Nowadays it is not uncommon for real estate investors to hold both a domestic and an overseas real estate portfolio. I meet clients all the time who own real estate assets both in Israel and in New York. Often these clients are at a loss as to how to mortgage or collateralize their Israel real estate assets from abroad. Often a NY potential borrower knows a NY potential lender willing to extend them a real estate collateralized loan. Both parties would be willing to pledge/accept as collateral the overseas real estate asset owned or controlled by the borrower but have know idea how to go about it. This lack of know-how often unnecessarily prevents the potential loan from happening.
Additionally overseas real estate investors often do not know how to tap into the borrowing market of their overseas property and do not utilize the available leverage to them secured by their overseas real estate asset to help them build additional wealth. Yes there are banks and mortgage brokers in Israel who are happy to arrange a mortgage loan against your Israeli real estate. Israeli bankers are a bit more conservative than bankers in the US when it comes to leveraging residential properties that are not the sole real estate asset of the borrower (and there are several minor lending nuances that are different in the comparable jurisdictions) however the mortgage banking system in Israel is quite streamlined and efficient.
The real estate world in westernized countries such as Israel is very similar from a legal perspective as that of the United States. Both jurisdictions allow you to record mortgages and liens against real property in order to secure financing against your real estate. In Israel since title insurance is not a common thing, the mortgage lien or cautionary note lien would be first recorded prior to the lender releasing funds to the borrower. Cautionary note liens can be filed online by attorneys in Israel and the system is quite efficient and secure. Once the lien is recorded, the Israel land registry will not allow additional liens to be filed against the property that would be contradictory to the initial lien filed. Foreclosing on real estate collateral in Israel is quite similar as NY with the time frame being a little faster in Israel than in NY. Also, with the advent of easily available overseas communication and travel the only thing that needs to be taken into consideration are time zone differentials.
Real estate investors should not allow the language barrier, culture or the unknown of a foreign country stop them from tapping into valuable collateral leverage available to them from their overseas real estate investment. They merely need to engage the right real estate attorney who understands their needs and how the systems of both jurisdictions work.
The global real estate world is much smaller and more similar than you think.
Gershon Kayman Attorney At Law
Admitted both to the NY and Israel Bars