What is the difference between a cash transaction, combination, permutations, yield and combined? • Yair Levy on what they didn’t mention to you when you were interested in real estate investments • Chapter 10
Many throughout the country are trying to find avenues of investment that will allow them to breathe easy during The exhausting dealing with the cost of living. In the tenth episode of ‘The Capitalist’, the podcast presented by Yair Levy, an expert in commercial real estate, who brings the intricacies of the world of real estate, Levy talked about the types of transactions we face just before investing our money in a new and profitable channel. strong>
“When it comes to a real estate transaction, we have the simplest and most common transaction – a cash transaction. I have land, I want to sell it, and I will do it to the highest bidder,” he began. “The combination transaction is more complex because it usually takes longer, because it is a consideration expressed in goods. The considerations in such a transaction are completely different from the cash transaction. The first rule of thumb between cash deal value and combination deal value is that there is at least 20 percent more to the landowner in return in the combination. If you don’t have a 20 percent difference – sell the land for cash”. “, Levy replied. “Therefore, it is sometimes better for me that the interest rate starts from the moment I started building, and then for me as a contractor it is worth giving the combination greater rewards because I have saved on financing. The bank that provides the financing for the transaction, on the day of the contract, it gives you a booklet of vouchers that you are obligated to deposit the money only into a certain account number”. So if the contractor goes bankrupt, the money to complete the rest of the construction of the building will always be in the bank accounts,” he added. “It’s called an escort account, for every payment you get a bank guarantee from the bank. When the construction is finished and I have received the apartments, I can decide to sell them or rent them out”. “I don’t want to actually get apartments, but I’m sure that as the project progresses, the price of the apartment will only go up,” Yair Levy, an expert in business real estate, explained the entire Torah. More. That is why it is not possible to carry out a combination or exchange transaction without a very detailed technical specification attached to it. We usually do a yield transaction on a leased property. Then we have, for example, a 100-square-meter store that is leased for 80 NIS per square meter, and now they say that it is being sold to us at a yield of eight percent. I take the annual rent, divide by eight times 100, what who says that this store costs 1.2 million NIS”.
