2024-03-01 15:25:59
“There are not enough women in the field of real estate because from the beginning the whole concept of women with money is problematic and needs to be changed.” So says entrepreneur Neta Or (36, divorced + 2) who manages to manage a huge real estate empire in the US on her own from Herzliya. She is not Coming from a family of entrepreneurs, she doesn’t have a degree nor did she have equity at the beginning.
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She doesn’t believe in everything written in the unofficial rule book of entrepreneurs in the world of real estate, admits her failures and publishes them on Facebook, once even burst into tears in an apartment in Cleveland after realizing that a contractor had stung her. And investors are flocking to her, perhaps also because she managed to crush the American conservative approach, through unmediated Israeli directness.
“A hard blow to self-confidence”
Already at the age of 22, she flew to New Zealand for a trip and stayed there to establish a sales business with 25 employees. “But then I realized that I would stay in the mall for the rest of my life if I didn’t move forward,” she says, and decided a few years later to return to Israel. “I had no experience here, but I had thoughts of an entrepreneur who made millions and managed employees. When I went to job interviews, they looked at me strangely. They said I had no experience on the sales floor and I didn’t have a degree. It was a severe blow to my self-confidence.”
A mutual friend put her in touch with someone who deals in real estate, and even though she had zero experience or understanding, she went for it. Everyone would do it.”
In retrospect, her father was right, it was a bad investment, but her sense of adventure pushed her into the world of American real estate. “It started with thoughts of investing the little money I had in things that would make me money. But I knew I was also good at operations and I didn’t want to be at the front, so I found a job as a behind-the-scenes employee at an American company.” It worked well, until the thorns began to bother her again, and Or found herself at a crossroads.
“I was tickled to get back to writing a little, and I opened a Facebook page where I shared my struggles, anxieties and concerns as an independent entrepreneur. I was in the field for many years but I hardly looked around, and I didn’t realize how different my voice and approach were, little by little investors started coming through the posts and that’s how it unfolded I have the activity.”
Because you weren’t pretending everything was rosy?
“I guess it was a combination of several things, without trying to be something I’m not. Something that was very new to me because all these years I tried to pretend.”
Who were your first investors?
“Mostly Israelis who live in the USA, and slowly I developed, found a local partner and collaborations. But basically I always worked alone.” The first investment attempts were in Texas and were successful. Then she lost $300,000 out of her own pocket due to what she calls “arrogance and a bit of inexperience, but luckily there were no investors involved, and it was a great school to continue on.”
“Investors walked hand in hand with me”
She was quick on her feet and didn’t hesitate to share her losses, mistakes and conclusions with all her followers. “I remember being at an airport and writing this effusive post and I was sure that I was ruining my career. When I got off the flight I had 20 private responses from investors who wanted to go hand in hand with me, and then I realized that in the end the personal connection, taking responsibility and trust are something that is much more important than a line Profit. Of course that’s also important, but in the end you do business with people first.”
The Manhattan skyline, New York (Photo: Reuters)
Or’s business in the US is actually a limited company that she manages alone. In addition, she has an entrepreneurial company with a local partner and behind them already dozens of housing units and entire neighborhoods in Texas, and if all this is not enough she also works with another company in Jacksonville.
“The division of roles is clear, and I am responsible for the macro management of the project, strategy management, recruiting investors and they do the actual work, which is actually the core of the activity.” In the last year, she has been working on eight housing projects.
How do you do everything alone?
“In the last four years, I managed mainly because I have no need for salespeople. I have never put a sponsored promotion, and my posts do the job by themselves, they bring in exactly the right people.
I am working today in the model of a centralized Zoom Facebook post, where I give the main points of the project in general without numbers, in accordance with the restrictions of the Securities Authority and from there anyone who wants to move forward makes a personal meeting with me. I insist on 90% closure out of all the personal meetings and the project is underway.”
It’s an interesting time to talk about real estate. While there was a slowdown in Israel even before the war, what’s happening in the United States, which today is also preparing for elections and in a difficult period?
“First of all, let’s go back for a moment to the Corona period, which in my eyes is the perfect proof that no one really knows what is going to happen, and the reality is surprising. People sat on the fence and thought there would be a crash, and in the end the markets flew up at the highest prices ever seen.
There were entrepreneurs who entered projects without expecting the interest rate to rise. In general, there is a general slowdown in the US, but I can tell you that it is a big mistake for investors to sit in Israel, read the analyzes and refer to it. It is like me telling an investor in Israel that real estate prices have risen in Tel Aviv, so I recommend investing in Nahariya, it is not related.
Think about what’s happening in the far reaches of the US, you have to take into account that every market is a micro market, at the level of the city, the street and the neighborhoods. You have to treat the markets individually. What’s more, there is still a very large gap between the supply of houses and the demand, there is a shortage of houses.”
How different is the American market from the Israeli one? There is now a trend of wanting to invest abroad also because of the war and the instability here. Most Israelis turn to the neighboring countries. Is the American market relevant to the audience here?
“First of all, this is a very different market, for better or for worse. But anyone who does not have an apartment in Israel is better off buying their first apartment in Israel. It has a tax advantage, exemption from purchase tax up to a certain level and the possibility of receiving 75% of the rent. I am not a real estate consultant in Israel, But I think it’s true. I also own local real estate even though my practice is entirely in the US.
Beyond that, one of Israel’s advantages is financing and leverage, the interest rates in the US are higher mainly for foreign investors. The entry level in Israel is higher than the US and this is a point that often attracts investors. But I want to say something about low price investments. If an investor has $50 or $70,000 and is going to invest in the US in a group setting, that’s fine. But if he’s going to purchase private property in his name, chances are it won’t end well.”
Why?
“Because the amount is too low. There is this perception that let’s buy a property in the US for $50,000 that will be rented for $900 a month, and everything is true on paper. The problem with these publications is that no one bothers to check where the property owner pays the property tax in the US and not the tenant.
In my eyes, this is one of the terrible deceptions that use the knowledge of the investors that they know from the rental culture in Israel and throw it at the US. In Israel, people do not know what an empty property is. You have an apartment in Tel Aviv, one goes out, one comes in, he also whitewashes it and shows it to you.
In the US there is no such thing, you have a management company that does everything, the properties are empty, there are tenants who do not pay much more rent than in Israel, there are no checks in advance, there is no bank guarantee and the rental culture there is not what we know from Israel.
There are advantages of the tenant eviction law in the republican states, mainly for the benefit of the property owner and higher returns. But I can’t hear these sayings of ‘let’s make a double-digit return on yielding real estate.’
“Investors are the love of my life”
Or explains that one of the mistakes of Israeli investors who check every project in Israel a thousand times, is to spend sums of money and not ask questions when they invest abroad.
“Investors that you would give them a property in Israel would check it lengthwise and suddenly when it’s overseas they don’t ask anything and it’s a shame. In my opinion, what would have saved a lot of investors from losing their money is a healthy doubt. Simply asking all the questions they naturally ask in Israel. It’s not enough that a friend Yours bought and invested and earned and you just put the money without checking.”
How difficult is it to raise investors in such a period?
“My whole approach to marketing, sales and working with investors is the opposite of what is customary in the field. Investors in this field are known to be a headache and for me they are, how can I say – the love of my life. I think that every investor in this field can stop being a headache if you do the job of coordinating expectations, transparency from the beginning .
I don’t really think that investors are the problem in this field and recruitment is one of the easiest things for me, I have never spent a shekel on sponsored marketing. I think that those who have patience and really want to give value, then people will come to him naturally.
Another thing, I put everything on the table: delays in projects, delays. One of the problems in the field is that entrepreneurs are afraid to bring the truth thinking that investors will not be able to handle it, and sometimes this is an approach that complicates and creates a gap in trust. I simply present it as it is.
I don’t just throw out the bad news, but present the non-members as they are along with creative solutions I’ve already found, involve them at every stage in anything that deviates from the original plan, make a zoom with them so that they can see me, so that they can talk to me, not hiding behind emails, not going with Slogans, we now have an event that I wish it hadn’t happened, and it bothers me that it’s happening, but I’m worried about your money. And here are the solutions we have and this is what I thought, and what do you think. To convey things as they are and I think that’s why they continue to go with me.”
How does the war affect work overseas vis-à-vis Israeli and American investors?
“To begin with, in recent years I have had business relationships, let’s define it that way, not with anti-Semites. But beyond that, I have not received any unpleasant statement other than concern. Regarding the investors, we may not remember the period before the war, but specifically from the Israeli side, the outflow was during the reform period the legal
A lot of people wanted to take the money out, even though there was an increase in the dollar rate and the investment graph here definitely went up. From this experience and others, I tell all entrepreneurs and investors to leave the speculations of what will happen, don’t be fortune tellers, but focus on risk management and conservative choices.”
Conservative elections are the exact opposite of what is expected of you. Still, why is this the approach?
“In the last four years, I am proud to say that every business plan of mine has met reality. And it’s not because I’m an exceptional entrepreneur, but because, as mentioned, I lost 300,000 dollars in non-conservative business plans. Today I make the most conservative plans because I know that in real estate everything can go wrong and I Can’t be in a situation where I’m putting investors’ money at risk.
I think that the most correct thing to do as investors and entrepreneurs is to manage risks instead of conducting analyses. When I build a business plan and analyze a project it is irresponsible to build on future estimates. I can use them as a supplement to the business plan. They are talking about three interest rate cuts in 2024, do I know if they will happen? No.
I can say that it would be nice for it to happen, but the plan will be based on today’s prices and today’s interest rate. In Corona, when we had no idea where the market was going, I went for projects that I knew I could convert into profitable real estate, and if, say, there was some kind of stagnation, I would go back to basics.”
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