Real Estate Investment
Real estate investment companies, despite the similarity, are not a “buyers group”. The purpose of these groups is not to make it possible for us to purchase a home because we, as investors, do not actually need a new apartment.
The money invested in these groups is used for renovations or to start a new project. The money invested is returned by the residents who pay for the work. In effect, the fund, through the use of highly experienced managers, finds construction projects that are worth investing in.
Some are within the framework of National Outline Plan 38 and others, independently built projects. Once a suitable project has been found, the fund then invests its money in its construction. Once finished, investors are repaid their investment with the addition of interest.
Advantages – Why Real Estate?
- A measured financial investment: the minimum amount needed to invest in real estate isn’t large, just a few tens of thousands of NIS. Of course, it’s possible to invest larger sums of money but, a relatively low minimum investment lets those without lots of available money save and get a high return on their money.
- Not every project: The projects selected by B Fund are important and significant ones. These are not “mass market” projects which makes B Funds a rarity in the real estate sector. The fund selects for investment only those projects that it is sure will be a success and bring in large returns for its clients.
- Significant profits in a relatively short time: The profit generated by B Fund’s real estate investments is very high. Unlike other investment channels which tend to bring in medium to large profits, investment in a real estate group is characterized by extremely large profit volumes. Also, unlike pension funds or other funds that build up profits over the space of many years and for which there is no way of knowing if they will generate a profit or how much, money invested in B Fund projects provides excellent returns in a relatively short space of time.
- Freedom of choice: B Funds allows its investors freedom of choice in relation to their investments. We examine and select those investments that we feel are the best and these are the only investments we present to our investors. But each investor can decide which of the projects we have to offer is the most attractive for an investment. This way, you also have a choice and can influence your financial future.
Frequently Asked Questions before Investing in Real Estate
Is there a connection between real estate investment and buying real estate?
Yes, and no. When we buy real estate we are making a real estate asset our own – we buy an apartment and it then becomes our property. We can do with it as we wish and, if we want to earn money from the property, we’ll either have to sell it or rent it. On the other hand, when we decide to invest our money in a real estate investment group, we are investing our money in a real estate project which, when completed, will return our original investment plus a profit.
Is it possible to buy a property through a real estate investment group?
No. The aim of a real estate investment group is to gain a significant profit in a relatively short time of just a few years. When purchasing a property, making a significant profit is not necessarily possible and this is a totally different type of business venture. Imagine the difference between lending a friend 1000 NIS and giving a friend a job. In one, you’re investing just money and in the other, you’re investing money, time and effort. In one, if you’ve agreed in advance of an interest rate, then you’ll make a profit. And the other? Who knows? The same is true of an investment in a real estate investment group as opposed to an investment in purchasing real estate – in the first, you’re guaranteed a profit without having to waste time and effort. In the second, you still have to invest but there is no way of knowing if your investment will return a profit.
What makes an investment in real estate profitable?
Real estate investments make a profit, there’s no question about it. But where does the profit come from? In a way, it’s like a “commission”. We invest our money in a new building or renovation project and when construction is finished, we get our investment back with a percentage profit. The profit comes from the new tenants of apartments added to an existing or a new building.
Are there any risks involved in real estate investment?
There shouldn’t be any risk when investing in real estate. This is an investment in specific buildings that have been chosen by the fund. It’s not a “stab in the dark” investment such as investing in the stock exchange. Here, you choose the project after being provided all the details and data and you decide on the amount you want to invest. As we already said, all the buildings are carefully chosen by the fund to be sure that there is no risk entailed to your investment.
How much money is needed to invest in a real estate group?
Unlike other investments, there’s no need to invest hundreds of millions of NIS to make a profit from real estate. Obviously, you can invest any sum, but no more than a few tens of thousands is needed to make a profit from your investment.
Why doesn’t B Funds allow investment in any real estate project but only in specific projects?
As said, there is no reason why there should be any problems with the construction projects. However, here at the fund we want to be 100% sure that your money is going into a sound investment. That’s why we select specific projects which our team of experienced experts examine from every angle before selecting those projects that are most suitable for investment.
Did You Know?
A real estate investment group is a special entity as it includes the “group” factor. The fund, which brings together dozens of investors into a single, unified group, gives investors a lot more power.
Each one invests a few tens of thousands of NIS and together they have purchasing power of millions of NIS. This lets them accumulate larger profits than other investments and in a much shorter length of time. Investors in different funds (including B Funds itself) report profits of tens of percent on their investments and in just a few years.
Beware of too large an investment: In a strange way, when investing in real estate, there’s no need, and it could even be better, not to invest too much money. The lower the investment sum, so the greater the benefits from an investment in real estate. If we invest too much, then it can be difficult to find a project suitable for such a large sum. In such cases, the tendency is to purchase a project rather than invest in it. But then all of the work and the risk is that of the purchaser – and not everybody is prepared for this.
Choose the right fund to invest in: It’s important to be sure that the fund you decide to invest your money in provides you with all the relevant information and details. Whether you choose B Funds or not, you need to be aware that not all funds do, in fact, provide you with all the necessary knowledge. Here at B Funds, for example, we provide you with all the information on our available projects, including risk levels, construction time and more. We do this so that you will be able to choose the project most suitable for you. We also give you the opportunity to invest as much as you want and advise you regarding the best amount to actually invest – information that not every fund wants to provide because they’re afraid their clients may earn more.
It’s Important to Know
The amounts that B Funds requires to invest in real estate are really low in relation to the market. In most cases, the minimum requirement is for 100,000 NIS and even more. But here at B Funds, because we also want to give those who don’t have these amounts the opportunity to invest and increase their capital, we decided to lower our requirements and, instead of 100,000 NIS, all we require are a few tens of thousands of NIS!