Hi I am Nwamara Obiike and I am a 27 year old Black woman; and this is my story about how I accumulated six properties by age 26.
I come across many people with whom I have interesting conversations regarding money, family & investments. Each new person (all of similar age) are extremely surprised that I currently have investments in six different properties. This not only indicates that they assume it impossible but also indicates the financial empowerment still needed in our black communities. In order to bridge the financial gap, to close in on decades of marginalization where our counterparts built wealth, we need to find ways to accelerate this wealth building, lay stable foundations and let go of the mental shackles.
- Making the decision to stop paying someone else’s mortgage.
At age 24 I had been a tenant for 2 years. The rent was cheap- at first- and the apartment was beautiful. It was this wooden floored, open plan style apartment with high ceilings in the heart of a cultural node in Durban, South Africa. I had just moved into the city when I found it so you can imaginee I needed that soft landing. But after two years of blissful stay and another rent increase approaching I could not bear the thought of parting with that amount of money with no asset attached to it. So I made the decision to stop paying someone else’s bond & started the search for property 1. I found a quaint apartment also in the heart of Durban closer to the ocean at a decent price. It needed a kitchen renovation (but that’s a story for another day) but besides that it was in great condition. Before putting an offer forward I researched for the previous purchased price of the flat (yes, this stuff is available online) and it can be a good indication of what offer to put forward in the current market conditions. I low balled the seller, because sellers will always counter. Because I was a first time buyer, I used my qualification and good credit score to get 100% financing from my bank at a favorable interest rate. Financially the end monthly costs were about R1000 ZAR more than my rental which I was happy with, it was my asset.
2. Taking a Risk
Needless to say I selected bank 2 and raised the 10% through savings and family (family is interest free 🙂 ). This was my first investment property to be tenanted.
“In property, you make money when you buy, not when you sell”. I took a risk and put my name up and forward to the bank. This is probably one of the few times that you truly benefit from being a full time employee- Banks LOVE to give credit to clients working for corporates. I financed this property also through a bond with two bank offers to choose from, Bank 1 at 100% with a very unpleasant interest rate and the other, Bank 2 at 90% with a favorable interest rate. Banks will test your commitment and stability by giving you 90% as you will need to raise the remaining 10% as a down payment. After doing the math, the interest I would pay in the 100% loan over the period of time would dramatically exceed the 10% down payment required by bank 2.
About 8 months after buying my first property I received a call regarding a new developing block in an up and coming area in Johannesburg. My first thought- “I just bought a property, there is no way I will get financing”. This was my first introduction to “new builds” and their benefits. The price you get is all inclusive with new properties, no transfer cost bond costs. It felt like a bargain because the value instantly increases once the property is completed. The earlier you purchase a developing property the more you gain once it’s completed.
3. Learning to collaborate
The potential growth and value of the second property was extremely enticing that 4 months later I took a bold risk and aimed for a second apartment in that development. Truthfully, I had no more money and would have needed to fund this property through 100% loans which the bank refused to give. I was trying to do it all on my own and was quickly reminded of Kiyosaki’s words. He spoke about owning a small piece of a big pie rather than owning 100% of a very small pie. So I made the choice to collaborate and co invest in this property. My co investor & I could not afford the property individually, but together it was lucrative. I went 50/50 and the bank was more than willing to give me 100% financing on the 50% amount.
I am no expert, this is only a part of my journey and there is a long road ahead. I find comfort in educating myself and there is no better way than reading a book that will help kickstart your voyage to financial literacy.
“I am not an early bird, or a night owl. I am some form of permanently exhausted pigeon!” J African Child | Blogger| Financial Crusader
Thank you Nwamara for sharing how you have managed to reach a feat that many aspire to. It is important that we empower each other not only by sharing the ‘what’ but most importantly the ‘how’. Execution and bringing our goals to life is everything!-Lerato