"Guaranteed Return": Red lights in real estate

From "If you don't sign now the deal will close" to "A once-in-a-lifetime opportunity".

The real estate field is full of factors that try to remove your defenses on the way to closing a "dream deal". This way you will know how to avoid cheap temptations

Amit and Hagar Dror

24/04/2022

Sunday, 24 April 2022, 09:02

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"You must come and sign today by 12:00 noon, otherwise the deal closes."

If you are a real estate investor and the investment body through which you have considered investing told you this sentence, a sign that you must run away. You must give up the investment at that moment. , And not just in real estate.

There is no one who has not dreamed of a high and quick return on real estate investment, which he managed to find at an incredible time. But that dream can sometimes cause us not to notice the difference between reality and imagination. And they will do anything to sell us dreams. In the end, an investment body is also a sales body, there is no way to escape it. The responsibility for identifying a "sting" rests with us, and we can not trust anyone, who will always be by our side. Knowing how to identify who is in front of us, and knowing how to stay away from bodies that raise suspicion in us, even the easiest.

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Do not be tempted to trade in the field (Photo: ShutterStock)

To help you identify, prematurely, investments that can be risky, we have collected for you a few more sentences that if the investment body tells you them, you should take your feet off and go, just like that.

Your warning signs

• "Guaranteed return"

  - one of the "classic" and most dangerous sentences, which should make you understand that the body in front of you, is at best, amateur or at worst we can.

  There is really no possibility for any investment entity to provide promises of a particular return.

  It is clear that any investment is at risk, even with a deposit in the bank there is a risk that its realization is very weak - the stability of the bank.

  When there are so many factors affecting the expected return, it simply cannot be guaranteed.

  Among the factors: the trends in the real estate markets, the level of interest rates, the geopolitical and security situation in that country, elements of supply and demand, and the prices of apartments and rents.

• "Pre-checks"

  - based on the story of the guaranteed return, if you are offered a deal in which you receive the income in advance, whether by paying checks in advance or in any other way, it is probably a question of the money you pay yourself.

  That is, profits are not at all certain you will see from such a deal.

  The obvious reason is that there can be no situation where you get the money in advance, when it comes to a deal with chances and risks and you have to go a long way to make a profit from it.

• "A rare opportunity or a once-in-a-lifetime opportunity"

  - the favorite phrase of salespeople, who want to create in you the feeling of missing out and the urgency to get on the investment train now.

  Otherwise you will surely regret it.

  The reality is that there are quite a few lucrative investment opportunities in the real estate market in Israel and around the world, but we would not define any of them as a rare or once-in-a-lifetime opportunity. Sales laws “win.” Not only is that investment body probably inaccurate, but even in this case, the viability of the investment is questionable.

• The investment body or local entrepreneur does not invest in the transaction themselves

  - When a company or business sells us their products and services, we want to get from them the feeling that they believe in what they are selling to us, that they themselves use the product or service or that they would recommend to friends or close family to purchase them.

  When the investment body or entrepreneur, who carefully examined the deal before they started marketing it, does not invest in the deal themselves, a sign that they did not find it worthwhile and worthwhile and they do not see the future potential in it. Our investment entities, is the identity of interests between us and the investment entity.

  This is a red line for us if the investment body does not invest in the transaction itself.

  Investment bodies know that this is one of the first questions of investors, when they come to examine investment and are aware of the great importance of the matter.

  So if they still choose not to invest their money, a sign that they trust that you are inexperienced investors or that you underestimate the value of the matter, thanks to all sorts of nice words they will throw into the air,

• "We have been active in the market for a year. Listen, the local entrepreneur is a new and energetic player"

  - experience is a very important component in real estate investments. When we choose our investments, we always make sure that the investment body is a veteran body with a record. Even when the water is stormy. Therefore, we decided that we would only invest through investment bodies with long experience and that they made many transactions, with the priority being that they are "graduates" of the subprime crisis. We want these entities by our side, when the market shakes or there is an unexpected crisis. Lack of experience or little experience, is something that should surely make you put your feet out of the deal, we recommend that even if it is a few years experience, consider your steps, especially in the period The last bit is deceptive.

Examine well, even if the deal looks dreamy (Photo: ShutterStock)

Amit and Hagar Dror (Photo: Lior Goldsad)

The more the body that offers you the investment tries to work harder on your emotional side and takes various and varied measures to remove the fear you express, from the various risks involved in the deal, the more you will know that this is a worthless deal.

Investments are always subject to opportunities and risks.

It is expected that a reliable and professional investment body will reflect the full picture, without missing details from us and without beautifying the situation, an investment body that does not behave in this way, probably does not really want your good.

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