Aryeh Deverett standing in front of a newly renovated TAMA 38 project in Tel Aviv.

Despite legislation and incentives, the vast majority of structures in Israel have not undergone any fortification, leaving them vulnerable to earthquakes. Because Israel is situated on the Syrian/Jordanian fault line, a large part of the population is at risk.

By Rochelle Miller

TAMA 38 is a unique construction program from the Israeli government to increase urban housing and to protect older apartments from earthquakes. Developers are awarded the opportunity of adding new floors on the top of existing apartment buildings in exchange for doing improvements on the building. Included among these improvements are strengthening the existing building, elevator, new façade, balconies, and safe rooms.

The building on the right is original and the building on the left has been renovated by the TAMA 38 program. The newly renovated building is stronger and nicer, has an elevator and parking, and is worth at least 30 percent more than the original building.

For their work in improving the existing building, the developer receives the best new apartments — located on the top floors — in newly renovated buildings, in prime locations within premier choice neighborhoods. In the next 10 to 20 years, over 25,000 residential apartment buildings in Israel will be rebuilt to TAMA 38 standards, creating thousands of new homes. American Israel will finance the construction of approximately ten projects per year, through loans from private funders, who will also have the option to purchase new apartments at discounted prices.

“We anticipate an annual return on investment of 12–14 percent with minimal risk,” said Larry (Aryeh) Deverett, CEO of American Israel. “Investment time is 24–36 months on most projects that feature excellent security collateral. TAMA projects greatly benefit the State of Israel. They make Israel safer and stronger and create much needed housing. They generate jobs and stimulate economic development and tax revenue.

Currently, Israel’s population is 8.842 million, comprising 43 percent of world Jewry. The Central Bureau of Statistics indicates that 74.5 percent of the population is Jewish, and predicts that by 2048, Israel’s population will reach about 15 million. Accordingly, extensive new housing is required to accommodate the exponential growth.

The building on the right is original and the building on the left has been renovated by the TAMA 38 program. The newly renovated building is stronger and nicer, has an elevator and parking, and is worth at least 30 percent more than the original building.

American Israel is one of the largest early stage lenders to TAMA 38 projects in Israel. To date, they have loaned over 100 million shekels to 28 projects. Comprised of a team of Americans and Canadians living in Israel, they have extensive experience in finance and project management and American business practices and standards. With integrity and unsurpassed signature service as its hallmark, American Israel has earned an international base of clients. Led by Aryeh Deverett, CEO, and Jonathan Kestenbaum, president, the American Israel team includes highly experienced project managers, shamot (appraisers), architects, engineers, kablanim (construction companies), lawyers, accountants, and financial analysts.

“We specialize in acquiring profitable TAMA 38 projects that are close to construction,” said Aryeh. “These projects have strong collateral and excellent locations. We either develop these projects directly or co-develop with another group. We do extensive due diligence to ensure the developer and the project are safe and low risk. Additionally, our team monitors each project and is actively involved in financial management and sales.”

For the foreign investor living far from Israel, purchasing property from abroad can be fraught with anxiety. Understandably, prospective investors seek protection from being taken advantage of by unscrupulous developers. American Israel understands these concerns. Unfortunate incidents have occurred where foreign investors have fallen prey to unscrupulous developers. Generally, such challenging experiences transpire in Israel due to a delay in permits/administration or to the machinations of an unethical developer. Additionally, these investment nightmares usually involve new developments.

Such is not the case with TAMA 38. There is no purchase or development of land and no “new” development plans. Because TAMA development increases safety, beauty, and economic development of their regions at no cost to them, municipalities view it as a boon and are highly in favor of it. Should TAMA regulations change, they are generally to the benefit of the developer.

TAMA projects are relatively easy to build. Once the engineering specs are in place in TAMA renovation projects, the builder can quickly (within six months) do the foundation/earthquake strengthening work and then begin the new apartment construction. Typically, a TAMA renovation takes approximately 18 months of construction. However it can take several months to acquire a building permit in Israel, but this is accounted for in the planning process.

If a builder is not meeting expectations, the developer can quickly replace them with another builder. Many builders in Israel are vying for this type of contract.

“We conduct significant due diligence on our developers to ensure we are dealing with quality contractors. American Israel’s main role is to protect its investors with good, reputable companies and projects,” Aryeh says. “And then we tie up the deals as tight as possible from a legal perspective. American Israel’s main role is to protect our lenders’ interests. We earn our profit only after our lenders are paid.”

Because developers can afford to pay very high interest rates for early stage funding, they tend to engage in multiple projects, thereby leveraging their profitability. This is an excellent time to invest in TAMA projects, before large institutions start to “get in the game” and bring down the yield to private lenders.

I asked Aryeh how investing in a TAMA 38 Project is preferable to purchasing an apartment in Israel.

“When you buy an investment property (apartment) in Israel, your rental income will be offset by the property taxes, maintenance, financial costs, management fees, and other expenses,” he explained. “At best, you can earn about 2 percent per year. You should also be prepared to receive a call informing you that the A/C unit needs to be replaced or there is a major leak in a pipe…the expensive irritation calls that no owner likes to get! Owning is a tremendous hassle, involving a great deal of responsibility. Perhaps your apartment may appreciate 5 percent per year; however, should you decide to sell, you will pay capital gains tax. In contrast, with a TAMA loan, you earn 13 percent per year. There is no hassle, no worries, and much less to pay in taxes at the end. And in the process, you are helping Israelis live in safer and nicer homes. Simply stated, TAMA is a smarter investment option. Moreover, should you so desire, you can purchase one of the apartments at a discounted price. It’s a win-win situation!

For further information regarding TAMA 38 and American Israel, please refer to their ad in this issue of the 5TJT or visit

Rochelle Maruch Miller is a contributing editor for the Five Towns Jewish Times. She is a journalist, creative media consultant, lecturer, and educator, and writes for magazines, newspapers, websites, and private clients. She welcomes your comments at


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