# ** # Entrepreneur of the Week - Post Number 4 ** # A deal that came out of nowhere and I made it,…

# ** # Initiated week - Post number 4 **
# A deal that came out of nowhere and I made it, or did it actually make me?

I told at the end of the second post that I decided to move the activity to the US because I had exhausted the opportunities in the country, but I left an opening. My best deal came from the least expected place.

I knew Muhammad as the owner of an apartment in Kfar Saba in a building that was under demolition and construction. An Arab-Israeli who is married to a Palestinian Arab and lives in Qalqilya. Muhammad was a carpenter and carpenter in Jaljulia.

Although I was no longer engaged in urban renewal during this period, I continued to borrow projects that were in progress, and that was among them.

"How are you, sir?" The phone rang, "Walla Muhammad, all is well, we have not spoken for a long time. Fun Halak? ” I asked. "I need to sell the apartment," he said (in the TMA agreement, if an apartment owner wants to sell, he needs the approval of the company that wrote a warning note on the apartment). "The children are going to study in Jordan and need money," he replied. “But it's not worth it to you now! In two more years, the apartment will be worth twice as much, a new apartment, why sell now ?! ”. His apartment was worth NIS 2 million, he does not have a mortgage and I am sure that the children do not need that much money for studies. After the project, it will be worth around NIS 1.3-2.5 million. From there, I tried to prevent him from making the move because it really just wasn’t worth it and I didn’t even think of offering to buy myself even though it was a great deal. It just did not seem to me to be an entrepreneur, or I just did not think about it, but the important point was that during the conversation I realized that he owns his carpentry shop in Jaljulia. "Maybe you'll sell the carpentry instead?" I suggested. "Suddenly, this is the family's bread, if I sell, where will I feed them" (and without the evil eye, children are not lacking…). "Give me the property details," I asked.

I did the test. The property is registered with the administration (now Rami), has a common house rules but no taboo, and is part of an industrial complex of 30,000 square meters built on 18 dunams. Property full of registration issues! And that's exactly the point - every entrepreneur knows that where there are problems there is an opportunity! And one figure caught my eye… “How much do you want, Muhammad?”, I went back to him. “I do not sell! This is my kids' food! ” Answered firmly. "Give me a price, if it suits me, you will stay there at a low rental price for as long as you want…" I replied.

"Not less than NIS 700,000." said. Walla, not cheap for a carpentry shop of less than 200 square meters in an area not particularly fond of Israelis, but I continued (and even without visiting there), “If I buy the carpentry shop at the price you ask, you will pay me 4,000 NIS rent per month, -10 years. appropriate?" Walla. Suited him.

"Muhammad, just one thing, do you know that half of the roofs of the whole compound belong to your carpentry shop?" (This is how it was defined in the bylaws). “I know, I signed it. That's what the architect I brought did when they made the arrangement… “Understand? All in all, he recommended a professional, and the professional probably innocently / as a gift attached the roofs of the entire eastern wing to give his share, and in retrospect it turned out that all future building rights as well.

I had no money available for the deal at all. I went to the bank, took out a NIS 150,000 solo loan to lawyers (so it was at a 0.5% interest rate) that served as my equity. I took out the mortgage after the property was appraised. There are (apparently) about 20,000 square meters of building rights and the bank's appraiser estimated the entire property at NIS 3 million. The branch manager invited me to a meeting with the district manager who wanted to understand the gap and how it happened… (I only asked for half a million for a property worth 3 million) From there I got what I wanted and the deal was completed. I bought a property for NIS 700,000 worth 3 million, without taking a shekel out of my pocket!

My goal probably wasn't Muhammad's rents, though they reflected almost 7%. The goal was the roofs. The bottom line - today, all roofs are leased to a company that produces electricity (solar cells). I rented the area without self-investment (I am not the owner of the systems and I am not responsible for them in any way). The return on the property stood at 74% and actually returned the cost of the purchase long ago. It turns out that in the same year a plan to build another floor in the complex was approved. So while the roofs are leased to systems for years to come and I have no plans to build, the building rights have increasingly tripled their value. Then - I did a mortgage refinance ... How much do you think the property is valued?

Most of the money from recycling works today in the US, and we invest together with our investors in each and every one of the transactions and are always first investors. So I made a million-dollar deal with no equity at all, and I was not even looking for a deal ????

So, are there opportunities in the country?… Let's go back to the US.
Tomorrow - how we almost fell into the trap, and "Dare came out sweet"

Ohad Arad - Ohad Arad

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