Young Investor Buys Four Properties in Six Years Using Leverage
Translated & summarized from Globes by baba
Matan Ahavia, a 34-year-old investor, acquired four properties in six years, starting with index funds and moving to real estate. He purchased apartments in Dimona, Ukraine, and two in Eilat, utilizing significant leverage and loans. Ahavia's strategy focuses on using borrowed capital, with rental income covering loan payments, allowing him to build assets without substantial personal equity. He is now considering international investments and notes a decrease in active real estate investors in Israel.
The story in 7 lines · by baba
- Matan Ahavia acquired four properties in six years, starting with index funds and moving to real estate.
- He purchased apartments in Dimona, Ukraine, and two in Eilat, utilizing significant leverage.
- Ahavia's strategy involves using loans, with rental income covering mortgage payments.
- His first property was bought in Dimona for NIS 400,000 and sold for NIS 520,000.
- He bought a Ukrainian apartment for $50,000 using a loan, rented to a displaced family.
- Ahavia is now considering investments in the United States.
- He noted a decline in active real estate investors in Israel to about 15%.
Matan Ahavia, a 34-year-old real estate investor from Eilat, has acquired four properties within a six-year span, detailing his journey from stock market investing to strategic real estate acquisitions. Ahavia began his investment journey at age 28, initially investing in index funds like the S&P 500. However, he found the returns on his relatively small capital insufficient and sought more creative methods to grow his wealth.
His first real estate venture was a three-room apartment in Dimona, purchased in 2020 for NIS 400,000, significantly below market value. He renovated it minimally and planned a quick resale. Due to a sharp rise in the real estate market, he sold the apartment after 18 months for approximately NIS 520,000, realizing a profit that far exceeded his stock market gains. This success solidified his belief in real estate as a wealth-building tool.
Ahavia then expanded his portfolio internationally, purchasing a three-room apartment in Dnipro, Ukraine, in 2022 for $50,000, using a full loan secured in Israel. The apartment is rented to a displaced family, with the rental income covering the loan payments. This acquisition marked his first property purchased without personal equity, demonstrating his strategy of leveraging other people's capital.
He subsequently purchased two more apartments in Eilat. The first, a three-room unit in the Ofir neighborhood, was bought for NIS 920,000, with a shift in strategy towards long-term rental income rather than quick profit. It is currently rented for NIS 3,800 per month. His fourth property, also a three-room apartment in Eilat on Shetach Hayam street, was acquired for NIS 1 million, again utilizing maximum leverage. This apartment is rented for NIS 4,200 per month, covering its loan obligations.
Ahavia, who is engaged and lives in Eilat, drives a 2011 Hyundai, emphasizing that his financial moves are not solely for immediate cash flow but for long-term asset accumulation. He is now considering investing in the United States. He also shared insights on the Israeli real estate market, noting a decline in investor participation to around 15% of the market, with many current rental properties coming from inheritances rather than new investor purchases.