Property Magicians Podcast

Bonus Episode: How to determine if a property is profitable or a good investment

In this week’s Property Magicians Podcast, we bring you a bonus episode from a class we had for our stokvel members where Leroy taught us about running the numbers and analyzing a deal so we could understand what makes a property profitable and if it's ever a good idea to make a loss in cash flow on an investment.

In this class, we learned that there are three stages when it comes to running the numbers:
Stage 1: Capital Cost
- Transfer Attorney fees
- Transfer Duty (if your property is over a million rand)
- Bond Attorney fee
- Deposit
- Auctioneer costs

Stage 2: Refurbishment/ Holding Cost
- Rate & Taxes
- Electricity/water
- Bond/interest
- Refurbishment
- Levies
- Insurance

Stage 3: Letting/Resell Cost
- Bond/Interest

-Insurance
- Rates & taxes
- Levies
- Maintenance
- Management fee
- SELL- EA Commission

Leroy also taught us some fundamental Calculations:
● How to calculate gross yield and why this figure is important
● How to calculate cash flow so we can know if a property is a good investment
● How to calculate capital cost so we could budget and know how much of our own
money we are investing in a deal
● How to calculate ROI (Return on Investment)

This is a very valuable episode, so we recommend you get your pen and paper out and take notes. And don’t forget to join the Property Magicians Stokvel because we’re building an incredible property portfolio and providing real estate education.

 

 

Episode 123: How to earn passive income with short-term rentals as a full-time employee

In this podcast episode, we talk to Lebo Ramafoko who shares with us why it’s important to understand the politics of financial institutions and how even as recently as 1998- black South Africans had not been exposed to financial institutions and had limited options to get mortgages or even negotiate terms on their loans. 

 

The psychology of the “big house” for a black child. How the big house emanates from lack, from wanting to show up in a particular way, be applauded by our community and friends. We buy big houses for psychological and deep-rooted reasons too - hers were personal reasons after losing both parents within months of each other. 

 

Becoming a landlord for Lebo was circumstantial, she owned over 8 or 9 houses before she actually viewed her house as an investment and she became an accidental landlord.

 

She sold her “big house” and a smaller apartment to buy an investment apartment. When COVID hit - she took advantage of the low prices and bought a 1-bed apartment. But the long-term rental strategy showed its shortfalls. Long-term tenants offered low rentals. COVID and rental offers were so disappointingly low. 

 

She moved to Cape Town for a new job and made use of her time while in Joburg to scout for reasonable hotel-quality accessories and furnishings. It took two weeks to furnish the apartment. She started renting out the apartment in mid-2021 and she’s had 100% occupancy for over 14 months. And finds it highly profitable - it pays for itself, she makes a profit so much that she’s gotten a new apartment in Cape Town!

 

This now is her investing strategy- at the time of the recording- she was ready to buy a third apartment for short-term renting. 

 

This is another incredible podcast.

Episode 122: How to make R27,000 (US$1,695) per month on your first property flip

In this week’s podcast we talk to Susan Granger who defines herself as a creator. She explains
that all her adventures have to do with what she feels inside her. She creates because she wants
to see something growing.

She is the owner of Nubian Q Urban Farm where she grows her own food organically and teaches others to set up their own sustainable food gardens. She also has a seed bank that she has started creating and is currently sitting at 400 species of seeds.

Her food garden is in an estate - she uses small amounts of land to build sustainable food.

She bought a house after her husband’s passing - she realized she needed to survive, so she
reached out to Dr Miranda for property mentorship. She hired two lawyers just to be safe, an architect and a project manager and started the purchase of a property in Yeoville.

She bought a single 5 bedroom house, a kitchen, one bathroom and one toilet. The house also a had a patio and other outside dwellings including a salon. Next to the salon there were other 2 rooms with a bathroom. The house had not been occupied for 4 years and was run down with dog poo and rodents in the house.

They converted the 5 bedroom property into 9 self contained units - each unit has a bathroom and a kitchenette and is open plan. Every unit is different and they decided to keep the aesthetic of the unit but they had to replace the plumbing and rewire the whole house.

The property cost R820,000 and R380,000 to renovate and is still under renovation (renovation started March 2022). Her focus when she was renovating the property was to create a brand and build a house with dignity so she bought instant water heaters and provided free wifi in the property.

When they were done renovating the house, they received several offers to purchase the house, but she chose to keep the house and rent it out. The lowest monthly rental is R3,000 and she is increasing it to R3,700.

This is another incredible podcast.

Book that inspired Sue:
She doesn’t read but she is obsessed with tiny houses on YouTube

Contact:
Instagram: https://www.instagram.com/nubianqurbanpatch/
Instagram: https://www.instagram.com/pivot.propinvestments/ 

Bonus Episode: Make 17% ROI per annum in your next property deal

In this week’s episode we share our next Property Magicians Stokvel deal. This is the fifth deal that we will be investing in as a stokvel.

Here's a quick summary of the minutes and what was discussed at the meeting:

The meeting starts off with Vangile greeting everyone and giving us updates on the stokvel.

Vangile than hands off to Miranda so she can brief us with Deal 2’s payout that is happening in Aug 2022 and how everything will work. Miranda then takes us to Deal 5.

Miranda explains why the first investor didn’t work. The reason was that she couldn’t get a hold of the seller because the person was currently out of the country. Meaning she couldn’t produce an OTP.

But Miranda did let the investor know that when all is sorted, they can come back and propose their deal to the stokvel.

Miranda then explains the NEW deal 5 that has been put in place. The deal is with Mzwiwethu, the same developer we invested in with deal 3. We are partnered with Sakhisizwe Funders Stokvel meaning this investment is for 12 months (July 2022-July 2023). The return on investment is 17% per annum, to protect our investment we have been allocated with Erwe at site to sell should the deal not go as promised.

Miranda then shows us pictures of phase 2 and 3 of the Mzwiwethu project and how far they are. She then tries to share a video with us but due to technical difficulties it was sent to the WhatsApp group, and she explains what the video is showing.

The Amount that the stokvel currently has in both the Stokfella acc and FNB acc totals to R380,075 (US$24,035). So, we have until 24 June, 2022 to top up investment going towards Mzwiwethu contract 1. Then we have until 24 July to collect the second Mzwiwethu contract. The aim is to raise R3.4 million between the two stokvels (Property Magicians & Sakhisizwe).

Miranda starts taking us through the payment options available to everyone nationwide. For more details visit our website.
Q and A.

Vangile takes us through the spreadsheet process of money allocation and how it works and how the members can assist by ensuring we have put the correct figures.

You can learn more about the Stokvel and how to join at these links:
- https://www.wealthy-money.com/stokvel
- https://www.wealthy-money.com/stokvel-faqs

Episode 120 (repost): From Being a Creative to making R100k (US$6500) in his first real estate deal

In this episode, a serial entrepreneur and creative Tsotetsi of the Moleleki-Group shares his journey of being in sales, an account manager, a stylist and a brand manager for various corporations. He loves design from clothes, furniture AND beautiful spaces. This is what landed him with architects and developers of “high-end” properties in the North of Johannesburg.

 He had very little knowledge of real estate when he did his first deal - a “flip” that yielded R100 000 (US$ 6 370). He bought a piece of land in a high-end Estate from a “distressed owner”, the land already had municipal services and was ready to build. He then sold off the land at a profit and never looked back.

Tsotetsi considers himself a differentiated “realtor” in that he does not wait to find one seller at a time. He often finds himself with a stock of newly built high-end properties or stock from the banks and Attorneys that are selling off “distressed properties”. He “solves” the many property problems that both investors, developers and funders find themselves in.

In this podcast, he shares the various ways of “sourcing” properties to sell, or match buyers to sellers! He also shares- his story of almost going bankrupt THREE times in this business and how he was able to change all this.

Here is an inspired story of a self-taught property manager, property investor and realtor.

 

CONTACT TSOTETSI:

Website: www.molelekigroup.co.za

WhatsApp: 0788675766

Episode 121: Buying your first property at 21

In this episode we talk to Thembisa Winston Kunene, a 25 year old entrepreneur by profession and a selfless philanthropist by passion. He considers himself an old soul.

 

He was born in Swaziland, but his dad lived in South Africa, which is how he ended up moving to South Africa at the age of 5. He went to an international school and was exposed to different races and different cultures.

 

He built relationships at his school that allowed him to work as a receptionist for one his friend’s parent’s recruitment company, which eventually landed him a job as a PA at Pam Golding, where he was mentored about the real estate industry.

 

He bought his first property from sellers that were leaving South Africa, who were listing the sale as urgent. The property was R450,000 and he got it for R270,000 and used his savings to pay for the transfer costs.

 

He currently has a tenant that pays him R4,500 a month for that property. He had already mentally started preparing to get a property and started building his credit score before he got his first property.

 

He got his second property (2 bedroom) through an installment of sale agreement in a golf estate and it was a divorce sale. The couple had decided to move out and wanted the sale to happen urgently.

 

He got an attorney to register his name against the title deed and to pay off the profit in 5 years. He aimed to pay off the property in 3 years and make a R500,000 profit when he resells the property.

After getting the second property, he negotiated with his dad to use his land to build property and get into short term rentals.

Tune in!

Episode 119: How to make a fortune developing low-income housing in South Africa

In this week’s episode, we talk to Isaac Masilela, the founder of Mziwethu. He was born on a farm in Mpumalanga, where his father was rendering his services for a place to stay. Watching his parents build houses with mud and farming to sell food, shaped him to be the entrepreneur he is today.

 

When he went to Secondary School, he went to live with his uncle who had structured houses; he decided then that he would build his parents a house. He became interested in housing and building houses.

 

In 1999, he had an opportunity to rent a 3 bedroom apartment to rent with friends, because he couldn't afford to pay for the house and his new car. This taught him that he could collaborate with people. 

 

He bought his house in 2000, a few years after working for 3 years and took an R120,000 bond and invited his friends to stay with him and charged them rent so he ended up staying for free.

 

This sparked his interest in property and he decided to buy another property, which he rented out to someone. By 2004 he had 6 properties in his own name.

 

He then decided to buy a half complete house. He completed it and flipped it. He had no experience in building a house and had to register as a builder. He made a profit of about R300,000 on that house in 2 months. This motivated him to keep going in building houses and selling them.

 

In 2005, some guys approached him to start building some properties together and do property development and they ended up building 20 upmarket houses in Witbank. By the time they completed the development, the recession hit in 2008, so they ended up with R30 million in properties.

 

Because it was a recession, people were not qualifying for home loans, which encouraged him to pivot to lower-income housing and social housing, because people were qualifying for lower-priced properties.

 

His company, Mziwethu, focuses on the Gap Market, where people get grants from the government and housing subsidies from their employers. Fast forward to now where his company builds hundreds of houses per annum for the low-income market.

 

This is how Mziwethu ended up partnering with Sakhisizwe and Property Magicians Stokvel, which have invested a total of R3 million into their project in Secunda so far; we are now discussing how to work with Isaac to help his company generate R1 billion in revenue per month.

 

This is another incredible episode.

 

Tune in!

Episode 118: Making US$2,000 - US$4,000 a month with a guest house in Botswana

In this week’s podcast episode we have Malebogo Zilberman. Malebogo is a 39-year-old Fellow Chartered Accountant registered as a Fellow with the Association of Chartered Certified Accountants (FCCA) and a Fellow Certified Professional Accountant registered with the Botswana Institute of Chartered Accountants.

 

Her first property deal was a deal she entered into to help her mom develop back rooms. 

 

She understudied her mum's development journey and saw how she used cash to develop 7 backroom houses and used them as a source of income. She saw how her mom started the first 3 rooms and then kept adding other rooms as and when she had saved from the existing rooms.

 

So she decided to do the same as an investor. She bought the first plot about 10 years ago from her young brother; she waited until she had enough savings to develop it. She eventually developed this property into a 2 bedroom house that currently rents for US$270/ month.

 

She and her husband bought a property in town and decided to turn it into a Domestic Guesthouse to earn an income. The house features 5 en-suite bedrooms, capable of giving a monthly income of between $2,000 to $4,000 Monthly, depending on how busy it is.

 

Lebo is currently working on a new project - developing and building 10 units.

 

This is another incredible episode.

 

Tune in!

Episode 117: Using multiple strategies to build your real estate portfolio

In this week's episode of the Property Magicians Podcast, we talk to Xolile Rikhotso Mashaba. Xolile is a mother of 3 and a wife. She studied Electrical Engineering at college and is currently studying HR Management at a college. She is a qualified underground Electrician by profession and a property investor. 

 

Xoli wasn’t thinking about real estate investing when she started her real estate journey. She and her husband were looking for a place to live and her father in law sold them a 2 bedroom property he was building in the township in Emalahleni (Witbank).

After a while they decided to move to the suburbs and converted the property into a 10 unit multi-let and rented each of the units for R1,500 (US$93) per month. They are now in the process of renovating that property and increasing the rent to R2,500 (US$155) a month.

 

After buying the house in the suburbs, they bought another house using a rent to buy strategy, they paid off the house in 5 years. They rented out the main house to Xoli’s brothers at market price and the outside apartment to a tenant.

 

Xoli started following real estate investors online and started learning more about building a real estate portfolio, she then bought 2 pieces of land and another house.

 

They renovated the house into 7 studio units, each with its own separate entrance and they are in the process of building 20 apartments on one piece of land and 5 two-bedroom units on the other piece of land.

 

This is another incredible episode.

 

Tune in!

Episode 116: How to own property in Rwanda

In this week's episode of the Property Magicians Podcast, we talk to Funke Alao again. We first interviewed Funke in episode 87, where she shared about the real estate market in Nigeria. Funke is a realtor in Nigeria and does business in Ghana, Rwanda and soon Kenya. 

 

In this episode she is sharing about the real estate market in Rwanda where her company has apartments available for sale. 

 

She shares that she fell in love with Rwanda because it is so beautiful and so organized, especially when it comes to structure and the vision for the country. The Rwandan government is also keen on the quality of the buildings, they do a lot of inspection and quality control so investing in real estate in the country is a good decision.

 

Funke explains that owning real estate in Rwanda is attractive because the government of Rwanda is also investing heavily in tourism, which makes up 46% of GDP; this is also increasing the number of people going to the country. 

 

More tourists also prefer short term stays like AirBnB instead of hotels, which opens up short term rental opportunities.

 

Funke started off her business in Rwanda focused on residential real estate but she soon realized that because of the ease of doing business in Rwanda, commercial lettings were also in demand. 

 

Rwanda is ranked second best for ease of doing business in Africa and because of that, the demand for commercial property will increase because more companies are establishing businesses in the country.

 

In this episode, Funke also shares how to register a company in Rwanda and how to buy property in Rwanda, because her company does have apartments available for sale.