“Why invest in the USA?”
Many ask why the USA, it is far away, I don’t know it, why not Greece? Why not Georgia? Or maybe even a holiday apartment somewhere closer? A book could be written about this, but in this article we will focus on 7 main reasons that we see as the answer to this question and why we, as experienced entrepreneurs, prefer the American market by a wide margin
- Lots of opportunities: the American market is a sophisticated market with many sellers and buyers – millions of transactions per year,
So that means millions of opportunities a year. - A lot of information, available and open to everyone: the transparency in the American market is great and makes it very easy for us as entrepreneurs and investors, for example, information such as: how much the property was bought for, how much it was sold for, its entire history, etc. – all at the click of a button in a transparent and visible way for everyone.
- Good legal protections for LLC investments, Title insurance:
In Israel, when you make a contract, you go to a lawyer and he checks that there are no encumbrances, etc. and then we sign. In the US it’s different! The title company is responsible.
She checks the full history of the property, which does not have any encumbrances (not only a mortgage, but also any other encumbrance).
And there was, and the title company made a mistake and didn’t discover a certain thing?
The mistake will be at her expense (this is the meaning of title insurance), and such a mechanism (unlike the example of a lawyer in Israel) enables a very high level of protection! - Very wide market circles: the US market is huge. 50 countries
And in every country there are many markets. Many large countries, very many market cells in each country, ability to move from market to market according to market trends, etc. The bigger the space – the bigger the circles.
what is the meaning of this?
In Israel, for example, North Tel Aviv is the first circle and Kiryat Shmona is the end circle (not in a negative way of course, only in terms of market circles).
The meaning of the circles is the rate of arrival of the effect of changes in the market.
ZA, when the price goes up in Ramat Aviv – it will take some time until it reaches Kiryat Shmona. Haifa/Yakneam for example took 4-5 years to reach the price increases that started in Tel Aviv.
If we return to the example of the USA, then the center of the circle is California, San Francisco, Manhattan, Silicon Valley.
After that the next circuit is Florida, Nevada, and Agas. ZA, here too, there are now markets that haven’t even made it halfway through the price increases. The bigger the space – the longer the opportunities.
5. Diverse and many financing options: from banking to non-banking,
The breadth of this world in the USA is vast and allows a great deal
Creative ways of financing transactions
6. High yields from SCAD in emerging markets: if we bought the property
Before the price increase in our area, and after that a price increase will come –
So when the rent increase comes – our property will already yield higher returns.
Of course, the smart thing is to locate the property for purchase at a lower price than the market
and lead the improvement process so that the high rent
Meet our property as soon as possible. This is exactly the professionalism.
7. Low prices in growing markets, low entry level: let’s take buying as an example
A building with 40 apartments around 4 million dollars and with a yield of around 10%.
Where can such things be produced?
Some people will answer me “in Greece and a few other places”.
True, but with your permission I will bring you back to point #3, which is the legal insurance and the high security in light of the transparency and depth of the title’s inspections, this is again something that makes the USA unique.
These are the main reasons why we really like to invest for ourselves and for our investors – precisely in the USA.
