I have seen many smart, successful investors come here from America and try to apply American investment techniques with varying levels of success.

Anyone looking to invest in Eastern Europe would be well advised to understand the unique factors that motivate the market in this region.

European readers of this article may find it less useful then there American counterparts. Many of the distinguishing factors of Eastern European real estate are actually distinguishing factors of European real estate while others are purely regional in nature.

The European Union drives the market or it does at least partially. Most Eastern European countries are being considered for EU membership or soon will be. The prices of the European Union set the benchmark for prices in emerging European markets and drive speculation. Eastern Europe is not similar to Central South America which has no similar benchmark to follow.

Europe tends to be more expensive then America in almost all facets but in particular in regards to real estate. Prices may seem high by American standards in some Eastern European locales (particularly Capitol cities) but may be quite low by European standards.

Time and time again, Central and Eastern European markets have proved that the EU has a tremendous impact in increasing property values. Just look at Hungary, Poland, the Czech Republic and the Baltic States. Each market saw a steady growth in value in the time leading up to EU ascension and continued/s to see remarkable growth for a period after.

In some ways Bulgaria or Croatia joining the European Union is akin to Alaska or Hawaii joining the United States of America. It is a radical transition with radical implications.

And yes, 1300 Euros a square meter for office space in Bucharest sounds expensive until you find out it's 13,000 Euros a square meter in Paris.

Prices have went way up and, though they may not reach Paris prices, still have long ways to go.

Cheaper is not always better

I am told of the story of an American women from Washington state who was looking at a raw land opportunity in the north of Romania in 2002. When she discovered that per square meter/foot price was actually higher then in her hometown she promptly advised her agent that there was no way she was going to pay more money for land in Romania then she would in suburban America. Her thought process is quite understandable.

However, it also proved to be quite incorrect. Land in her hometown has shown reasonable growth over the past 4 odd years but the land that she could have acquired in Eastern Europe would have earned her about a 400% profit has she sold in the summer of 2006.

Similarly, many investors come to me and ask me "how much land can I get for x amount of dollars." The answer I inevitably give them is "a lot, but unless you are starting a park or a farm, I'd rather help you buy the most profitable land, not simply the most land."

An investment in a smaller plot of land at a higher price can be better then a lot of land at a lower price.

The game of Eastern European investment is capitalizing on the rapid growth of property value. If you pay more your land then it would cost in Hometown, USA it can still be an incredible steal.

Follow the market.

My friend bought an apartment in 2001 for $10,000 and she just sold it for $60,000. She doesn't have any real estate training. She more or less made the profit by accident. She just "followed the market" to use her words. Had I seen the apartment 5 years ago, not fully appreciating then what I appreciate now, frankly I wouldn't have given even $5,000 for the place. The neighborhood is full of old, grey, semi-dilapidated looking buildings. Neither the neighborhood nor the apartment building could be less inviting. I would have assumed, that despite the super sturdy hurricane proof build of the local apartment complexes that someone would come and knock them all down one good day....Boy, was I wrong....

Even today, I wouldn't pay $100 a month to stay there, but I sure wish I would have paid $10,000 five years ago to own an apartment there. It would have done me a lot better then collecting a few percent interest in the bank.

Europeans like to live in the city, in apartments often over houses in the suburbs. So now matter how much new development there is, a premium remains on apartment complexes inside of the city.

The moral of the story is follow the market. No, it doesn't make a whole lot of rational sense what happened and happens frequently in Eastern Europe but the market is wildly profitable and if you follow it, it will lead you to profit too.

Western Europeans, Brits in particular, have popularized investing in "Off Plan" properties to capitalize gains in Eastern European markets.

I was recently speaking with a US-based real estate friend of mine and referred to off plan opportunities in Eastern Europe. He was relatively unclear on what I was talking about. Even the most qualified real estate investors in America aren't clued-on to the off plan real estate phenomena in Europe and the UK in particular.

If you google the term "off plan properties" you'll see scores of web sites listed, most of them from the United Kingdom.

UK based firms with British nationals on the ground in various Eastern-block countries establish relationships with qualified developers who are preparing to launch new product (usually apartments in apartment buildings) and strike agreements with them to represent those properties to there current and future clientele back in Western Europe.

In doing so, they secure below market prices to make there offer as attractive as possible and move as many pre or in-construction stage apartments as they can. Buyers pay between 15-40% down and then usually the rest within 12-18 months when they are handed the key.

Generally, investors can also qualify for mortgages. with there new investment property as collateral, and pay for the second balance via the rent they can then receive.

The multitude of reasons why off plan opportunities are so attractive to UK investors is outside the scope of this article but can be summarized succinctly; The investor has all of the work done for him or her. The agency has located a new building, in a strategic location, with high rent potential in a region where property values are accumulating on a regular basis much higher then in the UK or Western Europe (or America for that matter). The agency can also manage the property and help the buyer secure financing. This is why thousands of apartments are sold off-plan to UK and other investors every month.

Off plans are by-and-large how Europeans invest in Eastern Europe. What works for Europeans will work for Americans just as well.

A moment of candor: you will never fully understand all of the factors driving the Eastern European real estate market. After doing business here for years, I still don't.

All I know, is that you need to think differently then "American" when it comes to investing here and that you can make a lot of money if your invest it right..probably more then you could in your hometown or anywhere near it.

High returns and legendary profits are the norm here. Yes, they happen in America too. People get 212% returns on investments in America in one year. Those are exceptions to the rule though. In Romania, however, an entire town in 2005, called Brasov, recorded an average growth of 212%. Similar growth in other towns has been common.

That's the difference here: incredible profits are too be expected and if you get a normal profit, you did something wrong.

Coming to Eastern Europe is coming to a place where the exception is the norm in real estate and in a good way.

American Thinking Isn't All Bad

I am a proud American and I believe it's our ideals that made us what we are. I've spent most of this article trying to get you to "think European' so you can profit from the incredible opportunities in real estate in Eastern Europe. Now, it's time to tell you - be glad you can 'think American'.

A lot of the investors who were the most successful incorporated one or two well thought out American investment techniques into there investments and maximized there overall profit.

If you can incorporate European thinking and give it an American edge, Eastern Europe will be your oyster.

It doesn't matter whether you want to invest $50,000 or $500,000. You can even start with a lower amount and are likely to make a lot more then you would with real estate elsewhere in the world or in the stock market. Everyone in Eastern Europe seems to be in agreement on one thing: local real estate is where the money is.

It's when you are willing to think a little differently, understand the market from a local perspective and decide to invest wisely versus follow pure instinct that you significantly increase your prospect for profit. Remember, it's not how much you buy with your investment, but how much you profit from it. There's a big difference there.

That's it. I've been living in Eastern Europe for 7 years now, I've witnessed and even helped countless people make great profits here on real estate, and the aforementioned is what I've taken away and learned from my experience business-wise.

These are my secrets of success in the Eastern European real estate market and now they can be yours too.