave. It will become outrageous for any Bank to turf a family on the street.

I guess we should all be thankful you are not in charge of our Banks and fo not work as an accountant.

It’s mandatory here for Banks to have proper policies on compassion and hardship.

Banks will even suspend payments if your wife gets pregnant or if the bread winner becomes ill.

[miltiades]

Yes understandable. But if banks dont get their money surely they them selves could go bust !!
I foresee huge financial difficulties here in Cyprus mainly with tourist orientated businesses such as hotels restaurants not forgetting taxi drivers.!! The adverse affects of this virus will have repercussions throughout the business world. At least Cyprus is part of the EU and the MIGHTY euro !! God help the UK !!

[Paphitis]

Yes understandable. But if banks dont get their money surely they them selves could go bust !!
I foresee huge financial difficulties here in Cyprus mainly with tourist orientated businesses such as hotels restaurants not forgetting taxi drivers.!! The adverse affects of this virus will have repercussions throughout the business world. At least Cyprus is part of the EU and the MIGHTY euro !! God help the UK !!

Err no. Our banks are profiting over 2 billion each year. It will take a lot for them to go bust.

They probably have more to lose from harassing people in trouble during this time of the Coronavirus crisis. They are probably more concerned with buying as much USD, Swiss Francs or Gokd right now to protect their balance sheet. It is here we they can go bankrupt.

Our banks here are very strong.

Throwing the Smith family out on the street at this time isn’t the kind of image they will want.

[Paphitis]

Yes understandable. But if banks dont get their money surely they them selves could go bust !!
I foresee huge financial difficulties here in Cyprus mainly with tourist orientated businesses such as hotels restaurants not forgetting taxi drivers.!! The adverse affects of this virus will have repercussions throughout the business world. At least Cyprus is part of the EU and the MIGHTY euro !! God help the UK !!

Speaking of finance Milti, I want to tap into your Accounting expertise.

Let’s say you have person A, with a family and is working earning a good wage.

He owns his home. Also owns a couple of rentals.

He buys some land which he can subdivide into 3 lots and the plan is to build 3 houses. All approvals are in place, and the individual has experience in developing a few properties here and there.

Only problem is he needs 2 million to build and doesn’t have it.

Is he better off not building or borrowing the money to build the 3 houses which let’s say will be worth 2 million each.

So my question:

Should person A borrow 2 million and press ahead and end up with 3 assets worth 6 million?

And if yes,

Should person A sell 1 or all, or rent all 3 for $1000 per week?

What do you say as an accountant?

[miltiades]

Right now my advice is to sit tight.
Alternatively get shot of the plots to someone wjo can afford to develop.

[Paphitis]

Right now my advice is to sit tight.
Alternatively get shot of the plots to someone wjo can afford to develop.

What do you mean get shot and who said he can’t afford to develop?

Let me repeat it once again.

Person A is asset rich with a nice home, a few rentals earning residual income plus his excellent wage.

He has a plot that is freehold and can subdivide into 3 but needs 2 million to see the project to lock up, final fix and land scaping.

If he borrows the last 2 million to finish the project he ends up with 3 assets on 3 titles worth about 2 million each.

Should he borrow the money if the banks deem him credit worthy and build or should he not borrow the money and not build?

And if he builds, should he rent the 3 houses for $1000 per week, sell 1 and have 2 left over freehold or sell or 3 and cash up?

And if you deem that he sit tight, should he sell the plot which he owns freehold or should he sell it because what’s the point when you think he can’t afford to build?

[Kikapu]

Right now my advice is to sit tight.
Alternatively get shot of the plots to someone wjo can afford to develop.

What do you mean get shot and who said he can’t afford to develop?

Let me repeat it once again.

Person A is asset rich with a nice home, a few rentals earning residual income plus his excellent wage.

He has a plot that is freehold and can subdivide into 3 but needs 2 million to see the project to lock up, final fix and land scaling.

If he borrows the last 2 million to finish the project he ends up with 3 assets on 3 titles worth about 2 million each.

Should he borrow the money if the banks deem him credit worthy and build or should he not borrow the money and not build?

And if he builds, should he rent the 3 houses for $1000 per week, sell 1 and have 2 left over freehold or sell or 3 and cash up?

You left out at what interest rate the bank will charge you on the 2 mil. Also, what will be the total investment to build the 3 units?

[Paphitis]

Right now my advice is to sit tight.
Alternatively get shot of the plots to someone wjo can afford to develop.

What do you mean get shot and who said he can’t afford to develop?

Let me repeat it once again.

Person A is asset rich with a nice home, a few rentals earning residual income plus his excellent wage.

He has a plot that is freehold and can subdivide into 3 but needs 2 million to see the project to lock up, final fix and land scaling.

If he borrows the last 2 million to finish the project he ends up with 3 assets on 3 titles worth about 2 million each.

Should he borrow the money if the banks deem him credit worthy and build or should he not borrow the money and not build?

And if he builds, should he rent the 3 houses for $1000 per week, sell 1 and have 2 left over freehold or sell or 3 and cash up?

You left out at what interest rate the bank will charge you on the 2 mil. Also, what will be the total investment to build the 3 units?

Interest rate 5% interest only and no mandatory principle payments but voluntary down payments of principle are allowed.

So costs of about 100K per year once complete plus council rates, water rates, taxes, and insurance.

[miltiades]

Opposite my residence there are 4 " houses" semi built Just shells
Developer couldnt afford to complete and the bank repossesed. I did at one stage consider making an offer.then I said to my self why on earth!! I dont need them. Of course now i may reconsider following my ....dear friend's offer to lend me 1000 quid interest free