The "flip" deals allow very fast profits from real estate investments. This is how Israeli investors buy assets cheaply from the bank – and sell them at tens of percent in a few months
Real estate is one of the most attractive investment channels today – but for quite a few investors, it is accompanied by a lot of worries and concerns, which are usually characterized by big, long-term deals.
Flip, or exit deals, are successful in skipping the hurdles of traditional real estate deals, offering investors a fast and profitable real estate deal in the best cities in the world.
While most real estate investors purchase and lease a property, Flip deals allow for a purchase of property at a price significantly lower than the market price (usually foreclosed assets) and sold after a short-term overhaul – reaping profits from the price gaps in the deal.
Those who opt for this investment channel not only enjoy a quick margin in a short time – they do not have to deal with rentals, worrying about occupancy, payments to a long-term management company and other unexpected expenses that may arise during the investment years. Also, when renting, the return on the property is uncertain and depends on quite a few factors that can lessen profits.
Required equity: Starting at $120,000
"Israeli investors are increasingly discovering the Flip deals, which in the past were reserved for a handful of close associates, well-connected to the local real estate market", Universal Real Estate, which specializes in Flip Investments in the US and Europe, explains.
These are good assets, in desirable areas that their owners simply cannot pay for – and are therefore foreclosed by banks or asset lenders. "We know how to locate these properties, buy them in the short window of time that the properties can be discounted at 30%-40% of the market price and after the purchase, we renovate the property and then sell it at full price within a few months. The difference between the buying and selling price – is our profit," the company explains.
"After many such successful deals, today we are offering this deal to our customers as well. Investors with equity starting at $120,000 can purchase a New York property and within a few months to a year will reap the profits.
"The whole process is accompanied by a leading law firm in Israel and there is also the possibility of financing up to 80% – which allows clients to leverage their equity significantly."
37% profit within 5 months
Universal, which has enjoyed years of experience in real estate investments in Europe and the United States, has chosen to focus its activities now primarily on these types of transactions rather than rental transactions – because of the opportunity for an Exit and making money rapidly, which has become the preference of most Israeli investors.
"Many Israelis were hurt by real estate deals that left them with false promises and a lot of headaches", the Company says. "An investor came to us who had previously bought a U.S. property in a monthly yield model and promised him a 12% yield. In fact, after all the expenses and payments to the property management company, he had less than a 4% return. He wanted to try a "flip" deal and we found a good value property for him, we listed it in his name, then renovated and put it up for sale – the property sold in less than a month.
"Only five months from the time we arrived, the same investor made a 37% profit in his pocket – $55,000 on equity of $150,000. All this, without dealing with the property, without paying a management company, and without wasting time and money."
"We profit only when our customer's profit"
The Company offers a variety of investment routes and fits each client with the right asset for him/her, given his/her equity and preferences. "We understand that there are a variety of clients at different risk levels, and we are willing to respond to even the most solid," Universal emphasizes.
"We do a thorough due diligence process on each property, and after the purchase, make sure to register it on behalf of the client – with the entire process being led by a leading attorney's firm."
The company emphasizes full transparency and shares with investors 50/50 in profits. According to them, this investment model proves itself with dozens of repeat customers: "Our and the client's interest is the same – if they do not earn, we do not earn. Therefore we have a desire and motivation to maximize the return.”