Mizrahi Tefahot Seeks Asset Sale to Recover 5 Million Shekel Loan from Struggling Rafael Family Airbnb Empire
The Rafael family's Airbnb rental business is facing significant financial difficulties, prompting Mizrahi Tefahot Bank to file a request last Wednesday at the Lod District Court to enforce liens and appoint a receiver. The bank claims that Rafael Real Estate and Investment Consulting, led by Yuval Rafael, owes approximately 5 million shekels and has defaulted on loan repayments. Mizrahi Tefahot is seeking to liquidate three real estate properties pledged as collateral, including one owned by the company and two owned by Rafael's family members.
At its peak, Rafael Real Estate managed 250 short-term rental apartments nationwide, making it one of Israel's largest companies in this sector. Founded in 2018, the group owned eight apartments directly and operated the rest through partnerships with investors. The company employed 20 staff and maintained specialized departments for marketing, sales, customer service, operations, accounting, interior design, and yield control.
The bulk of the debt, about 4.69 million shekels, is attributed to Rafael Real Estate and Investment Consulting alone, with the remainder linked to holding companies and personal debt of Yuval Rafael, the founder and former CEO. Cross-guarantees were registered among the group companies, and the pledged properties are located in Eilat, including luxury assets held by a related company, Romi Real Estate, which owns 70% of luxury properties in Eilat's Shachmon neighborhood.
The financial crisis began in October 2023 following the outbreak of conflict, which severely disrupted tourism activity for weeks. Although the company later partnered with the Ministry of Tourism to house evacuees from the Gaza envelope, disputes over apartment classification led to lower-than-expected payments. This revenue shortfall caused heavy losses, financial deterioration, and ultimately halted business operations.
Mizrahi Tefahot noted that after loan payments stopped, negotiations led to an agreement to sell the assets. The bank allowed the company to independently sell one property, generating 3.6 million shekels, of which 3.1 million was used to reduce the debt. A source close to Yuval Rafael attributed the company's downfall to ongoing management challenges, rapid expansion, and unfavorable economic conditions over the past three years.
The bank is requesting the court to enforce the liens, appoint attorney Israel Bachar as permanent receiver, and authorize him to take control and sell the three properties to repay the debt. The request was submitted with the consent of the companies, the controlling shareholder, and family members who pledged their properties. Mizrahi Tefahot clarified that the sale will target business-related apartments, not family residences. Yuval Rafael was unavailable for comment.
