Notes From Hairenik
April 3, 2006
Although I began to think it was a silly notion to consider purchasing a home given today’s obscenely inflated real estate market in Yerevan, my wife and I are still looking around. On Friday we saw a home located on Marshal Baghramyan Avenue that has huge potential. The apartment is situated in a Stalin-era building, set on a hill and inwards from the street so that traffic noise is subdued. It has two balconies, front and rear, the front having a spectacular view of the city, the rear having enough room to set up a barbeque grill and a small picnic table. It is considered a two-room apartment, although there is a possibility to make it a four-room flat. The reason being is that the roof is pitched. Just below the rear portion of the roof lies a small storage attic-like area, which can apparently be fairly easily squared off without much fuss to make it functional. The same apparently can be done with the front of the apartment--assuming that Yerevan’s architectural department approves the construction after a close, hopefully very brief and mutually beneficial consultation with them, as confirmed by my real estate broker. It is difficult, sometimes impossible to do anything related to real estate without “making a donation” to someone, putting it mildly. In fact if the donation is sizable, you can do virtually anything you want. The owner of the fifth-floor apartment in the section of the building where the apartment I rent is situated is making a sixth floor, and will supposedly install a private elevator on one of the building's exterior walls.

Anyway, the building containing the apartment we are interested in is situated in an area void of curb-to-curb asphalt and wall-to-wall apartment projects. Grass actually grows in areas around the building, as well as trees that have not undergone pollarding as of yet. There’s also a small park with a gazebo-type structure and benches where people can play chess or eat lunch. The building is about 50 years old but it is solid, with no evidence of cracked foundations or crumbing cement as can be seen on most post Stalin-era buildings.

But like all the apartments I have looked at, much renovation has to be done. This place can be considered retro—the bathroom has all the original fixtures intact but in remarkably good condition compared to others I have seen. Both the kitchen and bathroom have an odd rectangular porcelain coated basin for a sink with a single faucet. The stove and refrigerator are relatively new—only about 20 years old. But the apartment’s hardwood floors need to be replaced completely, as the short, narrow planks that meet in triangular vertical rows are all dried out and are wobbling in their grooves. The electrical wiring is intact but does not seem to have been altered in anyway—in each room two intertwined plastic-coated wires come out from the base of the wall and climb up the side in a straight vertical line to meet an antique light switch, or else curve at a perfect 90 degree angle to continue towards the mid-point of a room’s ceiling and join with an overhanging lamp. The wallpaper in each room seems to be original, and all of it has to be peeled, then the walls washed down to remove decades of dirt and dust. Yet the place has great potential.

The problem is I’m having problems coming up with the money to make an offer on the place. Banks in Armenia do offer home loans, with a 7-10 year payment plan and an annual percentage rate of 12-15%, depending on the bank. The minimum required down payment is 30 percent. Needless to say, obtaining a mortgage with these conditions is in no way an option. Unfortunately I have never understood nor embraced the pleasures of capitalism from when I was in my mid-20s up until now, so there are no Internet or other technology-related stocks and no fixed assets to sell off.

Basically I am exploring as many options as possible in order to sit at the table and make an offer. There are offshore banks out there but I doubt they will be able to help me out, since you need capital in order to obtain more capital. The banks in the US laughed at me a couple of years ago when I asked about a personal loan for more than $1,000, despite my excellent credit history. And although I have heard a rumor about a special plan offered for people who wish to invest in real estate in Armenia with US interest rates, I don’t have the details thus far.

If anyone knows of some kind of fund or trust out there for young diasporan Armenians who made the sacrifice to work and live in the homeland and want to buy a home, I’d love to hear about it.

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Blogger Wesley Fryer said...
Christian: Sorry, I am not aware of loan programs that could help you out, I wish I did. I do wish you the best in your struggle to become a home owner. Access to credit I think is a relatively new phenomenon in the US (in the last generation I think) and unfortunately, the pendulum here with credit seems to have swung too far. A payment plan of 7-10 years would sure be expensive, and especially that 30% downpayment.

I hope you can find a credit company that will work with you on better terms.

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