This FAQ reflects the current thinking about many aspects of the project and the information that we have about the state of the building. This thinking will evolve and answers will change as we learn more about the building and the needs of the community. Estimates will change as they get more detailed and we get quotes for specific works. So please check back often. Once we move into the apartment reservation phase we will lock down all content so that at that point it is clear what you will actually buy.
The will be an annual co-op member meeting that will decide on the most important aspects:
Votes will either need a majority or a super majority depending on the specific aspect of governance. There will be a quorum requirement.
Co-op members will also get quarterly updates about the state of the business as well as an audited annual financial report.
We will use a digital platform to facilitate discussions among co-op members. If at any point during the year important topics appear that require changes to the annual plan, then owners can also propose votes outside the annual meeting. If the vote is successful then the management will implement the decision of the owners.
The initial formation of the co-op will include budgets, rules, policies, contracts etc. that are part of the purchase agreement. These can be changed after all the units are purchased and the co-op is established.There is NO topic or policy that cannot be changed by the co-op later. This includes voting out Matthias as chairman and/or director and changing fundamental policies like “adults-only”.But initially it is safe to assume that most/all buyers agree on the high level strategy, so if you disagree on some fundamental ideas of the project then please do not expect to able to change it through voting easily.
We expect that some people will be more active in the co-op and others will be less active. But since we have a professional management structure to run the coliving business the effort for everyone involved is limited to voting on proposal that owners feel are important.
Let’s call this option the “Priority Backers”
1) First 65 deposits, already all taken
2) Now: Next 50 deposits - €600 gives you a €500 credit
3) Last 50 deposits - €700 gives you a €500 credit
4) Coworking Bansko Decade Members, unless priority backer
5) Multi-unit investors or VIP partners that would be beneficial to have in the group.
6) Everyone else will get the possibility to reserve a unit afterwards (if there are any units left at this point).
Later apartment reservations for non-priority backers might be priced higher to reflect the reduced level of risk as more people join the project. And the choice of floorplans will be reduced, if there are any floorplans left! So early commitment and risk taking is rewarded.
Most people that are interested in the project have either been members of Coworking Bansko or participants of Bansko Nomad Fest where they met Matthias in person. If you haven’t met him then it is highly advisable to check out what he is doing in Bansko to get an idea about what he means when he says: “destination development”, “community” and “Coworking/Coliving”.Here is a video from earlier this year about him, but you will also find a lot of information, interviews, podcasts, videos.. when you just google “Matthias Bansko” :-)He tried to turn Coworking Bansko into a co-op a few years ago and also wanted to build a crowdfunded coliving space in Bansko in the past. Even though there were many supporters these projects didn’t happen for multiple reasons, but Coliving Semkovo will take all these learnings about how to build the best organizational structure for a community into account - if he can find ~200 owners that want to be part of it.
Coliving Semkovo will build on a lot of learnings(*) and connections that Matthias gained while building Coworking Bansko. Coliving Semkovo is the next level, but not a replacement for the community at Coworking Bansko. It is something different, yet it is also all about community and remote.
(*)What are these learnings?
The most important ones that are integrated into the Coliving Semkovo project are:
- align long term interests of the community and the business -> co-op structure for the coliving
- make it easy to understand what people commit to -> buy an apartment instead of a share of a business
- get early commitments -> priority backer model
- construction is tricky -> find a building that is ready for occupation (act 16) and “just” needs renovation instead of building from scratch/act 14
- involve people in decision making without endless discussions -> separation of initial real estate development phase (Matthias provides vision and manages initial phase) and later coliving operations (co-up decides going forward)
There will be some overlap among the members/alumni but the aim for Coliving Semkovo is more of a shorter-term experience compared to people that made Bansko their permanent home. Like come for a month or two at a time and then go out and continue to explore the world. There is no expectation that many people will stay in Semkovo all the time like in Bansko but rather to attract people that are constantly travelling or have multiple home bases. And one of these home bases could be Bansko for some.
While Matthias might shift his focus more towards Coliving Semkovo to drive future innovation, he intends to continue to operate Coworking Bansko which is only 45 minutes away. And he also has a few more ideas and projects he would like to see happening in Bansko. But overall Coworking Bansko is a mature business with many established processes and it should be possible to hand over a lot of Matthias’ responsibilities at Coworking Bansko to someone else in the future.
Bansko is becoming too expensive for this type of project. Real Estate prices have increased significantly to around €1000 per m2. This would mean about 5x the cost of Semkovo for a similar property. While there are many nomads and remote workers that pay €1500+ per month for coliving, I doubt that this would be a feasible number in Bansko - in addition there are more accommodation and community options available in Bansko that affect overall market pricing. Also, there are no suitable buildings available in Bansko and construction makes the project even more costly and risky.
There are also some other factors that influence community building. While Bansko has turned out a great place to build an ecosystem for nomads, the community is gradually getting weaker the larger the ecosystem grows. “Turning into Chiang Mai” is something that describes this.
Deep connections are only possible if people spend a lot of time with other people and a remote location like Semkovo, where everyone is part of the same community with a core group that owns this community together, will allow to grow this deep community connections.
Using a well established legal structure like a co-op makes protects everyone involved. A Bulgarian co-op can also easily own real estate and run a business. While a DAO mostly exists on the blockchain. But we will - of course - use digital tools and platforms to make participation and administration as easy as possible, also for people that are remote.
The real estate development company, Coliving Bansko, will operate with a typical industry profit margin of around 10%. Matthias will develop the project and then transfer control to a co-op once the units are sold and the coliving operations are set up. However, if someone wants to become involved in the real estate development aspect, Matthias is open to sharing equity or discussing debt financing for this first stage. The minimum capital requirement is €300k, which will be used if not all units can be pre-sold and will be needed to buy the unsold units to make the project happen. These units will then be sold later and the investor(s) will be compensated for their risk through increased unit prices compared to the initial sales.
Once the units are sold, Coliving Bansko will renovate and furnish the coliving areas using the budgeted cashflow generated from the unit sales. These areas will be transferred to the Coliving Semkovo co-op, where all apartment owners can get one share for a nominal fee. At this point, the co-op will own the coliving business and will be able to start operating. If there are still unsold units held by Coliving Bansko at this point, some renovation and transfer of areas will happen proportional to the unsold units, but the plan is to avoid this situation.
The building will be operated as a "closed complex" according to the condominium act and the co-op will be the management structure. This will be reflected in the initial deeds to all units and will make management more future-proof. There will be restrictive covenants in the deeds to ensure that the co-op can enforce payments of owner fees and prevent the situation where many other condominiums in Bulgaria are faced with non-paying owners.
During the formation of the co-op, Matthias will provide the formation documents and statutes with all internal rules and processes, as well as a three-year management contract as the basis for the registration of the co-up. This will ensure that his vision, which all owners bought into when they became part of the project, will be executed without too many changes and surprises. After the co-up is formed, members of the co-op will be able to vote on the budget and any changes to the initial statutes. If more than half of the co-op members want to change or improve something, it will happen. Initially, the role of chairman and director will be a hybrid role, but it is expected that this will be separated after the co-op has matured and there are suitable candidates interested among the owners. Owners can also replace the manager through voting at any time.
Owners can choose to become part of the co-op by signing a share, or they can be owners without being part of the co-op. Each co-op member can only have one share/vote regardless of how many apartments they own, but they will participate pro-rata for their apartment size when it comes to distributing benefits (i.e. lower owner fees).
We will get some interior design suggestion for units as well as communal areas and also get inspired by great coliving and coworking design concepts from around the world.
We will aim for a similar modern design that people expect from a leading coliving space.
Coliving Semkovo is using a community ownership model because Matthias believes it will create a unique experience where every owner is motivated to contribute to the success of the project. With 200 owners promoting the project and wanting to rent out their apartments and grow the coliving business, it will be a strong form of word-of-mouth marketing. Owners will also be more motivated to run activities that they enjoy for the community, such as quiz nights, karaoke, group hiking, book clubs, cocktail nights, skill shares, and day trips, compared to just being customers of a coliving space. Additionally, being able to influence the high-level strategy and budget of the community business will engage owners more than being part of a community that is owned by a business that sees everyone as just customers.
Get 50 priority backer to pay a deposit - This is already completed!
Get at additional backers. Target 150+ people
After 125+ signed purchase agreements and first payments
We aim for a soft opening in the winter 2023/2024 - however the actual timeline depends on the speed in which we acquire backers and the sale of apartments.
Coworking Bansko is of course going to continue to operate in Bansko, but if you feel you want to move your base to Semkovo instead of Bansko then we will figure something out. Everyone who has bought apartments in Bansko up till last year should get everyone a nice profit if you want to sell it. Otherwise just keep the apartment in Bansko and get a second one in Semkovo. Then decide which one you want to rent out when you are not in the other place.
In addition all individual decade members will get a special €1500 discount on the first apartment that they buy in Semkovo or a €2000 discount for partner members that buy an apartment together.The selection of floor plans for this special offer will be after everyone who paid a priority backer deposit, but before we open the reservations for everyone. The decade member discount will only apply during this special selection period but not later.
May, but not at this early stage. The current budget assumes that we find enough buyers through Matthias’s contacts and our own marketing efforts. If this sufficient then we will need to pay commissions to agents or other sources of buyers. This will increase the cost of the units, so we will build commissions into later stage pricing.
You will get a notary deed that confirms your apartment ownership. You can freely sell your apartment and do not need any approval from the other owners as long as all your fees are fully paid.
When you sell your apartment, you can either sell your co-op share to the new owner or the co-op will redeem it at nominal value. It will be up to the co-op to decide if owners from resales will get new shares at nominal value or if the only way to acquire shares will be from the previous owner. But that is a discussion for a much later time.
You cannot keep your co-op share after selling the apartment. As the destination develops and the coliving pricing increases we would expect that the apartment prices increase.
Bulgarian banks will normally not finance real estate purchases for foreigners. This includes foreign nationals that have a permanent Bulgarian residence. Foreign banks will normally not finance real estate in Bulgaria. Banks also generally avoid loans to entrepreneurs or freelancers, even if they can show a lot of income.
So most likely you will not be able to get financing unless you are a Bulgarian national with a stable salary from a reputable Bulgarian company that has been paid into your Bulgarian bank account for the last few year.
Yes, foreigners can buy apartments in Bulgaria.
Unfortunately getting residency in Bulgaria is getting difficult for non-EU citizens. It is not tied to ownership.
There is a trade representative visa option for people that have a company outside Bulgaria and then basically send themselves to represent the company in Bulgaria. It is not easy, nor fast, and requires a lawyer for the process.
There is some talk about a digital nomad visa for Bulgaria in the future, but the party that was advancing this is no longer in power. So it is unclear when/if this would be available. Bulgaria offers a 90 days visa free stay within a 180 day period for most foreigners. See https://visaguide.world/europe/bulgaria-visa/ for more info.
Taxation is a personal topic and depends on many factors, including where your tax residency is and if you own the unit as person or via a company, domestically or abroad. If there are double taxation treaties etc.
In Bulgaria you will have to pay 10% income tax on rentals at the source. The co-op will not distribute taxable dividends, but provide benefits (i.e. reduce the owners fee). We will aim to find the most tax efficient setup and simplify tax payment from rental income if you otherwise have no Bulgarian sourced income.Please talk to your accountant for your specific situation.
We will see what’s possible for grants, but expectations are rather low. There are some government backed loans available to improve the energy efficiency of the building, including installation of a heating system and solar panels.
We will aim to presell all 200 apartments before doing the deal. This would be ideal as this would limit the financing requirements.
However while there is strong interest in buying apartments it could take a very long time to presell them all and also it is easier for some people to buy into an existing project that has already started. So we would probably try to make the deal happen when a sufficient amount of units has been presold to assume that this project will be a success, like 70%+?
At this point we would need to come up with the money for the remaining units to make the deal happen and this is where financing is required. And there needs to be a risk buffer as some possible buyers might change their mind last minute. These unclaimed units would be sold at a higher price later to reflect the reduced level of risk and to pay for the financing, so this can be a good deal for whoever is providing the financing but it is also risky.
In addition it takes money to start the whole process and there are many costs that need to be covered before we can get payment for the apartments, not only marketing and general overheads but things like technical inspections, legal costs for contracts, notary fees and splitting building into individual properties…
Especially this splitting into individual units is a bit tricky as it is an expensive process that has to be completed before owners can buy their apartments.
So additional equity financing is desired for the initial real estate development stage, bridge financing during the deal stage and depending on presales number additional financing to keep unsold units until we can sell them. This also has an impact on the amount of available renovation budget for common areas etc.
As most of the owners won’t get bank financing for their units, it would also be great to be able to arrange some private lending for some of the units.
We might arrange some financing for the co-op for investments into renewable energy (like solar panels) or energy efficiency (heat pump, insolation…) as there are beneficial government loan programs available.
Here is an example calculation for the cashflow of a studio unit. Not considering periods where owners use the units themselves.Initially the occupancy rate will be low and we start with a low price point, see marked values in table below. So owners should expect to have a slightly negative cashflow (owners maintenance fee) or breakeven in the first year until we get higher utilization rates. But then it could become really interesting once we get to higher occupancy rates and are able to also raise coliving package prices due to becoming a more attractive destination with more people. Of course this depends heavily on our ability to make Coliving Semkovo an attractive destination for our target groups and promote it accordingly.(not financial advice, please make your own assumptions and do your own calculations.)
Owners will receive €200 per month for a studio, €400 per month for a large studio/1BR and €600 per month for a 2BR unit. Utility costs are reimbursed on top of the rent based on consumption. To make utility bills more predictable for guests we will charge the coliving guests a flat fee. We will have a booking system that will try to equalize utilization across units so that all owners will participate equally in the rental scheme. Owners that do their own promotion for their apartments will receive direct bookings of their apartment on top of the equalization scheme.
Yes, but the preference is to have a wider range of owners. So we will first do reservations of up to 2 units before opening it up for multi-unit investors.If you have a good concept that adds to what we are building and want to purchase multiple units/a whole floor to make it happen, then please get in touch with email@example.com e.g. it would be great to have organizations own multiple units to run incubator or education programs. Also distributed companies that want to offer apartments to their employees would be a good fit.
This is the most optimistic scenario where we find all required buyers quickly. Actual milestones depend on hitting minimum targets.
(*)There will be notary and legal fees and property taxes due at signing, about 3-5% of the total notarized contract value (without reservation fees or renovation/furniture fees). So e.g. for a studio expect about €500-€600 in fees/taxes. We will aim to optimize the legal structure for the sale to minimize costs, taxes and fees.
Below is the typical net area of the different floorplans. Coliving Semkovo will probably keep most of the staff rooms for staff & volunteers or convert to budget accommodation. Or sell some as apartments even though they lack a view/balconies to increase the budget for common area upgrades.
Most units have their own small balcony or outdoor area.It might be possible to combine units if you want something bigger.
Some of the units have solid walls to separate rooms, others use wooden dividers. We will see where it makes sense to add dry-walls and where it makes more sense to keep the semi-open floorplans. Unit cost will be determined based on size, not on amount of walls.
For comparing pricing with other apartments elsewhere please consider that you are not only paying for the net m² of your unit but also that you also get a fraction of the ~8000m² common/communal areas that are about half of the total building size and a share of the coliving business. You will be able to rent our your apartments through the coliving and won’t need to worry about check-ins or how to organize maintenance when something breaks.
You can decide how you want to use / furnish your unit.To rent them out however it is best of most of the units have the same style, furniture and amenities as this will make it easier for guests to get a consistent experience.
For rental units the suggestion is:
We will split the renovation works into multiple stages and do one floor at a time. Owners that do not want to get their apartment renovated before opening will have the choice to select apartments on specific floors/blocks that are scheduled for later works. Overall the works should be renovation, not construction, which should cause less noise anyways.
Similar for common area renovation works we will do one area after each other, also considering that initially we will have probably only 50% occupancy and won’t need all areas yet.
About 25% of the total project cost, or ~€1m, is reserved for building renovations and for the initial setup of the coliving areas. The building has a lot of space, some of them being service areas, basements etc.S o we will do the renovation in stages with the initial focus on areas that we will actually use from the beginning. And then as the operations grow bring more areas online.
The renovation budget includes:
We will hire some permanent facility staff to already be part of the renovation and help with some aspects with the idea of giving them a permanent position to maintain the building after the initial renovation is done. There are some older guys in the area that have been involved with the building in the past and know it very well. And also use outside contractors for defined work packages to get the renovation done in a reasonable time frame.
The budget also includes the basis to run the building as a coliving space like:
The list of works and purchases will be prioritized in a way to ensure that we can start operating the building. The owners will be able to express their interests to help with prioritization.At the moment it is not envisioned that the co-op needs to take any bank financing, however if the actual costs are higher, then it would be possible to e.g. finance the solar panels or heating system instead of paying them outright.
We will commission a more detailed technical inspection but so far the building looks in good shape considering its age and that it hasn’t been used for the last 4 years. There are no visible damages like water or mold and all the windows have been upgraded to aluminum frames already. The roof is solid concrete. Generally high quality building materials have been used in construction and all walls are solid.
There are two blocks A & B that are in different conditions: Block A is in reasonably good shape and will be easier to renovate. It has newer style aluminum windows and has been operated as hotel until they closed 4 years ago. We would initially start operating with those units. Estimates are based on Block A apartments
Block B needs more work in the apartments and common areas. Replacement of windows, all door frames, removing old wall paper, plastering, replacing fixtures in bathroom etc. We would renovate this block AFTER opening. Pricing for the units would be lower, with low/no owners fees until completed and we would split renovation costs across all units as some of the units might need more work then others to get them to the same level.
The apartments all need new carpets and fresh paint, some will need plastering and/or refinishing wood surfaces. The bathrooms are dated, but luckily have neutral tile colors.The existing furniture is solid, but old. While some could be upcycled and maintain some retro chic, most should be replaced, especially to create a modern feeling in the apartments.
We would hire an interior designer to help with making the apartments and common areas great. To renovate a studio apartment (Block A) and getting it ready to rent out would probably cost about €5500 - €6000 (estimate). The renovation of apartments will already be managed by Coliving Semkovo, so the costs will be transparent and any economies of scale will benefit the co-op.Block B studio units will probably require €7500 - €8000, but will be priced lower than Block A apartments to make up for the difference.
Owners can also decide to buy unfurnished units and renovate them themself (within time limits to minimize impact on operations), furnish it differently or maybe even keep it in its unrenovated state until they plan to use or resell it.
To rent out a unit via the coliving scheme, the minimum requirement is to have an Inverter AC and the compatible smartlock, however it is desirable if all rentable apartments have the same furniture, design, and amenities.
Larger unit (Block A) renovations and furnishing are higher, estimate €7500 for a 1BR and €10000 for a 2BR. For owners that want to use the units for themselves the furniture quality level will determine costs.
Is there more technical information about the building?
Yes, please check Old Building Information with a general description of the building from 2003.We will also commission a technical inspection to find out what the current state is, what needs to be fixed and replaced to have a better estimate about renovation costs.
Here is a list of 20 “must-visit” coliving spaces and the cheapest private room option in each for a one month stay for one person. (pricing as of Oct 10th). Not all these prices are comparable as they are in very different locations, but the trend is clear: people pay for coliving and Coliving Semkovo would be a clear low-cost price leader initially and then we have enough room to grow to a more premium pricing while the destination develops.
We will make Coliving Semkovo an attractive destination year-round. In periods where outdoor activities are less exciting we will focus on doing events and attract organizations that want to do events. This can be workations, team building, bootcamps, language camps, coding schools or similar type of activities that need accommodation and event space. We will aim for events that are in line with our core community, so a medical conference for dentists might not be the right fit - unless they bring lots of money :-)
We are building an adult-only coliving space, so children under 18 years are not allowed on the premises - and we might put a restrictive covenants into the deed to also make this binding for individual apartments not only the coliving areas.
The owners might change this policy later with a vote in the co-op, but generally this is not a place with the needs of kids in mind. While we develop Semkovo as a destination it might be possible that in the more distant future there are other owners or guests that create another coliving space for families close by, but do not count on it please. There might be much better places for kids than Semkovo.
Owners can keep small pets (cats, dogs, goldfish…) in their apartments. Pets will not be allowed in the coliving areas, but each block has a direct entrance that can be used to get pets in/out of the building.
Pets that cause issues with other guests or owners, like frequent noise or smell issues, will be asked to leave the property. Also aggressive pets will be banned on the first offense. Owners will be responsible for damages that their pets cause to the building or landscaping. The specific way how these conflicts will be mediated will be describe in the co-op rules, but expect that we will make these rules binding via restrictive covenants.
Owners will be able to decide if their units should be rented out as pet-friendly - and if there is an additional charge for pets to cover possible damages to their apartment.
As we are in a rural area and have a lot of space there, it is feasible to build an animal shelter / small stable nearby where pets can live outdoors together.
The plan is that owners put Inverter ACs into all apartments and we will use either inverter AC or heat pumps for the communal coliving areas.
One of the most cost effective form of heating at the moment unless we install a much bigger 300KW+ geothermal heat pump for the whole building. The building is built with solid walls and we should be able to keep utilities for apartments at about €50 per unit per month on average. This cost will be collected as part of the coliving bookings from external guests. Owners will pay their own consumption while the unit is not rented out.
Another great source for heating is a large wood chip burner / biomass system. It requires wood chips to operate, but those are 50-70% cheaper than wood pellets and easily available in areas with an active forestry management - like Semkovo :-)
We also aim to put a large solar installation on the roof to cover at least a part of the electricity usage for the coliving areas. Current ROI on solar with commercial electricity rates is about 2-3 years, so this is a sensible investment and will also provide more value to the owners.
It might also be possible to install a hydro power plant in a nearby stream which would provide a more consistent power source than solar.
We will also upgrade the building infrastructure to include more “smart” automation as well as install energy consuming lighting and other systems to optimize costs.
So while heating a huge property like this without breaking the bank is a challenge, the scale of the building will help us to find an economical solution and use technology that is way more advanced than when the building was originally built. There is a **rumor** that there is hot thermal water under the property. We will explore this further and if we can actually access this as a source of heating then the whole cost structure for the building would improve significantly as it would reduce heating cost probably by 70% or more. Our current calculations do not depend on this as it might turn out to be one of the many wishful thinking distractions that we often hear around Bulgaria. Do not base your investment decision on this rumor!
All owners will get a specific booking URL to share for their specific apartment, so when you promote it people will book your place when it is available. If it is not available then of course other units will be proposed.
If you want to provide your apartment to a friend or family member for free, then they can pay the coliving fee of €150 per month directly and can choose if they want to use the cleaning service or not. You can decide to cover or charge utilities. We will support these free bookings in the booking system. And you will also be able to set a higher rental rate in the booking system, e.g. if you furnish your apartment to a much higher level. The other fees will increase prorated for apartments with higher base rents.
It will not be possible for non-guests to get access to areas in the central block of the property. So basically everyone will need to be either an owner or pay the coliving fee.
For a studio the standard monthly fee is expected to be €499(*) initially, this includes roughly:
(*) if unit/renovation costs are higher then also the initial package cost will increase to maintain the same return for owners.
Shorter term rentals (weekend, event, week) will be priced proportionally higher. When the business grows and the destination becomes more attractive we might be able to raise prices accordingly. Aiming for a coliving package of €600 - €750 for a studio within 3 years is not out of the question looking at coliving properties around the world. The owners rent will increase proportional when we realize higher prices. If we decide to run promotions, then the owners rent will decrease proportionally for participating owners. Initially we expect about 40-50% occupancy, but aim to raise this as we gain more momentum.
The initial budget will be set at a level to maintain the building, build a future repair fund, and operate the coliving regardless of any external coliving guests. And with a risk buffer as initially there are probably more repairs and we don’t know yet how much everything is going to cost.The estimate for the first year is €800 for a studio (1 pax), €1650 for a one-bedroom (2 pax), €2400 for a two-bedroom (3 pax) which includes the coliving access for 1 to 3 owners.
Guests will pay for the coliving membership which brings in additional revenue to the business and allows to offer more services and amenities.
The owner’s fee will decrease based on the commercial development of the business as well as how the owners decide to distribute or reinvest profits from the coliving operations.
The prediction is that the owner’s fee will decrease to €0 with a 40-50% utilization and the current coliving pricing for owners that rent out their units. However once utilization grows it should be possible to increase pricing which will generate a higher cashflow for the business and reduced owner fees for everyone.