# How was a developer / contractor selected for construction abroad? - Ofir Harari - Post…
# How was a developer / contractor selected for construction abroad? Ophir Harari - Post 3
# Initiated weekOfir Harari # Post 3
*** How was a developer / contractor selected for construction abroad? ***
Hello everyone, third post in the group - so happy Tuesday everyone!
Today I wanted to talk about choosing an entrepreneur / contractor.
As is well known, real estate transactions abroad do not have the laws of the country, there is no sales law that provides protection in certain types of transactions, and there is no lending bank and more.
Therefore, when we purchase a property directly from the developer / contractor before the end of construction, we must hedge as far as we can our risks that may occur in an extreme case - bankruptcy of the developer / contractor / management company.
So "end of act - in thought first" What should I check in the first place? (Partial list only)
• Who is the developer? Thorough inspection of the developer himself, what projects he built, did he own bankrupt companies, did he deliver on time, are there any complaints about the quality of construction (balconies are falling נ)
• Who is the construction company? What is their seniority in the industry, do they meet deadlines, what is the quality of their construction, how many permanent employees do they have, what insurance do they have
• Developer / Contractor What is their resume? Is the property under construction / Is the purchase of a property "on paper"? When purchasing a property under construction - it is important to check at what stage we are in construction?
• Has the developer / construction company previously built projects of the same size in the same area - it is important to understand that they know how to calculate costs and that they have experience in similar construction.
• As in Israel we want to see a valid "building permit" and understand what the construction company can build, it is important for us to check especially if we are before going to the ground, does the construction company have all the permits? If a permit is missing - what is the permit and how critical is the permit, checking building permits with the municipality of course (do not rely on answers from the construction company) In England, for example, you can request the LEGAL PACK.
• What collateral are there? Who is the lawyer of the entrepreneur / trustee? What insurance does the construction company have? What happens if there is damage during construction? On what cases does the developer insure himself during construction? Is there a lending bank? Is the money with the construction company or with an attorney in charge of trust?
• There is a building permit - great! Should we check until when the permit? When did he receive it? What happens if he does not meet the deadline and the permit expires? Is it easy to get an extension…
• Payments to the construction company - what are the terms of payment? To whom does the money go? (Loyalty account according to the rate of construction progress or directly to the developer?) Payment after completion of each stage of construction? Small payment on purchase and everything else upon receipt of a key (10/90 20/80)?
• What collateral are there? Who is the lawyer of the entrepreneur / trustee? What insurance does the lawyer have? What happens if there is damage during construction? On what cases does the developer insure himself during construction?
In England for example I also check if the lawyer is a member of the Bar Association (SRA)? And examining what financial protection the association gives us?
• Prices - what is the price per meter? What is the price per meter in 5 similar projects in the near area?
• Who are the competitors of this project? How many competitors are offering for sale? Under what conditions?
• What is the demand for such properties in the area? (Apartment for students, for example - is there a university within walking distance? Is there a demand for accommodation on the part of the students? Is the expected rent realistic for the area…)
• What is near the location of the project? (Are we building near an atomic reactor, an urban landfill, a sports stadium, a pottery factory or perhaps near a hospital, university, pedestrian mall, government offices or shopping center)
• When purchasing properties abroad, we are assisted in the management of the property by a management company - which management companies are relevant to the management of the property? What are the expected costs? Does the management company have a competitor / company that can replace the management company? Am I committed to a management company or can I manage the property myself?
• How is the apartment registered in my name? warning label ? Tabu registration ? And how can I test this.
• What are the expected expenses for maintaining the property? And who owes them? The tenant / property owner? What is the amount of the GROUND RENT SERVICE CHARGE, etc., who pays for the property tax, water, electricity, gas - what happens if the bills are not paid?
• What is the usual rent in the area? What is the quality of construction and size for different rental prices in the area, who are the tenants in the area?
These are a partial list of the tests we do before marketing properties, it is important to understand these points and of course there are many more points.
Have a great day
Ofir mountainous
* In the photo - I am before the Corona era when it was possible to fly, examine the projects under construction, meet face to face with the developer, the contractor, the managers of the management company, realtors, an attorney and more
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# Entrepreneur of the Week - Ofir Harari # Post 3 *** How to choose a developer / contractor for construction abroad? *** Hello everyone, third post in the group - so happy Tuesday to everyone! Today I wanted to talk about choosing a developer /…
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