People are selfish, that’s a fact, and we inherently want the best for ourselves & “our people”. But this selfishness does not exude itself as camaraderie in the Black Culture, which I think it should. All over the world stigma and perception follows us – misconceived perception. And as a people it will only be to our benefit to master collaboration, acceptance and appreciation of each other. It is the division lines and the black on black jealousy & criticism that perpetuates white on black sneer.
You can read Part one of this blog here. Having now become an owner of three properties & learning the ropes of managing tenants, reducing costs and tax implications I shared my journey in conversation with my friend, Achoro. He owned no properties and we often debated in discussions on building wealth and its challenges, he often said “People want to win alone, shared wealth is not a culture”. As an entrepreneur it is a challenge securing funding for investments like property – at least as an individual.
4. Mastering Collaboration
When you make a decision to trust someone, and that trust is mutual – Building becomes easier. Achoro was on the lookout for a small property investment; a studio apartment to start off with when this opportunity landed on our laps. We found a trio of studio apartments on the market by the same owner. She lived abroad and was divesting her investments in SA, it was perfect – one owner means a bigger opportunity to negotiate. This was not a purchase Achoro could take on alone, & after some serious thought, number crunching on ROI & persuasion skills I was on board as a co investor. Taking the deal on together meant shared risk, and shared wealth.
“In property, you make money when you BUY, not when you sell!” it is imperative to understand that buying property at market value is not a great deal. You always want to purchase in a buyers’ market, or purchase under market value. That way when you re-sell at market value you already have your profits and need not overprice. We did our research, found out what the owners had paid for the property, current market value as well as potential growth for the area and put in a ballzy offer to purchase. Of course our offer was declined… yes declined. The challenge was we could not put one offer for all three properties, they had to be treated individually. So with 2/3 accepted offers, we went back to negotiation table.
This is where as a buyer you need to remove excitement and look at the properties with a critical eye. Paying another visit to the studio helped us to do that. It was clear the flooring was not in tip top shape and would require replacing at some point. This negative factor we used as leverage to renegotiate and find a happy price for everyone. Which we did – Deal landed!!!
6. Strategise & Plan
The paper work got underway and I had 3 additional tenants to “look after”. Six properties purchased in 24 months has been a big learning curve, a lot of admin and frightening. Yes these are assets, but at the moment they are huge liabilities. The bank owns the property until you pay it off – so do so as quick as you can. And as I take time to let it all sink in, let the dust settle it is the right time to strategize. Property is an investment yes, but it is also a business. One that needs to be taken as seriously as its risks, and planned for. There are a number of property investing models you can take. I have made use of the “Buy to let” model which speaks to long term growth, this is not an instant gratification model. I’m in it for the long haul!
“I am not an early bird, or a night owl. I am some form of permanently exhausted pigeon!” J African Child | Blogger| Financial Crusader
Thanks Nwamara for concluding how you managed to acquire 6 properties in 24months. Key learnings- be clear on why you want to get into property and collaborate . Nwamara got into property because she did not see the point of paying someone else’s mortgage. I share her sentiments. With property being a foreign idea to most of us, it is important for us to acquire the necessary knowledge. If you have recently brought property and would like to share how you managed to do so, email us on email@example.com with your story. Let us keep inspiring each other!