No Upfront Equity: New Move for Real Estate Investors in Romania

Bucharest, Romania / GettyImages, Laszlo Szirtesi

The requirement for a high amount of equity at the start of a deal is considered one of the main barriers for Israelis who want to invest in real estate abroad. Now, Hagag Europe is trying to offer an alternative through a new financing route for purchasing apartments in its projects in Romania, including the possibility of entering deals without putting up the full equity amount in advance.

As part of the move, the company is launching Hagag Europe Partners, a closed investors' club that will centralize its activity with Israeli investors. The club will provide access to projects in Romania, along with a dedicated financing route for the first payment in the deal, which is usually about 30% of the apartment price, through Mizrahi Tefahot Bank. According to the company, the interest payments on the financing will be subsidized by it until the handover date, subject to the terms of the plan.

Shirit Cohen, chief marketing officer of Hagag Europe / Hagag Group

The club will operate as a closed model and will include only pre-approved investors. Among other benefits, members will receive early access to projects, priority in selecting apartments, guidance throughout the purchase process, and property management services after handover.

According to Shirit Cohen, chief marketing officer of Hagag Europe, the move is intended to address the difficulty investors face in entering real estate deals abroad because of equity requirements and the need for professional guidance. She said the plan is subject to eligibility checks and bank approval.