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Wednesday May 26, 2021
Wednesday May 26, 2021
# Initiated week Yossi Beit Yosef # Post 1
Introductory post - get to know yourself!
"One of the biggest mistakes of real estate investors / entrepreneurs - it's both and both"
Hi friends, my name is Yossi Beit Yosef and some of you have already gotten to know me
My story with the real estate world began at a young age when I accompanied my late father who was 44 years older than me to a meeting with a contractor for the construction of an office building on a plot owned by the family and other partners in a combination deal.
This was my first exposure to the business world and this method of financing, at a later stage when the building was standing, I learned about leases, working with realtors and also about unequal collateral and eviction of non-paying tenants.
Lessons with heartache and financial losses here and there but with a profit worth gold.
"Rich Dad - Poor Dad" - has not yet been written and other books have not arrived in the country let alone social networks! America was considered a rare and expensive place to travel - not to mention business and investment
When I meet people here at the age I was then talking about flips and buying homes in the US - my heart expands!
(How immature I was)
Over the years I have worked in many fields and had diverse careers outside the real estate world: I was a life insurance agent and lending groups abroad, I was a web designer when the Internet was born in the HTML 4 era and also active in the capital market - where I learned that you can earn when "everyone cries" - "Short on CT Bank share" - for the first time in my life I earned from the bank and not the bank from me and in the end I decided that what I really want to do is real estate
I completed training with a number of leading teachers (who are also practitioners) in the field (we are in touch to this day) and set out - buying - improving and selling properties in the “hardest city in the world” - Tel Aviv, an area I continued in Florida where I currently live.
In Florida I was exposed and met the leading people in their field and I learned unique niches in the real estate field and everything around it until I discovered the field of land and since then I have not looked back!
I remember it like it was yesterday, Sunday (sabbatical in the US) I'm sitting on the porch of the house, the phone rings
"A friend of mine bought land for investment in Florida a few years ago and he's dying to get rid of it - you live in Florida - can you help him sell it?" It was Naomi a friend and investor in her own right who lives in Texas, "Yeah no problem I answered her without thinking twice", "Thank you I give him the phone, we'll talk" she said and hung up.
What I did What for me and the land, what do I understand by that - I did not have time to think too much and the phone rings "Hello my name is Gil, Naomi gave me your phone and said you can sell for me the land I have - how much can I get?" "Hi Gil give me the address of the land, I will make some inquiries and I will get back to you"
I sipped my cold coffee, it was a little after 12 noon and I ask myself, what did I do what I got into it what me and the lands and more on the west coast of Florida (I live on the east coast)…
My knowledge of the lands was like the distance from Florida to Israel
You will hear the rest of the story when I tell you about flips on the ground and the difference between a flip on the ground and a flip of singles. - I can only tell you that since that day I have not looked at any other type of real estate anymore.
Tomorrow I will review the world of land - land is not just construction and later this week I will talk about investments with a return of 70% and more, flips of land, monthly income from land, land development (and maybe we will also talk about investments in forests if it interests you), in the summary chapter, You in a number of tools and we will talk about the nature of your investor - how to choose your niche in the real estate world?
My Insights to You - Find the one thing that really interests you and focus on it before you move on to the next thing (if any)
Not to be afraid of change - you can go through the unknown because you always discover wonderful things, I have changed several careers in my life and I enjoyed every moment in each of them
Oh and a year ago I bought myself a birthday present - a shirt (pictured)
See you tomorrow
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YouTube Channel:https://www.youtube.com/channel/UCliNShPg9cVs5HIz3kRbe3gYou can contact us on the site - we have more then 10,000 articles in 12 languages:www.ForumNadlanUSA.comOr join the Facebook group -Hebrew:https://www.facebook.com/groups/ForumNadlanUSAEnglish:https://www.facebook.com/groups/USARealEstateForumAnd get weekly educational updates about the USA Real Estate market:https://www.forumnadlanusa.com/newsletter-signup/Contact Us At:https://www.forumrealestateusa.com/Phone: 978-600-8229Email: Support@ForumRealEstateUSA.com
Tuesday May 25, 2021
Tuesday May 25, 2021
Natalie Alter
# Post 4
** Family company or limited company **
By working properly with the right professionals we can enjoy the benefits of sole taxation in real estate profits.
In the post we will talk about a family company, a limited company, where it meets us and most importantly - how you can save a lot of money.
So without further ado, let's get started:
* ** Company Ltd. ** - Limited liability company. A company Ltd. may engage in any legal matter that it declares has arisen for this purpose, and it has a separation between the people who establish it and are its owners and its assets and accounts. A company can be private or public, listed on a stock exchange or a family company, but it is considered an economic legal entity in itself that obeys laws regarding the management of its funds and assets and payments and liabilities to suppliers and customers.
In short - the company is legally independent, and its owners enjoy a limitation of liability - it is not possible to tie the company's debts to the company's owners.
** Family Company Home Company ** - A family company is like a limited company, it operates according to the Companies Law, but the only difference between it and a regular limited company is in calculating the taxes paid to the income tax.
In terms of income tax, a family company is taxed as if it were an individual and not a limited company. Therefore the tax calculations are calculated according to the single taxation of the taxpayer representing the company.
On the face of it, it seems better to pay corporation tax of twenty-five percent over individual tax that can reach forty-eight percent of income. But a family company has a number of advantages and proper conduct will allow the company to enjoy the unique benefits and also take advantage of the protection afforded by a limited company.
There are conditions that must be met in order to register as a family company, the main ones being:
A company controlled by a maximum of five people.
2. A society in which the public has no real interest.
3. The company is required to hold one of the following assets - building, land, cash, shares of a home company.
** What are the benefits of a family company? **
While the distribution of dividends to shareholders in a regular limited company entails the payment of tax, the great advantage of a family company is that dividend distributions to the shareholders in the family company are exempt from tax payments.
If the representative taxpayer has several companies, some of which gain and some lose, it is possible to offset losses of one company from the profits of the other company. This method is common among contractors who set up a separate company for each construction project.
If the representative taxpayer has tax reliefs such as credit points due to a family with many children or due to disability and more, the whole family will be able to enjoy these credit points and the tax relief they provide.
If the representative taxpayer is an employee who owns a losing company, it is possible to offset the company's losses against the income from the salary and receive tax refunds.
A family company is one of the "pipe companies". A company defined as a family company gives its shareholders a unique status. The Company's income will be attributed to each of the shareholders directly and will be taxed according to the marginal tax rate imposed on it. Allegedly, in most cases, the individual will prefer that the tax levied on the company's income be according to the corporation tax, which is significantly lower than the maximum marginal tax imposed on individuals. However, basic tax planning (but one that is controversial in Gaza) would say that when a company makes a profit the shareholder will leave the company in its normal position. From the moment she loses, he will become a family company, deducting the loss from his personal income. It should be emphasized that no more for the taxpayer ie for the owner of the family company to offset losses at the personal level during the period in which the company was normal, the company will be able to offset the losses only against future profits.
** How can a family or home company help me save tax? **
I bring you back to one of the previous posts which explained that income tax allows a company to be viewed and only for the purpose of offsetting the tax.
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YouTube Channel:https://www.youtube.com/channel/UCliNShPg9cVs5HIz3kRbe3gYou can contact us on the site - we have more then 10,000 articles in 12 languages:www.ForumNadlanUSA.comOr join the Facebook group -Hebrew:https://www.facebook.com/groups/ForumNadlanUSAEnglish:https://www.facebook.com/groups/USARealEstateForumAnd get weekly educational updates about the USA Real Estate market:https://www.forumnadlanusa.com/newsletter-signup/Contact Us At:https://www.forumrealestateusa.com/Phone: 978-600-8229Email: Support@ForumRealEstateUSA.com
Monday May 24, 2021
Monday May 24, 2021
Natalie Alter
# Post 3
** Observe or not observe - LLC view or seal **
So we got into the right deal, read post number 2 and chose to list the property under LLC.
In the first year we open the company we will be required to submit a Form 150 in which we will declare a holding in a foreign company, and whether we wish to observe it.
Before we decide whether to observe the LLC or not, we should know key concepts and understand the meanings.
Before that it is important to understand - what is a company's view and what is sealing?
** View ** - An arrangement similar in nature to an American arrangement known as the S-corp. The arrangement means that the Company's income and expenses will be attributed to the Company's shareholders in accordance with their share of the right to profits in the Company.
** To seal ** - the opposite of observing. The tax will apply to the LLC as a regular company, not as a partnership.
First, a few points to consider when deciding whether we want to look at the LLC:
1. High salaries - when we have high salary income we are sometimes interested in continuing to roll over the income at the company level (to seal) and one day draw a dividend.
2. High tax payment in the US - the more we pay taxes in the US it is worthwhile for us to observe the LLC in Israel and complete the tax in Israel.
We own a number of companies, some with profit and some with loss - in this situation in the US, it is possible to offset profits and losses between different companies, in some cases we are not required to pay tax at all.
In Israel, on the other hand, there is no ability to offset the losses, which is why we sometimes choose to seal off the companies.
** What to watch out for? **
When choosing a view or a non-view we must be careful of anti-planning allegations.
Anti-planning tools: tools that face income tax and allow them to contain the taxes and dividend distribution on the entrepreneur.
What are these tools?
** Foreign Controlled Company ** (CFC) - A taxation method that applies to a foreign resident company that meets additional conditions. The provisions of the law concerning companies of this type are intended to reduce the feasibility of diverting income outside the state in order to reduce or avoid paying tax on them.
This is an anti-planning tool which is intended to ensure the taxation of passive income on an ongoing annual basis, regardless of the actual receipt of the said income.
The principle: A controlling shareholder in a foreign controlled company that resulted in passive profits that were not distributed, will be taxed as if he had received as a dividend his proportionate share in the said profits.
The Assessing Officer can apply this taxation method only if all four of the following conditions are met by the developer:
1. Its shares or rights are not listed for trading on the stock exchange (or less than 30% of them have been offered to the public.
2. Most of his income is passive income or most of his profits come from passive income.
* Passive income - interest from interest or linkage differences, income from dividends, income from royalties, income from rent, proceeds from the sale of a property.
3. The tax rate applicable to his passive income in foreign countries does not exceed 20% - it must be ensured that this is a final tax that will not be refunded to the company or its rights holders in any way.
4. More than 50% of one or more of the means of control in it are held, directly or indirectly, by the residents of Israel (or an alternative to this).
* Means of control - the right to participate in profits, the right to appoint a director, the right to vote, the right to share in the balance of human assets after the liquidation of his debts at the time of liquidation, the right to order his own one of the above rights to exercise his right.
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YouTube Channel:https://www.youtube.com/channel/UCliNShPg9cVs5HIz3kRbe3gYou can contact us on the site - we have more then 10,000 articles in 12 languages:www.ForumNadlanUSA.comOr join the Facebook group -Hebrew:https://www.facebook.com/groups/ForumNadlanUSAEnglish:https://www.facebook.com/groups/USARealEstateForumAnd get weekly educational updates about the USA Real Estate market:https://www.forumnadlanusa.com/newsletter-signup/Contact Us At:https://www.forumrealestateusa.com/Phone: 978-600-8229Email: Support@ForumRealEstateUSA.com
Saturday May 22, 2021
Saturday May 22, 2021
Natalie Alter
# Post 2
** Possession of property in the United States under private registration or under LLC? **
One of the most common questions asked by US real estate developers is whether to hold the property in a private registry or under an LLC.
I will try to explain in a simple way the concepts that are worth knowing about the subject, and especially - the advantages and disadvantages of each choice.
** So what is an LLC anyway? **
Similar to Company Ltd. LLC is considered a separate legal entity from the holders of its rights.
Those who hold the LLC rights are called ** members **.
The LLC is registered with the Registrar of the LLC in the specific country in which it is incorporated in the United States.
** What is important to know? **
The obligations of the rights holders in this form of holding are under limited warranty.
That is to say - the debt is limited to the amount that the rights holders undertook to invest in the establishment documents of the LLC.
The liability of the shareholders of the company is limited to the amount of their investment in the company, the so-called ** limitation of liability **.
This is the main reason that motivates investors to hold the property under LLC and not in a private listing.
** Why is incorporation within an LLC considered flexible and easier to operate? **
This form of incorporation is considered more flexible and easier for both the LLC manager and investors for the following reasons:
1. Incorporation within the LLC is not subject to company laws and does not require institutions such as a board of directors and a shareholders' meeting at all.
2. It can be determined that a dividend will not be distributed proportionally among the rights holders.
3. The establishment of the LLC and its activities are based on an establishment agreement similar to the establishment of a partnership and not on an official document as the company's articles of association.
4. Limitation of Liability.
** How is LLC registered in the United States? **
A distinction must be made between an LLC with a single member and one with two or more members.
** Single member LLC ** - Held by a single rights holder.
Is considered a completely transparent body for tax purposes in the United States and all of its income and losses are directly attributable to its sole rights holder.
In addition, it does not file reports in the United States.
** With two or more members ** - The holding of the company is conducted in a similar way to a partnership.
* Partnership - a form of association designed to enable a person to work with others to generate income together, regardless of whether the parties to that partnership are individuals or companies, and whether a partnership is registered in the Partnership Registry or not.
The LLC in this case files Report 1065 and gives each member their share of the partnership capital.
Under U.S. tax law, as long as the LLC's account in the LLC is higher than zero, the distribution of funds will not be considered income, as it is a distribution at the expense of funds that the member has transferred to the LLC.
Finally, we need to fill out two reports - Report 1040 which is a federal report (to the US) plus the state level report.
** How is all this reflected in the State of Israel? **
► ** According to Income Tax Circulars 3/2002 and 5/2004 - LLC is a company for all intents and purposes (this even received support in the ruling). **
► ** The Mismatch Problem **: In Israel, tax law treats LLC as a company - that is, profits that are distributed will be considered as a dividend, while in the US the reference is as a transparent partnership.
* Transparent partnership - an arrangement according to which the company's income and expenses are attributed to the shareholders in accordance with their shares in the right to profits in the company.
* Dividend tax - a tax imposed on a dividend distributed by a company to its shareholders.
In Israel, receiving a dividend is taxable income like any other income.
The result: an Israeli resident will pay taxes without having any income under Israeli law.
In the future when the profits continue we will see them as a dividend without the ability to offset the foreign tax.
► ** Solution proposed by the Tax Authority under Circular 5/2004 ** ** - As long as the LLC is transparent in the United States, its rights holders may report its income in Israel on an ongoing basis and use it as a credit for foreign taxes paid in the United States. After that, the distribution of its profits is not dissolved. Must be consistent and take the same approach every year, starting with the first year.
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YouTube Channel:https://www.youtube.com/channel/UCliNShPg9cVs5HIz3kRbe3gYou can contact us on the site - we have more then 10,000 articles in 12 languages:www.ForumNadlanUSA.comOr join the Facebook group -Hebrew:https://www.facebook.com/groups/ForumNadlanUSAEnglish:https://www.facebook.com/groups/USARealEstateForumAnd get weekly educational updates about the USA Real Estate market:https://www.forumnadlanusa.com/newsletter-signup/Contact Us At:https://www.forumrealestateusa.com/Phone: 978-600-8229Email: Support@ForumRealEstateUSA.com
Thursday May 20, 2021
Thursday May 20, 2021
Initiated week Yossi Golan # Post 6 And last
Post Summary - Post "Opening the Lobe"
During my last role for 5 years as a technical investigator for the Air Accident Investigation Board, something has changed in me.
It was not the harsh sights and the special smell of a serious accident after a plane crash, nor the insights and findings I discovered, but mainly one very difficult insight to digest - that failure is a built-in part of the process and life.
Failure is there all the time and lurks for gym class.
But in the same breath I learned that the best way to neutralize or reject it is through proper, inclusive and perpetual risk management.
These years have made me look at everything in life through different glasses, ones that look for danger, try to identify and locate failure.
And yet it is natural that these insights have leaked to businesses as well.
Today before I look at how much I can gain - I look at how much and where I can lose.
This perception led me to a clear conclusion:
"Black Swan" (Or any other name for a failure or program that goes wrong and turns in a different direction than expected) - Will happen too happen!
The only question is - when?
And more importantly - am I Edit for failure including alternative plans? Am I willing to contain his results?
This insight that failure would come led me to analyze my investment and asset management while understanding that one day something I did not expect would happen.
My conclusion - action must be taken immediately to spread risk, while investing in various channels.
I decided that in order to generate a steady income I needed at least 3 different and independent sources.
I determined for myself the following 3 sources:
1. The military pension
2. The real estate market
3. The capital market
The perception is that any of these sources may be damaged one day and the plan is that the additional sources will cover it during this downturn until it recovers.
The pension - Relatively stable income, nothing to expand (by the way, is not immune to threats)
Real Estate - This source of income has been deliberately split into several sub-sources as an act of risk diversification - for Israel Real Estate and US Real Estate.
Israel Real Estate (my proposal for risk diversification and continuous income):
A. Activity as a mediator - specialization in land for thawing and entrepreneurial projects
B. Purchasing a rental property for rent
third. Acquisition of agricultural land in the process of improvement
D. Entrepreneurial activity in the construction of boutique buildings in Hodesh
US Real Estate (my list of risk diversification and continuous income):
A. Residential properties yield income in the US.
B. Commercial income-producing properties in the US.
third. Property improvement - through investor groups I recruit
D. Establishment of SUB DIVISIONS- through investor groups that I recruit
Capital Market - This source of income is divided into several sub-sources as an act of risk diversification:
A. Pension funds and advanced training in large companies (assuming most of us have)
B. Shares in Israel and abroad (purchase when there is "blood on the floor").
third. Trading using robots for trading in the foreign exchange market (algo-trade) and here too a subdivision into several platforms.
And now we will open the lobe even more and let's talk numbers and especially about section C under the capital market paragraph.
In general,
A standard improvement transaction is purchased at 30% lower than the market price and after deducting the cost of improvement, will yield a total return of 24% per project, approximately in a period of one year.
Duration from end to end - about a year.
Assuming a 50-50 split between the developer and investors, this is an annual return of 12%.
A rental deal is expected to yield a similar return.
What would you say If I were to tell you that I produce a return of approx 20% Per month Completely passively using an algo-trade robot that works locally in the forex market.
20% per month !!! This is the average return I produce.
The compound interest rate brings this to yields of hundreds of percent per year.
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YouTube Channel:https://www.youtube.com/channel/UCliNShPg9cVs5HIz3kRbe3gYou can contact us on the site - we have more then 10,000 articles in 12 languages:www.ForumNadlanUSA.comOr join the Facebook group -Hebrew:https://www.facebook.com/groups/ForumNadlanUSAEnglish:https://www.facebook.com/groups/USARealEstateForumAnd get weekly educational updates about the USA Real Estate market:https://www.forumnadlanusa.com/newsletter-signup/Contact Us At:https://www.forumrealestateusa.com/Phone: 978-600-8229Email: Support@ForumRealEstateUSA.com
Tuesday May 18, 2021
Tuesday May 18, 2021
Initiated week Golan # Post 5
Special Topics
In this post I will briefly address a number of issues that I thought were right to be presented for those who do not know.
1. Private home as a yielding asset
WE ALL KNOW THAT COMMERCIAL PROPERTIES ARE PRICED DIFFERENTLY FROM "SIMPLE" RESIDENTIAL PROPERTIES (SFH).
THEY ARE PRICED ACCORDING TO CAP RATE, THE CAPITALIZATION RATE OF THE PROPERTY.
IT IS IMPORTANT THAT YOU RECOGNIZE THAT THERE ARE SITES FOR THE SALE AND PURCHASE OF "SIMPLE" RESIDENTIAL PROPERTIES AS WELL ON THE BASIS OF CAP RATE.
2. Does the renovation need a contractor?
A large part of the developers who are engaged in renovating and selling properties receive 3 quotes and chooses a winning contractor according to the criteria he sees fit and the weights he gives to each criterion in the choice.
In practice, there are quite a few problems with such a contract with a contractor.
For example - the type of marble, raw materials, the quality of the flooring and more. Each of these issues ranges in very wide price ranges.
So it is true that it is possible to tighten and precise the agreement with the contractor and enter into it details - but from the experience of solving this problem - creates other new problems.
Another option is the employment of subcontractors, the employment of PM (Project Manager) to manage the project and contracting with a company such as LOWE'S for raw materials and finishing materials.
THE PM'S SALARY CAN ALSO BE TIED TO THE PROJECT'S SUCCESS. AND SO WE EARNED TWICE AS MUCH - WE ALSO WANT TO FIND IT FROM A PROMOTIONS AND DISCOUNTS WEBSITE AT LOWE'S, SAVING COSTS AND SO MAKING SURE THAT THE PROJECT ENDS ON A DATE OF SALE, BECAUSE IT HAS INCREASED ITS INTEREST.
In short, thinking outside the box can increase profit in addition to increasing the involvement of those involved in the project with a desire for the project's success in terms of price and schedule.
3. Mother's Precellation
I agree that the term sounds like a disease and it does make many investors worried. But it has a lot of profit potential.
I'M NOT EVEN TALKING ABOUT BUILDING A RESIDENTIAL COMPLEX LIKE SUB DIVISION, IT'S A PARCEL IN A SIMPLE PROPERTY.
What's beautiful is that It turns out That Americans are afraid of it, too.
This concern has yielded us huge profits in a project where we purchased a vacation home adjacent to a chalet on the banks of a lake in Alabama.
The owners of the property were concerned about the procedure. They were also concerned about the difficulty of creating another pier in the event of the assets being split. The move they deemed impossible.
In the final line,
With an investment of thousands of individual dollars, we were able to produce SURVEY with right of way, perform a paracelization, get approvals from the lake administration and the district and put another pier in a defined place.
And Hope, Hope Tarlalala.
From a place that costs about $ 300,000 or so
We got two separate houses and piers that sold for a total of about $ 800,000.
And left a handsome six-digit dollar profit.
Happily, we transferred to the sole investor-lender in the project 12% return per year on the loan. We knew there was a good profit here and we decided to give the investor a good return in advance.
The owner of the property who just sold us the property a year ago and a little asked to come, see and understand what happened here.
The pictures I attached show a picture from before and after the renovation and the lake.
4. Get out of your head
It seems to us (at least to me) that everything has a logical explanation and that everyone thinks like us.
So that's not it.
First, people from different backgrounds and different cultures think differently.
Second, in certain situations ordinary people (and we too) act in a very irrational way (and not by accident).
I'll explain by example.
We negotiated a property / mansion that we really liked.
The valuation for tax purposes is around $ 900,000.
The property is in a state that requires a major renovation and was purchased a year ago for $ 420,000.
We made an offer of $ 350,000 and it was accepted.
We took a step back. The offer was accepted too quickly.
We sent a team of 10 experts to check the roof, foundations, pool, electricity, etc.
There may have been all the information received - and the numbers turned out to be good.
We questioned all the professionals we sent and could not find the cut.
We decided to offer $ 250,000.
The customer who just a year and a half ago in April 2018 purchased the house for $ 420,000
Agreed to the sale for $ 250,000.
A simple calculation shows a loss of about $ 200,000 after sales expenses !!!
We could not figure it out.
We decided that we were not trying to make sense of the event but were continuing with cold numerical analysis, with the understanding that we needed to get out of our heads.
We purchased the house in November 2019.
We just happened to be in Birmingham, Alabama at the closing date
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YouTube Channel:https://www.youtube.com/channel/UCliNShPg9cVs5HIz3kRbe3gYou can contact us on the site - we have more then 10,000 articles in 12 languages:www.ForumNadlanUSA.comOr join the Facebook group -Hebrew:https://www.facebook.com/groups/ForumNadlanUSAEnglish:https://www.facebook.com/groups/USARealEstateForumAnd get weekly educational updates about the USA Real Estate market:https://www.forumnadlanusa.com/newsletter-signup/Contact Us At:https://www.forumrealestateusa.com/Phone: 978-600-8229Email: Support@ForumRealEstateUSA.com
Monday May 17, 2021
Monday May 17, 2021
Entrepreneur of the Week Yossi Golan # Post 4
The obligations of an Israeli real estate agent
This post will deal with the field that we all experience and know both from personal experience and if not then certainly from the experience of family circle or friends.
The Israeli mediator - points to contact. Because knowledge is power.
Okay, so you decided to sell the apartment.
You have been debating whether to try to market the property yourself or enlist the help of a professional.
You decided and applied for professional service from a realtor.
You have signed brokerage agreements with him on all your obligations. But wait ...
As part of this engagement, does the broker also have obligations to you?
the answer -
Certainly yes and right and it is important that you get to know them.
What is the requirement of the law and regulations?
Section 9 (a) of the Law provides:
"A real estate broker will not be entitled to a brokerage fee unless the client has signed a written invitation to perform real estate brokerage activities, which included all the details determined by the Minister of Justice, with the approval of the Knesset's Constitution, Law and Justice Committee."
From this we learn that a broker can charge a brokerage fee only if he has signed a brokerage order form with you and only if the form includes all the details determined by the Minister of Justice.
What are the details that must be on the form?
Regulation 1 of the Real Estate Brokers Regulations (Written Order Details) 5777 - 1997 provides:
"In a written invitation to carry out a real estate brokerage operation pursuant to section 9 (a) of the Law, at least the following details shall be included:
(1) names, addresses and identification numbers of the broker and the client;
(2) the type of transaction in respect of which the broker's action is requested, such as: "lease", "sale";
(3) a description of the property subject to the brokerage operation;
(4) the approximate transaction price;
(5) The agreed amount of the brokerage fee or the rate of the agreed brokerage fee ... "
The question arises - are these all his duties? Signing a form in which these details appear?
What about his very mission - marketing the property to potential buyers?
And the answer - of course these are not all his duties.
Section 14 of the Act provides:
"A real estate agent will be entitled to a brokerage fee from a client if all of the following are met:
(1) He was a licensee under this law while engaged in mediation ...
(2) he has complied with the provisions of section 9 (written order including all the details specified by law)
(3) He was the effective factor that led to the parties entering into a binding agreement. "
To sum up,
In order to be eligible for brokerage fees -
The broker must sign you for ordering brokerage services,
He is obligated to fill in all the details,
He is required to have a valid brokerage license at this time
And most importantly it should be the “effective factor” that led to the engagement between the parties.
Okay. The broker who signed the agreement, has a brokerage license and was the effective agent. This. Are we done? Does he have additional debts?
The answer - yes, he has. The law imposes additional obligations on him:
He may not mediate in a transaction if he has a personal interest in the real estate or transaction, unless he has disclosed this to the client and obtained his written consent.
He must not disclose to a person information that came from the customer and without his consent.
He is not allowed to engage in legal actions, such as drafting a memorandum of understanding and more.
Confused? maybe a little ?
this is fine.
The best, safest and most correct way, as always, is to surround yourself with professionals who are experts in their field and straight through who will guide you.
It will be clarified and emphasized that the author of this post is not an attorney and of course that legal advice is required before making a transaction. The purpose of the post was to balance the equation between you investors and the realtor.
In the next post, we will leave the Holy Land and return to the world of real estate in the United States and discuss various and unique issues in real estate.
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YouTube Channel:https://www.youtube.com/channel/UCliNShPg9cVs5HIz3kRbe3gYou can contact us on the site - we have more then 10,000 articles in 12 languages:www.ForumNadlanUSA.comOr join the Facebook group -Hebrew:https://www.facebook.com/groups/ForumNadlanUSAEnglish:https://www.facebook.com/groups/USARealEstateForumAnd get weekly educational updates about the USA Real Estate market:https://www.forumnadlanusa.com/newsletter-signup/Contact Us At:https://www.forumrealestateusa.com/Phone: 978-600-8229Email: Support@ForumRealEstateUSA.com
Sunday May 16, 2021
Sunday May 16, 2021
Entrepreneur of the Week Yossi Golan # Post 3 Land in Israel - risk management In a previous post we analyzed the issue of new land construction in the US and detailed a list of issues required for examination in the decision making process on land acquisition. But what is happening in the Holy Land? The answer in a nutshell - even more complex and challenging than in the US. This post is unique to the world of agricultural land. Let's start. Thawed and approved land for construction, unlike agricultural land, has very low risks, but also has low entrepreneurial profit. Therefore, we will deal with agricultural land, the huge entrepreneurial profit inherent in it and the risks. Many investors want to purchase agricultural land in Israel. The purpose of the investment - to create a passive future profit resulting from the increase in the value of the land as a result of a change in its designation. Some investors want to do so in Israel with the intention of spreading risks between real estate investments abroad and in Israel, and most of them out of a desire to purchase a property that is linked to rising real estate prices in Israel. It has been said from the beginning - the critical step, which has the greatest impact on the value of the land - here is the completion of the thaw phase for construction. Let us explain for a moment the concept: The process of thawing / change of designation - means changing the designation of the land from land that is not approved for construction, let's say an agricultural to land designated for private / saturated / commercial construction, etc. When we come to consider the purchase of land that is not intended for construction, we must consider a large number of considerations, the most important of which is the length of time until the end of the process of changing the designation. That is, the period of time that will elapse until we see an increase in value in our investment. It is clear that the longer the process, the less attractive the investment. Let's take an example to illustrate with realistic numbers: Agricultural land is currently sold in an excellent location in Hodesh for about NIS 300,000. The value of this land as thawed is NIS 1,000,000. Suppose that after a praise tax and expenses, a profit of NIS 500,000 remains. And here comes the dimension of time - if the thawing process lasts 5 years, an annual profit of 100,000 NIS will be created, which is an annual return of about 33%. However, if the thawing process takes 25 years, an annual profit of NIS 20,000 will be generated, which is an annual return of about 6.6% (and in practice even much less if we consider inflation and interest-bearing issues). While Case A is a good deal, it is clear that in Case B it is not economic-entrepreneurial, with the only difference between the cases being the duration of the improvement / change of use process. It should also be noted that most investors do not sell the land upon thawing and cut an oil coupon, but continue to build entrepreneurship as part of purchasing groups to increase profits several times over. So how do you get started claiming a daycare tax deduction? The answer - this world is very complex and depends on many variables, from the local committee, through the position of the district committee, to the entrepreneur's abilities in promoting the program and ending with the state of the economy. In this post we will try to get to know the most influential elements of the process when we come to make a wise-economic decision. The explanation will come in the following example. A few years ago, a friend came to me and asked for my opinion on a land deal that should provide him with the right to a housing unit in one of the cities in Israel. He approached me because he knew that my specialty was lands with a change of use. With the intention of showing me how successful the negotiations were, he told me that out of 200 units in the project, about 190 units were sold. Moreover, he showed me that while the average price at which a unit was sold is NIS 300,000, he skillfully lowered the price to only NIS 270,000 in negotiations with the developer. 10% below the market price. My first reaction was that it would not be responsible on my part to advise him on the matter, as I do not know the city where the land is located, nor the city building plans, nor the city craftsmen, nor local nuances, nor the forces working to advance and reject the plan nor material details. Many more. However, it's a friend.
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YouTube Channel:https://www.youtube.com/channel/UCliNShPg9cVs5HIz3kRbe3gYou can contact us on the site - we have more then 10,000 articles in 12 languages:www.ForumNadlanUSA.comOr join the Facebook group -Hebrew:https://www.facebook.com/groups/ForumNadlanUSAEnglish:https://www.facebook.com/groups/USARealEstateForumAnd get weekly educational updates about the USA Real Estate market:https://www.forumnadlanusa.com/newsletter-signup/Contact Us At:https://www.forumrealestateusa.com/Phone: 978-600-8229Email: Support@ForumRealEstateUSA.com
Friday May 14, 2021
Friday May 14, 2021
Yossi Golan # Post 2
** Acquisition of land in the USA **
You decided you were tired of flipping!
And what is the reason? Murphy.
Murphy visited you a little more than you thought.
The wall that you decided to remove during the renovation, in order to open up the space in the center of the house, actually concentrated all the electricity and air conditioning infrastructure inside.
And so they evaporated a few thousand dollars more and a good reason for the subcontractors to explain why they are not on time.
And the excel is already starting to wave a red flag.
And so in every project new "surprises" like mushrooms come up after the rain and most of them how to say gently? Not really for the better.
You have decided "so far"! You are going on new construction projects.
And you started looking for land. Wonderful.
And you even found land. overpowering.
Have you checked COMPS as written in the books? Excellent.
Have you analyzed the prices of houses in the neighborhood? Stunning.
But now let's start checking out what's really about to be purchased - the land.
But what do you check?
At the flips we sent contractors for an estimate of the cost of renovation, we sent an inspector to check foundations, roof, windows, air conditioner, electricity, water, compliance with required codes, mold etc.
But in the case of land - there is nothing of everything we are used to checking… .. it's land, it's land.
What is being checked here anyway?
You start to realize that the test is a little different, actually…. Much different.
Need to sign a purchase contract. But this is land. Is it even necessary to include a review period in the contract? Due diligence?
The answer - of course yes!
What exactly is being examined in this period?
Great question.
** To facilitate the process, I have prepared a CHECK LIST of 24 issues that need to be examined and I have even added the terms in English in important places so that the other side will understand the issue accurately. **
The answers will help you answer the question - is it even possible to build on this land? And as far as construction is possible - is it economical and profitable to build on this land?
So let's start…
**1. Is the land buildable? **
This is the first question, and even though it sounds silly - this is the most important question.
The land may not be buildable.
In such a case it is necessary to understand what the costs are for turning it into a construction bar and what is the length of time required for this.
** 2. Is the area developed? **
Undeveloped space will incur many expenses and a long period of time both in issuing permits and in preparing the land.
It is important to examine all the costs of preparing the land until it is ready for construction.
It is advisable to test using a proposal from several contractors to prepare the land for construction up to Pad Ready (and calculate on your own, once you have developed capabilities for this). ** Land development costs can turn a good deal into a hole in your pocket. **
** 3. Existence of infrastructure **
Are the required infrastructures in the area, including gas, sewage, water and electricity?
If the infrastructure is not available - the costs involved must be taken into account as well as the processes with the various supply companies, which means - time and budget.
** 4. Infrastructure constraints **
Check above and below the surface. Are you moving or are planning to move infrastructure that will impair your ability to build a house as you wish, if at all you are allowed to carry out construction.
** 5. Is there an infrastructure filler in the area? ** (It can cost up to $ 15,000)
** 6. Sewage infrastructure type - Sewer line or Septic **
A substantive question. We will return to it again at the end of the post.
If the infrastructure is Sewer - there is a set of issues to examine, for example: Is it necessary to install a pump to raise the sewer to road level if the ground is sloping?
If the Septic infrastructure - the most important question - does the soil allow liquids to be absorbed?
Sometimes the soil does not allow for the absorption of liquids and then construction will simply not be allowed on this soil.
The required test is called a Perc Test and costs about $ 500.
** 7. topography**
Even if the land is developed and all the infrastructure is in place - should preparatory work be done before foundations? Is special development and preparation work required?
Here is a case we experienced - about two years ago we considered buying land in Chattanooga, Tennessee to build a new house in a luxury neighborhood with an amazing view and schools with a score of 10. The price of land about $ 50,000 was definitely reasonable for the area and even 20% cheaper than the market value.
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YouTube Channel:https://www.youtube.com/channel/UCliNShPg9cVs5HIz3kRbe3gYou can contact us on the site - we have more then 10,000 articles in 12 languages:www.ForumNadlanUSA.comOr join the Facebook group -Hebrew:https://www.facebook.com/groups/ForumNadlanUSAEnglish:https://www.facebook.com/groups/USARealEstateForumAnd get weekly educational updates about the USA Real Estate market:https://www.forumnadlanusa.com/newsletter-signup/Contact Us At:https://www.forumrealestateusa.com/Phone: 978-600-8229Email: Support@ForumRealEstateUSA.com
Thursday May 13, 2021
Thursday May 13, 2021
# Entrepreneur of the Week Yossi Golan # Post 1 Post Introduction
Hello friends,
It is an honor for me to be an entrepreneur this week and try to enrich your knowledge with at least one small tip from my experience.
My name is Yossi Golan, 50 years old. Lives in Hod Hasharon. Married and father of three.
In my education, a mechanical engineer graduated from the Technion, with a master's degree in business administration.
For most of my senior years, until my retirement, I served as an officer and commander in the IDF, first in the Armed Forces and later in the Air Force in a variety of engineering, research and development positions.
I commanded engineering units with dozens of mechanical, aeronautical, electronics and software engineers.
Naturally, most of the developments that have been carried out "indoors" are confidential. Just saying, there is immense satisfaction in being a tier in strengthening the capabilities and power of the Air Force, through the development of the technological component.
In my last position before retiring in 2018 I was the technical investigator of the Air Force for the Investigation of Air Accidents. Unfortunately, during this period we experienced an accident corps with the loss of CIA personnel and aircraft. This role had a crucial impact on my perception of the world of risk management.
At the beginning of 2018, after more than 25 amazing years of service, I took off my military uniform and moved on to my longtime hobby - real estate entrepreneurship.
The love for real estate has pulsated in me for many years. And it turns out that for two decades I have been performing flips in the country without knowing that they are called that.
I will give an example.
Somewhere in the 2000s, when property prices were still denominated in dollars, I asked a local realtor in Hod Hasharon to offer me the property in the worst condition it had and provided it was in a good neighborhood.
The realtor led me to a 3-room apartment on the second floor of a building in an excellent neighborhood.
The feeling, sights and smells are hard to describe. The tenants - 4 women and two dogs.
On the floor vomit of dogs. Looks like an apartment after burglars paid a violent visit, a beautiful sunny day, but inside everything is dark, the smell of mildew, immovable wooden shutters and electricity bills and water stuck to the tiles near the shutters due to rainwater penetrating the house. Ahhh ... and weird butterflies flying around the house.
The best description is through the comparison to the movie "The Silence of the Lambs".
We left the house.
We closed the door behind us and the realtor asks in fear: "Well ???? Terrible, right? Now you can go to real apartments?"
"Wonderful" I replied. "Wonderful !!! Please come in and offer her $ 80,000. Maximum and final price."
I will start by saying that the value of an apartment in a reasonable condition in this location was estimated at about $ 130,000.
I would also add that the apartment did have 3 rooms, but each room had an adjoining balcony that was the size of a room in itself. And also 3 air directions and an open view from the living room.
The broker enters alone to offer the quote. An argument ensued and he returned to the front door with the lady.
At the end of a pleasant conversation I asked her "How many people came to see the property? Through the billboard, through realtors or in any way?"
"About ten people," she replied.
"And with a hand on my heart" I asked "how many came back and gave you any offer even a dollar?"
"No one," she replied.
Then a real discourse developed, in which it flattened its economic hardships and needs.
At the end of the day I apologized and agreed to pay her a high amount I had planned to allow her to close debts and move on. I have not been able to detach the feeling of compassion from the business and I am happy about that.
And yet the property was purchased for about $ 90,000.
I renovated the property almost completely by myself - from planning and redistributing the area, through demolition of walls, electrical preparations, plumbing and telephone, type B flooring, cheap new shutters and windows, IKEA style kitchen, central air conditioner, etc.
The date of execution of the project will be scheduled for silence (a term representing a planned vacation in the Air Force).
For the period of silence, I added all the vacations I accumulated and thus created a time sequence for a super-intensive activity of a month, when everything that could be prepared in advance - prepared and compatible (plans, kitchen order, air conditioners, etc.).
The cost of the renovation was about twenty thousand dollars.
Total purchase and renovation about $ 110,000.