Entrepreneur of the week Post 4 Hello everyone, today I want to talk about buying properties for Buy and Hold,...
Initiated this week's post 4
Hello everyone,
Today I want to talk about buying properties for Buy and Hold, rental properties that will generate a monthly salary for us.
For a very long time, the Israeli market has been in a bubble, house prices are very high and low rents compared to investment.
It is therefore clear to all of us that we are looking for alternatives and the US market is excellent for investing, and it is possible to earn three times as much on our money.
I hear a lot of people who want to get into the real estate world and want to invest but claim they have no money to invest, so there are solutions:
1. To leverage an existing apartment, another mortgage can be taken aimlessly up to 50% of the existing property value at excellent interest rates.
2. For those with executive insurance, training funds and provident funds, they can take out a zero interest loan at the expense of the fund.
After many conversations with investors and investment houses, the majority of the public looking for investment has a circular number of approximately NISX,000, approximately NISX,000.
The biggest question, how do we leverage this amount for something bigger, for economic prosperity, early retirement.
I sat with an investor and tried to outline a path for him, after all, from one property, with a gross annual return of 13-14 percent before tax, it is impossible to retire, so how do you leverage and retire early?
There are a wide range of financial and investment diversification solutions, but I want to focus on Buy and Hold, in the purchase of rental properties.
It is clear to everyone that one asset cannot be retired, our goal is to acquire as many assets as possible, the thinking is for the long run.
I offered an investor a $ 100 asset with a monthly rental of about $ 1700 gross per month, and after downloads of insurance, municipal taxes, management company, cockroaches, the investor would remain $ 1300 per month net before tax, annual account, 15,600 $.
I suggested to him that after 4 years, he would take a loan of NIS 100 and purchase another property, where he would earn about $13,200 a year on the additional property (not every property can reach $1700 per month, but it is possible to reach figures close to $1400 per month on average), so that each One year you can reach a profit of 28,800 dollars per year, three years later take another loan of one hundred thousand NIS and purchase another property, the annual profit will be about 41 thousand dollars and from there every year and a half you can purchase another property and another property and so on.
If we want to achieve economic independence, we need to go ahead and plan for the long term.
Listen, the numbers you tell are amazing, and sound too good to be true. How long are these assets held? What is their condition? Who rents? Were there any payment issues? Let's tell us all where the catch is - because it's clear to everyone in the business that such returns are not sanitary.
Sagi .. by the way… How is your solution in bringing money to Israel?
The Israeli market is not in a bubble
Apart from very specific places
Where do you invest or live today? Do you currently have properties worth $1700 a month rent for properties in the 100k? Do you have options to arrange refinancing after a certain period for foreign investors? Good luck
Agree if every word,
I started my investments 28 / 02 / 2017 since I bought several properties.
Today the properties buy another property every year (without adding money on my part).
This real estate is like the RISK game
Sitting on Australia and hoarding assets.
Why wait for 4 years first and wait every year and a half
Think it should and should touch some points here-
1. Yields in Israel are not necessarily low. You have to know where to look and how to invest, and here you can also generate very high returns. In the United States, too, I have been hearing for several years that more than 10% cannot be done, but there is a lot of living proof of that (you and I for that matter).
2. I think it is worth doing a simulation for your plan, to show what cashflow it generates and what the risks are in the leverage taken (for how long is it taken? at what interest rate?), to explain to those who understand less what you are talking about in more depth.
3. Again on the simulation - the calculation seems to miss an annual report and payment to the CPA and maybe even Eviction used to calculate in C-regions (sounds like you're investing there)
Regardless of - your attitude is very good, well done
People who use the word "bubble" more easily.
Your numbers are out of touch with reality. Buyer beware!
… Do you have a $ 100K property that brings you $ 1700 a month? That means you make 20.5% annual on the property… sounds a bit illogical
The numbers sound a little too pink in relation to reality
Liron Waissman
What areas are these?
Annual 1700 dollars will go to the 800-900 dollars you have left and not the 1300. The rest of the calculations are too pink and theoretical. My opinion ..
Not too pink?
Didn't understand how a 100 loan would buy a property that would put in 1300 / 1500 dollars?