For people across the globe, this hasn't been the easiest year. The havoc wrought by the coronavirus has altered the world beyond recognition. Faced with these new conditions, no one can predict how things are going to unfold in the coming years. Yet in spite of the uncertainty, there are those who see the silver lining in the crisis, and are discovering investment opportunities that will help them develop, grow, and emerge stronger than before.
Those who know a thing or two about business and investment have been reminded during the pandemic of what happened after the great economic crisis of 2008. Despite the differences between the two situations and their respective challenges, much can be learned from 2008 about how to respond to today's crisis.
Guy Ovadia and Sherri Simhayoff are real estate agents in the State of Nevada, USA. They work together at Wardley Real Estate and have extensive experience with private and commercial properties, as well as with real estate investment and development. Ovadia and Simhayoff spoke to us about what has happened in their region since the dramatic events of 2008:
"An investor's paradise"
"After that crisis, families like mine, headed by educated professionals, started moving to Las Vegas and its satellite cities in Nevada," says Guy, who has been living in the United States since the 1980s. "The reason is that the prices here were lower, land was cheaper, and there was room to develop big and ambitious real estate projects. At the time, everything was cheaper here, and the cost of living was low. So if you were a professional earning a good salary despite the crisis, you could definitely take advantage of that opportunity."
Sherri adds: "Nevada is unquestionably less expensive than the surrounding states. It pays to live here, more than in Utah, Arizona, and obviously California. It's true that it's a tourist destination that attracts people from all over the world in normal times, but in terms of residential and investment properties it's still considered a better deal."
As far as taxes are concerned, Guy and Sherri note, Nevada is an investor's paradise. "There's no state tax here, there's just the same federal tax that applies all over the United States. That's what makes the projects here more profitable and lets investors get much more for their money," Guy says. "That's why there's been a construction boom going on here for years now."
Still, it's a law of physics that what goes up, must come down. When asked whether Nevada's construction and development boom of the last few years will be reaching its end anytime soon, Guy answers: "We don't have a crystal ball, and no one can really say what's going to be. But what I do see actually happening is that the demand for real estate in the city is still very high, and there isn't enough supply to meet it. So basic logic tells us that in the coming years the region will, apparently, still be excellent for investment and development."
Sherri mentions additional upsides to investing at this particular moment: "Today, the mortgage rates people are getting are very low. That, combined with what Guy said, creates the perfect storm that constantly pushes property prices up."
Defusing the fear of overseas investment
For many years now, Sherri and Guy have been advising investors from across the globe who want to enter the dynamic and exciting world of Las Vegas and Nevada investment. The two see growing demand for investment not just in Las Vegas, but also in the region's less-known cities, such as Henderson and Reno. While Vegas, of course, draws tourists and gamblers, these other cities are regarded as attractive investment channels thanks to the industrial and commercial development that have characterized them in recent years.
Some, though not all, of the investors whom Sherri and Guy advise are Israeli. Their Israeli clients include both longtime US residents and people who still reside in Israel. Investing in real estate on the other side of the world can be a momentous step for some, but those who take that step realize that fear, however well-founded or logical, shouldn't cause one to forego unique opportunities.
"Our clients entrust us with their life's savings and rely on us to get a good return on those savings," Guy says. "It's a huge responsibility – and only those who understand how great the responsibility is can truly serve their clients' interests. Because it's such a significant investment, there clearly will be some fear attached. Anyone who doesn't feel fear is probably doing something wrong. We understand these fears and do our best to help our clients overcome them."
In this context, Guy is careful to stress that he and Sherri "don't sell houses. Houses here don't need anyone to sell them; they sell themselves. Essentially we serve as our clients' advisors – just like lawyers and accountants. We also get our clients out of bad deals, and we do whatever we can to help them in negotiations, and to improve the terms of the transaction. In this field you have to be responsible enough to tell the client if you don't care for the deal – even if means losing out on your fee."
Sherri adds that, in contrast to common Israeli practice, American Realtors usually represent only one party to a transaction. "It almost never happens that we represent both sides. The reason is that it can create a conflict of interest. I'm supposed to make every effort to serve the interests of my client. If there are two sides with conflicting interests – that may hurts my ability to negotiate properly."
A comprehensive consulting service: from the first phone call until the keys are handed over
Guy has been a real estate agent since 2014; over the years he's served a great many clients. He also has many years' experience guiding real estate projects. Sherri, for her part, has been a full-time realtor for 16 years. She comes from Jerusalem's well-known Simhayoff family, but she's also an American citizen who immigrated to Israel in the 1970s and returned to the US in 2003. She started working in real estate in 2005, and has gone through all the industry's ups and downs, including, of course, the 2008 economic crisis. She's long been considered one of her agency's top ten realtors.
Guy and Sherri both work independently, under the same brokerage and consult with each other, exchange ideas, and help each other. Their differing backgrounds enable them to offer the company's clients a wider range of solutions. Having lived in Israel and in the US, they understand the mentalities and cultures of both countries, and can be very helpful to Israelis who've moved overseas.
The services they provide include the sale and acquisition of properties of many different kinds: traditional homes, custom-designed houses, luxury properties, investment properties, new projects, and commercial real estate for rent or purchase. The firm they work for, Wardley, collaborates with property management companies and relocation services in all 50 US states, as well as in 50 other countries around the world.
Sherri points out that she strives to build close and effective relationships with her clients – relationships that can last for many years after a contract is signed: "I provide a full range of services to my clients and take care to manage all aspects of the process. That includes handling the paperwork, researching the most suitable properties, and referring clients to additional professionals and consultants."
By contrast, Guy is the businessman who knows how to vet the data and glean useful insights from them. "The commercial real estate world is totally different from the private world. When people buy a home for themselves, they're concerned about how it'll look, what kind of view it has, the colors, the garden, etc. When people invest, they want to identify development potential, to know what the rents are in the area, the returns, and so forth. So I check everything out for my clients and present them with all the data they need to make an informed decision."
For Israelis who want to invest in Nevada without living there, they promise to do whatever they can to make a potentially rocky experience as pleasant and safe as possible. "We have all the tools necessary to make the process easier for our clients," Sherri notes. "We can refer them to excellent attorneys and accountants for consultation, and assist with property management via a reliable and reputable company that we've been working with for a long time."
This is in addition to handling the paperwork and subjecting all of the important aspects of the transaction to professional and meticulous scrutiny. "Our firm basically provides one-stop shopping. From the time clients call us until the moment we hand them the keys – we're with them, helping them with whatever's necessary at every stage of the process," Guy concludes.