About the 40/60 condominium opportunity in Addis Ababa

About the 40/60-condominium opportunity in Addis Ababa…by pausing the video you should be able to read the entire agreement form, which is in Amharic.  For now this is the most efficient way that I am able to share it with you. I hope it is readable for you. Here are few of the main points. Think of it this way to help you comprehend this. The Addis Abeba Housing Enterprise is selling land for residential condominiums to be built on. The commercial bank of Ethiopia is buying them. Interested and qualified individuals are buying those from the bank by only putting down 40% and the bank covering the other 60%. But with in five years the individuals must have paid off 40% of the condominium’s price.  Through either a lump sum or an installment payment. 

http://youtu.be/YGB_2EbBX20

In simplest terms if you can pay at least a minimum of $55/month for the next 5 years which equates to 40% of the one bedroom condo; then you will receive your key to your one bedroom condominium and you will pay off the rest 60% of your condo. Want more details…

1.     Who is qualified? As bulleting point 1.4 states all 18+ years old Ethiopian born (whether) they currently are Ethiopian Nationals or not, living abroad are qualified with Ethiopian Origin ID card aka Yellow Card which can be obtained from your country of residence’s embassy for $100 or its equivalent.

2.     If you can not do it yourself in Addis you need power of attorney  (wuklna)

3.     The prices are Birr 162,645, 250,000 and 386,400 for 1, 2 and 3 bedrooms respectively. 40% of the payment to be completed with in the next five years from now; until then you can either do installment or pay it in full or lump sum

4.     The buildings are expected to take at least 18 months, hence some buildings might be finished in less than 2 years but it can be estimated others will take longer. What ever is completed will be given to those who have paid the highest; 100% being the highest (for ex. for one bedroom condo, it would be Birr 162,645 etc), if let’s say there are more people who paid 100% than the number of completed condominiums, then there will be lucky draw between those who paid the highest. Let’s say in year two, 100 condominiums of the one bedroom condominiums are finished and there were already 130 people who entered into the one bedroom condominiums contract and happened to have paid in full = 100%. 100 of the 130 people will get those 100 finished condos by a lucky draw. The 30 people who did not get lucky on the lucky draw will be next in line for the next butch. It keeps going down that way up to those who paid at least 40%

5.     THE FINE PRINTS: if because of inflation the prices of to build the condos increase from what is budgeted right now, 40% of the unexpected increase will be paid by you and the rest 60% of the unexpected increase will be paid by the bank. Let’s use an example, the one bedroom is now budgeted at Birr 162,645 but if let’s say because of inflation it ends up costing 180,000 rather than the 162,645 40% of the difference (180,000-162,645) will be an increase from your own pocket (this is how I understand it don’t quote me on this one page 6 #5).

6.     The interest rate on your installment payment is 5.5% annum while the interest rate on the 60% that the bank will pay on your behalf is 7.5%

7.     This will be going on for one more week.

8.     You might have heard you can also do this through an association (basically if you get 24 people to join you and make a group you can do this as a group. What is the benefit of that, few things the one big thing is your Condo will be a ground plus one or two building not a high rise 9-12 story condominium building…

Should you do it? In my opinion this is a financially sound investment even if you don’t plan to live in Addis Ababa. Should you pay it off as much as you can now or choose to do the installment plan? It depends on your current finances, your economic forcase for the next few years (inflation expectation) want some advice on that call my secretary and I will schedule you for consultation J

Disclaimer, this is my personal interpretation as accurate as I understand it, for my friends and for those who might find this info helpful. For legally binding and authenticated interpretation, please contact the commercial bank of Ethiopia.

Cheers,