# Entrepreneur of the Week Amnon Bar
# Post 4
The bottom line is we want to invest in a place where there will be demand for both homes and rental homes, in other words in a city that has a constantly positive migration. Phoenix in Arizona is a clear example, the number of companies moving there and producing jobs is constantly increasing, but these days the price of homes has reached a very high price that it is no longer profitable to buy a property there due to rental prices that are far behind relative to home prices. This is why I sold one of my houses there as I mentioned in a previous post.
There are 50 countries in the US, some more suitable for investment and some less, this issue needs to be understood. Since there is a tendency for an older population to move to warmer countries, then southern countries are a good destination, but there are a number of other important criteria some of which I mentioned earlier. There are sites on the Internet that compare countries in terms of investment in rental real estate according to a number of these criteria that the sheet is short here to detail, the transparency of information as I mentioned earlier, helps a lot here.
Every city has good and less good areas. Many Israeli investors in the US invest in areas that are considered less good (crime rate is relatively high for example) because there house prices are cheaper and properties can be purchased below market price which improves the monthly return as I mentioned in the previous post. I actually invest in better areas as my late father taught me who advised me to think about the sale when buying, i.e. to buy such a property that will sell well even in less good times.
How to buy a house
The way to buy a property in the United States is different from that in Israel. Unlike in Israel, there is no need for a memorandum of things and there is not even a need for an attorney to represent the buyer or seller. The transaction is executed by an objective trust company called TITLE which includes neutral attorneys who do not represent either the buyer or the seller.
The buyer and seller use the services of agents such as realtors in Israel, each agent must be qualified and have a government certificate to engage in mediation. The seller's agent advertises a property for sale with a great deal of details about the home including the owner's statement of any faults the seller is aware of. This is a legal clause that requires the seller to report truth, otherwise he will be sued. We have no such thing in the country. The buyer does not pay a brokerage fee at all, the seller pays the brokerage fees to both the seller's agent and the buyer's agent.
The buyer submits a purchase offer using a standard document, if the seller agrees to the buyer's offer then he signs the offer and it is considered a contract. The contract is transferred to the trust company, which includes a number of attorneys who examine the legal status of the property, for example, on which there are no foreclosures. On the other hand, the buyer transfers the purchase money to a trust company. If everything is in order, then on the day of the transfer of ownership (called Closing), the trust company registers the property in the registry, provides the buyer with an insurance certificate that the property is free of liens and simultaneously transfers the funds to the seller. That was the end of the ceremony.
Renting a house
From then on the house moves to a management company that represents the buyer and takes care of everything that is needed. Finding a reliable trust company is similar to finding an agent, usually friends' testimonials or searching for testimonials online.
A management company charges a fee for finding tenants and for managing the property. After the house is occupied, the management company handles everything related to maintenance, requests of the tenants or the requirements of the municipality (for example pruning tree branches that invade the public space) in case there is a repair that costs relatively high then the management company asks for approval from the landlord. Every month, the management company transfers the NIS to the owner's account by bank transfer. Some investors prefer to save on management company costs and remotely manage the property themselves. I read in real estate forums on Facebook questions of such investors what to do when a tenant does not pay, etc., I prefer to sleep quietly for a fee of 8% -10% commission.
If a tenant does not pay, the management company sends alerts and if it does not help then it may evict the tenant from the house through the court. In contrast to what is happening in the country, the evacuation process takes up to about a month and a half. Such cases have happened to me twice in 20 years, so it is extremely rare. In Israel one can only dream of such an arrangement. See you tomorrow.