The Problem: Israeli Banks Do Not Finance Foreign Properties
The Regulatory Barrier
Israeli banks cannot provide mortgages on properties located outside Israel. This is due to:
- • Bank of Israel regulations: Limit financing to Israeli properties only
- • Enforcement issues: Difficult for banks to foreclose on property in Georgia or Hungary
- • Currency risk: Property in GEL/HUF, loan in ILS - risky for the bank
The Result for Investors
If you want to buy an apartment for €100,000 in Budapest - you need €100,000 in cash. No financing. No leverage. This causes most Israeli investors to give up.
The Solution: "Money from the Walls"
The Simple Yet Brilliant Idea
If you cannot get a mortgage on the foreign property, get a mortgage on your Israeli property - and use the funds to buy abroad!
The Winning Strategy (3 Steps)
Extract Equity
Take a loan on your Israeli home (up to 70% LTV, 4-5% interest)
Buy with Cash
Purchase abroad in cash → receive 10-15% Cash Discount
Repay Gradually
Repay the mortgage from rental income + appreciation
Practical Example: Buying in Budapest
That is enough to buy 2+ apartments in Budapest! (€70-80K each)
Monthly Payment
Mortgage of $165,000 at 4.5% for 25 years:
~$910/month
(The Budapest apartments together generate €1,200/month = $1,300!)
The Bonus: Cash Discount
Buying with cash abroad = massive negotiating power! Most buyers need local financing, which is hard to get. You arrive with cash - you are the king.
In Georgia
- • Standard cash discount: 10-12%
- • Example: $100K property → $88K in cash
- • Immediate savings: $12,000!
In Budapest
- • Standard cash discount: 8-10%
- • Example: €180K property → €165K in cash
- • Immediate savings: €15,000!
The Bottom Line:
Not only did you get "mortgage financing" (through your Israeli home), but you also saved 10-15% on the price. This means the difference between "buying with financing" vs. "this model" is 20-25% in profitability!
The Complete RealFix Package: Not Just Financing, Smart Investing
We do not just get you cheap Israeli financing. Our international investment team guides you through the purchase itself in Georgia/Budapest to ensure your money is invested wisely, not in a "pig in a poke."
Why is this critical? Because if you go alone, you will pay 10-15% more on the property, sign a problematic contract, and get a bad management company that steals 30% of the income. We prevent that.
Risks You Should Know (And Protections)
Risk #1: Currency Risk (Exchange Rate)
The problem: The loan is in ILS, the property is in EUR/GEL/USD. If the ILS strengthens - you lose.
The protection: RealFix can build "currency hedging" for you (e.g., 50% dollar-linked loan). It costs a bit more, but eliminates risk.
Risk #2: "Pig in a Poke" Abroad
The problem: Buying a property remotely without proper due diligence, then discovering problems (lawsuits, draconian management contracts, bad area).
The protection: Our on-ground team does full Due Diligence (physical visit, title check, neighbor check). We do not let you buy "junk."
Risk #3: Fund Transfer Issues
The problem: Transferring €100,000 abroad requires tax authority approval + reporting + forms.
The protection: Our accountants handle all reporting and ensure the transfer is legal and secure.
Real Case Study: The Cohen Family from Herzliya
Financial Situation
- • Israeli property: Apartment worth $770,000, mortgage $275,000
- • Goal: Buy investment apartment in Georgia
- • Available cash: $0 (all money tied up)
The Solution We Built
- 1. Extracted $110,000 from Israeli home (mortgage @ 4.3%, 25 years)
- 2. Bought apartment in Batumi for $95,000 (instead of $107K - 11% cash discount)
- 3. Our management company generated $900/month rental income
- 4. Israeli mortgage payment: $610/month
- 5. Net income: $900 - $610 = $290/month profit!
Result After Two Years
- • Accumulated income: $290 × 24 months = $6,960
- • Property appreciation: $95K → $115K (+21%) = +$20,000
- • Total profit: $26,960 on $0 investment!
Israel Residents Only
This financing strategy requires property ownership in Israel. Israeli tax residents must report foreign real estate holdings and rental income. Have family in Israel who own property and might be interested in international investment? Share this guide with them.
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Legal Disclaimer
The information and simulations presented on this website are for illustrative purposes only and do not constitute a binding offer for credit or financial advice. Credit Approval: Subject to final underwriting, clean credit data (positive credit score), clean banking history, and meeting the threshold requirements of the financing institutions. Interest Rates: The interest rates displayed are estimates only, based on average market data, and may change at any time according to the client's individual risk profile and economic conditions (Bank of Israel interest rate changes / CPI). No Commitment: RealFix does not guarantee loan approval or the terms displayed in the calculator. E&OE.
