After years of investments and initiatives in the real estate market, the Momentum Group announced its first equity fund launch. The real estate investment fund will be open to a maximum of 50 investors with a minimum amount of USD 300 thousand each. It will operate mainly in the residential domain in Israel.
The Momentum Group was established 7 years ago by the founders, entrepreneur and businessman Nadav Gover and his partner Elad Wieder, who, in addition to his experience in the real estate market, is also a childhood friend from Kfar-Saba. Together, they have been able to find high-yield-potential opportunities and, to date, have invested more than NIS 100 million in 20 projects in Israel and abroad.
By opening up this opportunity, the general public can enjoy the added value, knowledge and professionalism the Momentum Group has accumulated in this field and become a part of their success. In the coming year, the fund will raise the money from investors, and after the initial raising phase, it will begin identifying business opportunities that match its strategy - in the transactions of residential real estate, companies or properties that have a high potential for improvement , or are facing difficulties.
Enter the real estate market without purchasing a property
According to Gover and Wieder, the duration of investment in the fund is expected to be Five years, with an option to extend to Seven years (a shorter period than usual). Israeli banks will accompany and finance the fund's transactions , 'leveraging' its purchasing power, and minimizing risk to investors.
"There is much interest in the fund from my business associates overseas, as well as those from unrelated business sectors," Gover says. "Investors from abroad see what is happening in the Israeli market and are looking for ways to enter it without purchasing assets, and this fund meets their exact requirements. currently, we are, of course, also open to investments from Israeli investors."
"Joining the fund has benefits that are unavailable upon purchasing a single property."
Gover adds that "The residential real estate market has been on the rise for many years, and according to all forecasts this situation is going to continue well into the foreseeable future. Therefore, this is exactly the time to invest even more in residential real estate. Demand is not going to stop and our strength is in locating the transactions with the highest possible profit potential in a relatively short time and realizing them in the best possible way."
Why join the fund and not directly buy a property?
"The advantage of joining the fund over a direct purchase is the ability to enjoy profits within a few years, without being preoccupied with betterment or rentals. In addition, when dozens of investors merge and cooperate, the investments can be spread over several projects, what help hence reducing risks. Furthermore, fund investors will invest in large complexes with more significant revenue potential than if they were to purchase one apartment in the peripheral areas of Israel.
"Those wishing to invest USD 300 thousand in real estate cannot purchase a quality property in high-demand areas in Israel," adds Gover. "By joining the fund they become a part of a huge investment allowing us to purchase entire buildings, improve and sell them at a significant profit, rather than doing it one apartment at a time."
One is already underway: a NIS 70 million building on Tel Aviv’s Rothschild Street.
“Beyond essential cosmetic renovation, it has not been maintained or significantly improved since it was built in 1936.” says Gover. “We will work in collaboration with the local planning and construction committee and the conservation department of the Tel Aviv Municipality to improve planning and increase building rights, as well as to promote the licensing process and issue a building permit. Our partners will not have to worry about any of these, as we will take care of everything. In accordance with the fund's strategy - at this stage the investment will be realized. We anticipate with confident that this project will yield a significant return and significant profit for the fund and its partners" says Gover.
"Within a few years, the investor will be able to get an ROI, that in our estimation will be higher than the yield of the current real estate market, which is about 4% per year for an apartment in the periphery, without taking into account all the expenses involved in owning and renting a property," explains Gover.
68% return on investment within two years
Gover speaks from extensive experience. His first significant deal with Wieder ended at a profit of 68% within two years (34% annual return). "We located a dilapidated residential building in Haifa situated in a problematic area, so all potential investors moved away from it. We identified a diamond in the rough and decided to go for it. Our understanding of the market and our connections with planning committees, while looking to the future - brought us to the understanding that this was an opportunity." he recalls with a smile.
"6 months later, the municipality announced its development program for the area, which exactly matched our own plans. We renovated it completely and took advantage of all unactualized rights - so we built two extra units on the roof of the building."
"24 months later, we realized the deal at a profit of 68%, and all the investors who bought apartments from us continue to enjoy a growing demand by students and a young population for apartments and an annual return of 6% - which is high compared to the local real estate market."
"We are responsible for the partnership from the funding stage to realization."
Since then, the Momentum Group has gained momentum and is also initiating residential projects in high-demand areas in the Sharon and the center of Israel. In addition, they recently entered the world of urban renewal. Beyond the real estate business, Gover is a senior partner in several high-tech ventures in the Cloud field and established a virtual currency exchange. "I am an entrepreneur at heart and am always looking for ways to maximize the potential of every deal I touch."
"To date, we have managed to deliver significant value, but it was not available to the general public. Through the fund, we are convinced that we can maximize our capabilities also for investors who will join us as partners. It is a partnership for which we are responsible from the funding stage to realization," Gover emphasizes. "Our goal is to continue doing what we are good at - finding opportunities, betterment and optimal utilization, realization and enjoying the profits. Now even those with USD 300 thousand or more to invest, have the opportunity to join us in this process."