Buyer’s Price Program – project financing in the State of Israel’s flagship program
WG – Buyer’s Price is a real estate development company engaged in the Buyer’s Price Program while specializing in project financing through limited partnerships in which it serves as a general and managing partner, and each partnership invests in the process of the Buyer’s Price Program in Israel.
WG – Buyer’s Price specializes in locating and financing projects within the format of the Buyer’s Price Program. It starts from the stage of posting the guarantees for tender participation, equity financing for purchasing the land, and building.
WG – Buyer’s Price finances projects through limited partnerships, in which it serves as the general and managing partner, while each partnership invests in various projects of the Buyer’s Price Program.
The investors’ funds are deposited in the trust accounts of the limited partnerships in which only the trustee is the sole authorized signatory. As befits the professional process of the Buyer’s Price Program.
About the Program – Buyer’s Price Program
Goals of the Program
- Increasing the country’s housing supply.
- Assisting young couples without housing purchase their first apartment with preferential conditions.
Stages of the Buyer’s Price Program
- Marketing residential units to developers through the Israel Land Authority and the Ministry of Construction and Housing.
- Approving apartment areas and prices by the Ministry of Construction and Housing.
- Publishing registration dates for the project by the construction companies.
- Conducting a computerized lottery at the Ministry of Construction and Housing and sending the result of the lottery to all participants.
- Sending notices to the winning applicants and inviting them to choose an apartment and sign the contract.
Important to Know – Buyer’s Price Program
- The State markets land at a reduced price in exchange for guaranteeing a low price in marketing the apartments to be built on the land – the competition is over the lowest price per m2 for which the developer sells the apartments.
- The price of the apartment is set by the winner’s price multiplied by the m2 area of the apartment.
- The specifications of the apartments are according to the standard specifications of the Ministry of Construction and Housing.
- Marketing of the apartments is done in advance by the state and at one time immediately upon reaching a decision by the committee for approving building permits.
Advantages of the Investment
WG CAPITAL has unique protection mechanisms, thanks to which the investors benefit from limited exposure to risk, full transparency and relative security that is given today in the alternative investment world.
- The investor as a limited partner – Wealthstone Rain Capital manages investments through an association of investors under a limited partnership that is registered with the Registrar of Partnerships for predefined period, while Wealthstone Rain Capital serves as the general-managing partner.
- Trust – The funds of the investors are transferred to a bank account owned by the partnership in which the trusts company serves as the trustee and sole authorized signatory for the bank account. Additionally, to the extent required, the trustee has the discretion to initiate any legal proceeding against the developer pursuant applicable law.
- Portfolio Diversification – Exposure of the portfolio to investments in non-negotiable assets and reduction of standard deviation in the overall asset portfolio.
- Investment Diversification – Each partnership invests in 1-3 projects, with various risk levels as required – according to the cost of the projects and the capital required for financing them.
- Priority of Returns and Interest Tax – Priority and preference of the investment’s repayment to the investor and always before distribution of profits to the developer and managing partner and repayment by the permit partnership of the Additionally, management and operating fees are charged to the developer so that the priority return reflects the expected return of the investor. In addition, the investor’s profits are subject to interest tax only pursuant to an expert opinion from PwC (Kesselman & Kesselman).
Full Transparency – A report will be sent to each investor, including the status of the financial investment, as well as the progress of projects relevant to each partnership