All Forum Posts by: Alon Haramati

Hi All,

I live in Tel Aviv, Israel, and I'm following the trend here on two main streets since the outbreak of COVID-19 - Almost every day another store is added to the list of stores with a "For Rent/Sale" sign. 

I feel sorry for the business owners and hopefully they'll find a new path soon. In the meantime, seems like these spaces won't be rented anytime soon. 

What would be the best way for investors (with liquidity) to utilize these spaces? I thought that due to the rise in e-commerce, we could buy these spaces and convert them into "last mile" storage facilities for online retailers. Numbers have to make sense though, as the purchase price per SQFT and annual municipality taxes aren't cheap. 

Same applies to office spaces that are starting the same trend. Here a different allocation is required. 

Any ideas?

Thanks,
Alon
 

[I'm a small investor from Tel Aviv, Israel, investing mainly in Israel and Central-Eastern Europe]

Hi All :)

I'm trying to  compile a list of metrics to use in order to identify new markets to invest in Europe.

Thus far I came with the following metrics:

1. Rental Yields (historic and projection)
2. Mortgage Interest Rates (historic and projection)
3. The spread between the two above
4. Taxes (Upon purchase, tax on rent and on capital gains)
5. Tourism (trend)
6. GDP per Capita (historic and projections)
7. Median purchase price per SQF
8. Median rental price per SQF
9. Median Free income (after income tax)
10. Nearby Hospitals (existing and planned)
11. Nearby Airports (existing and planned)
12. DoingBusiness Score (various criteria related to Real Estate )
13. Population Growth rates (historic and projections)
14. Nearby Public Transportation
15. Divorce Rates
16. Average Marriage Age
17. Job Growth
18. Household Debt (trend and projection)
19. Country Debt (trend and projection)
20. Is there a financial institute that will refinance an asset I purchase at 75% LTV or more (implementing BRRRR)
21. Owners:Renters Ratio
22. Tenant or Landlord biased law system
23. Hi Tech corporates planning to open HQs in the area
24. Currency Inflation/Deflation (historic and projections)
25. Construction permits (historic and projections)
26. Constructions starts (historic and projections)
27. New apartments sold
28. New apartments median price
29. Existing apartments Sold
30. Existing apartments median price
31. Total debt through Mortgages (historic and projections)
32. Unemployment Rates (Historic and projections)
33. Average number of dates a new/existing apartment is for sale
34. Other demographic attributes and preferences of the locals 

Thanks,

Alon

[I'm a small investor from Tel Aviv, Israel, investing mainly in Israel and Central-Eastern Europe]

Investment Info:
This is a very (very) small deal, but thought to share it since it demonstrates relatively high ROI and utilizing available resources.

It was one storage room in the ground flooe of an 8-apartment building that was converted into 5 individual storage rooms. Originally it was one 430SQF and now each of the 5 units is around 50SQF in average.

Purchase price: 0NIS (New Israel Shekel)
Cash invested: 23,000NIS
Renovation time: 2 weeks
NOI: 14,400NIS
Taxes: 2,450NIS
Net Cash Flow: 11,950NIS
ROI: 52%


The whole building is owned by my family and each of the 8 apartments holds a portion (1/8). For 20 years we just held there my father's construction tools and equipment.

What made you interested in investing in this type of deal?
In one of the BP Podcast episodes, Brandon and the guest (sorry I can't remember the name and episode # - listened to most of the 339 episodes) explained how one should utilize all the facilities and areas to maximize NOI. This storage room wasn't in proper use ("money on the floor") .

Bringing up this deal here since it demonstrates (1) why one should think of utilizing all (or at least most) of the resources and opportunities in asset we already own to increase NOI (2) relatively high ROI. At this stage of my personal journey, I'm looking for cash flow more than building equity, and returns of more than 50% per year with almost 0 work invested in this deal is a good example.

How did you finance this deal?
Cash - 23,000NIS is around 5,700$ these days ;)

How did you add value to the deal?
Wouldn't be easy to find 1 tenant to rent the whole 430SQF room, so split it into 5 individual units. Easy and cheaper to rent. This is a residential area, small apartments, and there is always extra storage space in demand by surrounding residents.

What was the outcome?
We left one 50SQF unit for our own use. The other 4 units were rented within 1 week of publishing in the local Craigslist.
* Just as a side note, the rent price per SQF is identical to residential rental in that area, with nearly 0 repairs and maintenance :)

[ Plan of the space before ]

[ Plan of the space after ]

[The mess before ]

[ In the process ]

[Today]

Hey All,

I have enough cash to purchase 1-2 units in a few markets in Europe (I reside in Israel; the US is too remote). I'd like to purchase a small apartment building instead (using leverage and partnering with friends). 

What are you normally doing with cash you have which you'll use for your purchases? The issue is twofold:

1) I have no idea when I'll find a deal, yet I have to be able to liquidate (the principle) quickly

2) In the meantime I would to have some yield, at least inflation adjusted + some percentage 

Many thanks,
Alon

* Honored to write here. In love with the podcast, Josh, Brandon, David and all the guests and contributors. You're really awesome! 

Hi All,

I'm kindly asking for a recommendation on a book that deals with the relationship between the Real Estate market and Macroeconomics. 

Specifically, I'm looking for economies in Europe to invest in and found "Essentials of Real Estate Economics" relevant, however from reading the reviews, it seems to be a little outdated. 

Some of the principles the book should be dealing with:

• GDP
• Unemployment rates
• Income measurements
• Inflation rates

Any reference to a book covering these topics? 

Many thanks,
Alon

* Apologies for my poor English :)

Yep! :) Cofix as well 

Yonah and Grant - Thank you very much!

I'll try to reach out to some local businesses as you suggested. Since the asset is pretty small, I think a large chain of coffee shops (i.e. the local version of Starbucks) could maybe work. 

Thanks again!
Alon

Hi,

My family owns a small store (~400 SQF) in Tel Aviv, Israel. In the past year, 2 renters concluded their contract before the schedule, and the current (3rd) wants to terminate it as well ahead of time. It's in a good area, where business remain stable, yet in our specific case the cashflow of the businesses didn't hold. 

So, I thought it would be better if this time, instead if listing the store on the local Craigslist and signing the lease contract with whoever agrees first to the terms oft he contract, I'll go to solid businesses, perhaps chains, and check with them whether they are interested. 

Would love to hear suggestions from you guys here :)

Thanks,
Alon

* Apologies for my poor English :)

Very Thorough writing Hugeus. Thank you!

I'm from Israel and looking for opportunities in Berlin's market. The fact that Berlin "grows" by ~30,000 each year in population, Startup companies relocate there and yet there's a significant price difference per sqm compared to other major cities in EU such London and Paris - probably indicates there is still room for prices to increase. Your excellent 360 review on Berlin was very helpful. Thank you! 

As for your last question - "Do you see a better market than Berlin in Europe?" - what do you think about Dublin? Shares the same growth characteristics of Berlin, similar prices yet rent prices aren't as strict as in Berlin's case (due to local regulations).

Thanks,
Alon