You already know that I like coffee, and at every opportunity abroad I like to sample cafés from the lists of recommendations I have read or watched. That is how I arrived at a nice café in a small village about an hour from the capital, run by a young couple who left Israel about a year earlier and decided to settle in the country.
The conversation was held in Hebrew, of course, and mainly dealt with the difficulties they experienced in Israel as against the quiet and calm they experience here. They told us about the many Israelis who visit the place following the publicity on social media, and about the longing for the Israeli street food they were used to in Tel Aviv. When another Israeli family walked in, who it turns out had watched the same video about the place that I had watched, the conversation flowed.
The owner told us about a country house on a large plot that was for sale right next to the house they had bought, at a ridiculous price, and the father of the family that joined us immediately asked him to take us to see the place.
It is a house that at first glance looks ready to collapse, with a huge area behind it in which the current owner of the house grows vegetables, a few chickens, a vine climbing over the back porch and a few fruit trees. The price is truly ridiculous, but the house needs serious renovation. While touring the place I see the father of the family negotiating with the owner of the house, mediated by the café owner, and while I try to calm things down and raise questions, the two are already closing on the price, with the café owner promising that he will take care of the renovation and regularization of the place for the buyer.
They sailed off into their fantasy worlds about the vegetables they would grow in the yard, about their next vacation, about the room they would add to house the whole family and guests, and the kitchen with the barbecue that would be built in the yard. All this while I try to explain to them that a business plan is required, and to see whether there are sufficient sources of financing at all and what the required costs are, and whether it is even possible to build an additional room. Nothing helped... They were excited about the opportunity, and ran to the deal.
Some of the readers will raise an eyebrow, and some will see in this an opportunity and the “courage” of the father of the family, who jumped at the opportunity and made an excellent deal.
Without expressing an opinion on the merits of the deal, I want to offer a few insights on the matter:
- As in every area of life, and perhaps especially in real estate investments, a deep understanding of the field and deepening one's knowledge of the material is important (in this case the area in which one invests, trends, prices, the way the market behaves, even laws that vary between countries and sometimes between municipalities).
- If you are investors and you do not wish to enter a high-risk adventure, make sure that the developer you chose to invest with has successfully done and completed a number of projects similar to the one he is now offering you. In the same business model. In the same type of deal. Experience and a track record of delivery are very essential in this field.
- Examine the property thoroughly before you commit to buy it, a legal, engineering and economic review. You never know what surprises may be waiting for you under the flooring or in the walls, not to mention the legal documents.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית