If you are a staunch supporter of the development of Israel or just a business minded investor, TAMA 38 might interest you. Launched by the Israeli Government about a decade ago, TAMA 38 is a real estate program that offers developers incentives to modernize older buildings, elevating them to current building codes and making them earthquake proof. In exchange for the renovations, builders are given air rights to further develop these buildings by adding additional floors.
In the 40s and 50s Israel saw a large influx of immigrants, forcing builders to create housing rather quickly. Most of the buildings were three or four stories high and built on stilts. What many don’t know is that Israel is located on a major earthquake fault line that runs up the Syrian-Jordanian border. Seismologists predict that every hundred years or so there is a possibility of a large tremor or earthquake in Israel. Should that occur, there is a strong chance that these old buildings could collapse, posing a real danger to civilians throughout the country.
Furthermore, over the last 70 years the country has considerably grown in population, creating a significant housing shortage. With little land left to develop in core areas and existing housing in need of major renovation, the government introduced TAMA 38 as a potential solution.
TAMA 38 building projects are typically located in high demand areas with expensive real estate values. Developers renovate a TAMA building and add on two or more new floors which offer the best views and subsequently the highest profitability. This allows developers to turn a large profit on each project, while at the same time provide existing tenants a restored building with safer living conditions. Once a TAMA project is completed, the value of the building increases exponentially and everyone involved comes out ahead.
American Israel is a professional management company specializing in TAMA 38 development projects. Executives at American Israel are former North Americans living in Israel and fully understand that investing in a foreign country can be daunting. “We make the process as seamless as possible for our lenders,” explained Donny Fein, head of business development at American Israel. Like their name, American Israel integrates American lenders with Israeli real estate opportunities to produce a profitable relationship.
Purchasing investment property in Israel generally earns a maximum profit of 5%. With a TAMA loan, you earn closer to 12% per year and it comes hassle-free without the frustrating phone calls when something malfunctions. Moreover, should you decide to purchase a renovated or newly built apartment in the building, you will be given a reduced price.
Investing in TAMA projects offers Americans an opportunity to really help Israel while also helping themselves. Lenders in TAMA projects are helping to develop the country, improve living conditions and create jobs, in addition to earning a substantial return on their investment.
TAMA projects start from the roof up, requiring much less financing than a new building project would. Lenders earn a high interest rate with minimal risk and typically see a return in 30-36 months from beginning to end of the project. According to Fein, there are so many TAMA buildings throughout the country, they can afford to be particular in what they select to invest in. Government studies indicate that over the next 15 years more than 15,000 residential apartment buildings will be rebuilt to TAMA 38 standards.
Many Jews living in the Diaspora welcome opportunities to support and protect Israel. American Israel offers lenders that opportunity in an income earning way. “These opportunities truly provide lenders a win-win situation,” said Fein. “Living in Bergen County, you can safely invest in a TAMA project and feel connected to Israel.”
If you are looking for a smart investment option that will also help people in Israel live in safer and nicer homes, consider investing in a TAMA 38 building project. For more information please visit www.AmericanIsrael.com or contact Donny Fein at [email protected] or 917-559-1828 in the U.S. or Israel/whatsapp at +972-54-227-0863.
By Andrea Nissel