Jul 17, 2019
Today I interviewed Eliav and Revital Kling, who live in Toronto, ON. They have a diverse skillset with Revital having over 20 years experience in the Financial world and Eliav has over 20 years of experience in the IT world.
Dealing with multi million dollars budgets and managing teams around the world, Revital brings the KERRA team creative financial view that can turn a good deal to a great one. Eliav started programming and testing and shifted to project management in an international company. Eliav is managing people around the world to deliver multi million dollars complex projects with the highest level of efficiency and quality in the telecom industry. Eliav brings his management skills to maximize the cooperation between our teams to increase the efficiency and profitability of our properties.
Revital & Eliav started to invest in Real Estate back in 2004 when they have acquired their first investment property which they have sold several years later for a high profit.
In 2009 after the economic turmoil in the US, the KERRA team identified the opportunity in the US Real Estate market and started to look for investment properties in the US. They bought their first US property in 2009 followed by several acquisitions in Florida. All properties were either short sales or foreclosures. After stabilizing those properties, they refinanced the properties and pulled the invested funds and got ready for the next phase of their investments – Multi Families. Since then they proudly own and manage 160 doors.
Eliav and Kling works on a unique business model. Let's say for an example, if the initial investment is for $1M, where 75% of the investment comes from financing and 25% through Joint Venture partners, they need to raise $250,000 (25% of $1M), and each investor has to come up with minimum $50,000. Then, let's say there are 5 investors with $50,000 each will make 20% partners in the deal. As being, managing partners, Eliav & Kling work on day to day activities on the property and they charge an asset management fee based on the gross revenue of the property which is between 3-5% of the gross revenue. Also, they will be a guarantor of the mortgage. The work and time involved during closing of the deal, Kerra Investments collect acquisition fees which is roughly around 1% of the purchase price.
During the sale of the property, they charge a disposition fee which is around 1% of the sale price. Then they have a profit sharing fee which is divided in to 3 tiers. For the first year, if Kerra Investments have been able to provide 0-3% of the Return on Investments to the investors, then 95% of the profit goes to investors and 5% to Eliav & Revital. In the 2nd year, if they have been able to provide 3-5% Return on Investments then 80% of the profit will go to Investors and 20% will go to Eliav & Revital. After the 3rd year, when the Return on Investments is 5% or more, then Investors and Eliav & Revital will split the profit in half. Profit sharing fee is based on the sale of the property as compared to the actual purchase price.
So as an asset manager, Eliav & Revital will always work on to maximize the performance of the property to generate more income.
Watch the interview here to find out how Eliav and Revital have learned structuring the deals successfully while learning from my coaching program as well as other Mentors.
To find out more about Kerra Investments, visit kerra-investments.com
If you want to learn how to invest in Real Estate with OPM, join my program 90 Days to $5K.