Print your genuine dollar bills - legally
Most Israelis are salaried employees who (rightly) complain of difficulties in maintaining a high standard of living here. Salaries are rather low, and expenses are rather high. So what do most people do? They sit around and complain, rather than taking action to improve their situation. They simply believe that "the rich get richer, and the poor – poorer". However, we are here to tell you about those who managed to break out of the vicious circle and, with little effort, succeed in significantly improving their standard of living.
What's their secret?
They were on a constant lookout for income-generating investment channels that would significantly increase their capital, as well as their monthly income. Did they have large amounts of capital? Not necessarily. Did they have financial knowledge? Not usually.
The real estate crisis opened up a rare investment opportunity. In 2008, the American economy suffered a severe financial crisis which led to a crash in the real estate market. In many cases, properties dropped as much as 70% in value. As a result, many homeowners now owed more to the bank than the net worth of their property. The banks seized these properties and put them up for sale at ridiculously low prices. As a result, a flood of investors from all over the world flocked to snap up these assets. The American real estate market has been on a recovery path since 2011, but prices are still far below the record-high levels of 2006. This has allowed for an investment opportunity yielding a high return for a number of years.
Two investment channels
1. You can purchase a renovated and rented property and receive a monthly income from the tenants.
2. You can purchase a foreclosed property or from receivership, upgrade it so that its value appreciates and then put it on the market for sale to American residents.
The first type of investment is recommended if you do not have a large sum available for investing and you need a fixed monthly income from rental. In certain areas of the US, this can be as large as a 10% annual return. (When you compute this with a modest rise in the property value, the average annual return over a 5-7 year period will be between 15-20%). The minimum amount of capital required to buy a reasonable asset is $50,000.
The second type of investment is recommended if you have more than $100,000 available and do not require a regular monthly income from your investment. You can reach annual returns of 20-30% and sometimes even more.
Reasons why Israelis are afraid to invest
1. I don't have an initial sum of capital to invest.
2. I am frightened to invest in a faraway place where I have no control over the asset.
3. I have heard of shady characters involved in investment schemes who have caused many investors to lose all their money.
4. How can I know that the annual yield I am promised will actually be realized?
It's OK to be 'frightened' or 'put off' if your fears are logical and controlled. However, in some cases these feelings are exaggerated and prevent effective action. We can provide appropriate answers to all the above and present our impressive success stories to allay your fears.
1. Despite popular thinking, you really can create equity (Print your Dollar Bills … Legally). You can do this by 'leveraging' ownership of an asset or by using capital sitting in a 'Keren Hishtalmut' tax-free savings plan or in a pension plan that is losing its value.
2. In today's world, there are many efficient and cheap methods to overcome your fear of lack of control from afar, even if you are not up-to-date with the latest technology. Ask the seller to see on-line pictures of the asset, names of the tenants and their phone numbers. Don’t be hesitant to hesitate to call and check it out. If you can’t speak the language, just ask a friend or acquaintance to make the call for you.
3. There are a number of simple ways in which you can identify shady businessmen and sniff out dubious transactions which won’t yield a return – heartache and financial loss. Ask the seller to tell you about some of his success stories on behalf of clients, including names and phone details of investors. Then phone them and hear from them first-hand about their experience with the seller.
4. Check-up databases and other tools that will let you know, with a high level of certainty, the expected yield on certain assets. (Ask the seller to show you these online tools which will provide information on the specific assets and on other properties in the vicinity).
It’s important to use an honest broker who is knowledgeable and has experience in successful real estate transactions. It’s worth spending time and effort to look for such a person in order to steer clear of bad deals and unnecessary heartache.
You need look no further than Yossi Tsurel.
The writer has been dealing in real estate investments in the US since 2011. He is the owner of the American real estate company CYT LLC, which operates in Arizona and Michigan.