Gilad Mai: Sales Quality, Related-Party Purchases, And Who Funds The 20/80
The main article argued that Gilad Mai's pipeline expanded faster than its financial strength. This follow-up shows that the sales book itself was less clean than it looked: in Netivot, 69 apartments were sold on 80/20 and 85/15 terms with an indexation waiver; in Netanya, most deals were sold on 20/80 and the sales book also included six related-party purchases; yet the financing component measured across all signed contracts was still only about NIS 1.4 million.
Sales Quality Starts Well Before Revenue Recognition
The main article argued that Gilad Mai's pipeline expanded faster than its financial strength. This follow-up isolates one narrower question beneath that headline: how much of the 2025 sales book reflects clean demand, and how much reflects payment terms that bring the signature forward while pushing the cash out.
Not every 20/80 sale is a problem. In Modiin, one apartment was sold with a contractor loan and another 11 deals were sold on 20/80 terms, but the project is close to delivery and does not carry a blanket indexation waiver, so the company itself says the effect is not material. The real pressure point sits in the two places where the gap between sale and cash is wider: Netanya and Netivot.
In Netanya, most transactions were sold on 20/80 terms, without an indexation waiver and with an option to accelerate payments. Even so, through the end of 2025 the project had still recognized no revenue at all, and in the sales-terms discussion the company also said it had not yet started recognizing profit because the building permit had not yet been received. In Netivot the picture is sharper: 69 apartments were sold on 80/20 and 85/15 terms, together with an indexation waiver. By the end of 2025 the project had only 79 signed apartments in total, so most of the sales book there already rested on relatively soft commercial terms.
The key gap is that accounting is still barely feeling the price. The company says that at this stage, with execution below 20% in Netivot and before meaningful recognition in Netanya, the total financing component across all signed contracts was still not material and stood at only about NIS 1.4 million. That is not proof that the terms were free. It is proof that the economic cost shows up later than the moment when the company already chose to sell that way.
That chart captures the contrast. Netivot showed real signing momentum in 2025, but under deeper deferral terms. Netanya, by contrast, barely sold during the year itself, yet its broader sales book was still built largely on 20/80. So the real issue here is not only whether apartments were sold. It is what the collection profile looks like, what happened to indexation, and when the cash actually arrives.
Where The Terms Are Doing The Heavy Lifting
| Project | Relevant volume | Sales terms | Indexation | Accounting position at end-2025 | What it means |
|---|---|---|---|---|---|
| Modiin | One contractor-loan sale and 11 deals on 20/80 | 20/80 and one contractor loan | No blanket waiver | Project close to delivery, company says no material effect | This is a relatively short cash deferral, not the main pressure point |
| Netanya | Most transactions, 91 cumulative signed apartments, only 8 new deals in 2025 | 20/80 with prepayment option | No waiver | No recognized project revenue through end-2025, and no profit recognition before permit | The book exists, but it still has not translated into full cash or reported profit |
| Netivot | 69 apartments on 80/20 and 85/15, against 79 cumulative signed units at year-end | 80/20 and 85/15 | Indexation waiver granted | Project still at low execution stage, below 20%, with financing income only later | This is the clearest case where sales pace also relied on an economic concession |
The table shows why it is a mistake to lump all the sales together. Modiin is mostly a short collection delay inside a mature project. Netanya is a sales book that exists on paper but has not yet passed the accounting recognition test. Netivot is different again: almost the entire signed book through end-2025 relied on a mix of deeper payment deferral and waived indexation.
That is the heart of this continuation. Growth achieved through concession is not the same as normal growth. When the company sells apartments on 80/20 and 85/15 terms while also waiving indexation, it is not only building backlog. It is also accepting an interim period in which the buyer has paid relatively little, the index does not fully compensate, and the company has to fund the path to delivery.
Netanya's Sales Book Also Includes Inside Demand
To understand demand quality in Netanya, it is also necessary to stop at the related-party disclosure. In August 2023 the company approved six apartment purchases in the Netanya project by related parties and close family members, with total consideration of NIS 42.769 million including VAT.
| Related-party buyer | Units | Consideration incl. VAT (NIS millions) |
|---|---|---|
| Yoel Yifrah, controlling shareholder and chief business officer | 1 | 14.043 |
| Gilad Yifrah, company CEO | 1 | 10.310 |
| Itzik Turgeman, chairman | 1 | 5.270 |
| Daughters of the controlling shareholder | 2 | 7.816 |
| Father of the CEO's partner | 1 | 5.330 |
| Total | 6 | 42.769 |
The point is not to claim that the transactions were invalid. The point is that Netanya's sales book was not made up entirely of anonymous outside demand. By the end of 2025 the project had 91 cumulative signed apartments. Out of that total, six apartments came from transactions with related parties and close associates that were explicitly disclosed. In a project that signed only eight new transactions during 2025, that is not an incidental detail when testing demand quality.
There is also a timing angle here. Those related-party purchases were approved relatively early in the sales-book build, well before the project moved into full execution. So they are not just another line in a note. They are part of the explanation for why the sales book looked firmer before the project had produced recognized revenue or passed a broader market test across a large remaining inventory.
Who Is Really Funding The 20/80
The company explains that its development projects are financed with equity and bank or institutional lending under a closed-project structure, with separate accounts into which all buyer proceeds are paid and from which cash is released according to milestones. That is the starting point for understanding 20/80. If the buyer pays 20% now and 80% only near delivery, the gap does not disappear. It moves to the lending layer, the equity layer, and the suppliers.
That is the 2025 story in one bridge. Operating cash flow turned positive at NIS 47.3 million, but it was not built only by the buyer. The company itself attributes the improvement to about NIS 31 million of customer advances, mainly from Netanya, about NIS 48 million of growth in suppliers and institutional liabilities, and about NIS 25 million of inventory reduction, offset by about NIS 27 million of higher receivables and debtors and about NIS 40 million of interest payments. In other words, the interim period was funded not only by the customer, but also by supplier credit, lenders, and the balance sheet.
This also has to be read together with working capital. On the ordinary balance-sheet view, the company ended 2025 with positive working capital of NIS 92.0 million. But in the same disclosure it also calculated positive working capital of only NIS 18.5 million over the coming 12 months. That is already a different number. It means the cushion exists, but it is relatively narrow, so deferred-payment sales terms are not only a marketing question. They are a financing-flexibility question.
Accounting, again, still does not reflect the full gap. In Netivot the company says that at the current low execution stage there is still no material effect on the statements, and that financing income from the financing component will only start to be recognized as construction advances. In Netanya the project had not even begun recognizing revenue through end-2025. So anyone looking only at the income statement could conclude that if the financing component is small, the concession must also be small. In reality, the concession may already exist, but still sit outside reported profit, inside the sales terms and working capital.
Bottom Line
This follow-up is not arguing that the company "did not sell." It did sell. It is also not arguing that every 20/80 structure is problematic. In Modiin, for example, the gap is shorter and the company itself downplays its importance. The problem begins when a sales book looks strong, but a meaningful part of it rests on deep payment deferral, partial indexation concession, and some demand that also comes from inside the related-party circle.
In Netivot that is especially visible. 69 out of 79 signed apartments at the end of 2025 were sold on 80/20 and 85/15 terms, together with an indexation waiver, while the project was still below 20% execution. In Netanya most transactions rested on 20/80, only eight new deals were signed during 2025, and the book also included six purchases by related parties and close associates. At the same time, 2025 operating cash flow was built to a meaningful degree from advances, suppliers, and inventory rather than only from full customer collection.
That is the central line. In a leveraged residential developer, sales quality is determined not only on the day of signing, but also by who carries the interim period until delivery. In 2025, at least in part of Gilad Mai's project base, the answer is that the buyer carried only part of the path. The rest was carried by the sales terms, the financing framework, the suppliers, and the balance sheet.
Disclosure: Deep TASE analyses are general informational, research, and commentary content only. They do not constitute investment advice, investment marketing, a recommendation, or an offer to buy, sell, or hold any security, and are not tailored to any reader's personal circumstances.
The author, site owner, or related parties may hold, buy, sell, or otherwise trade securities or financial instruments related to the companies discussed, before or after publication, without prior notice and without any obligation to update the analysis. Publication of an analysis should not be read as a statement that any position does or does not exist.
The analysis may contain errors, omissions, or information that changes after publication. Readers should review official filings and primary sources before making decisions.