As an investor, I learnt very early on that you need to leverage OPM and OPS – Other People’s Money and Other People’s Skills. In order to build my and other people’s properties portfolios, I’ve realised the need for partnerships.
Through partnerships we can leverage off each other’s skills, resources and contacts. If you are interested in working with me, I can provide you with two options:
JV partnerships & Sourcing
A partnership is a great way to build a massive property portfolio. Instead of using only your own money, a partnership allows you to pool your capital together and make bigger, better deals happen. I partner with select investors and purchase properties together with them. This is a great avenue if you want someone, who has experience, to help you purchase a great investment.
- Capital invested: R1.6m (50/50 split between Laurens and Investor)
- Purchase Price: R1.5m
- Transfer Costs: R55k
- Meter Installation: R5k
- Rent = R25k
- Gross Yield: 20%
- Rates and Taxes: R5.7k
- Management: R1.8k
- Maintenance: R1.5k
- Voids: R1k
- Insurance: R500
- Other: R1k
- Cash Flow: R13.5k
- ROI = R13.5k x 12 / R1.6m = 10%
Are you interested in purchasing a great multi-let investment but don’t have the time or area knowledge to get started? I can source you with a pre-negotiated and analysed investment. Instead of banging your head against a brick wall, allow me to find, analyse and secure a great investment for you. I charge a minimal fee for this work, either one months rent or 6 months worth of cash flow.
- Purchase Price: R2.8m
- Rent = R55k
- Gross Yield: 23.5%
- Rates and Taxes: R15k
- Management: R4k
- Maintenance: R5k
- Voids: R4k
- Insurance: R2k
- Other: R3k
- Cash Flow: R22k
- Sourcing fee: R100k
- ROI = R22k x 12 / R2.8m = 12%
How it Works
Process followed to Secure the Deal
1. Find the Deal
Using several channels; Property24, estate agents and distressed leads, I can find great multi-let deals.
2. Due Diligence
Includes deal analysis, reviewing reports (TPN), review proof of income / expense (AFS = annual finance statement), building inspection, viewing the property, interview tenants, review exit strategy.
3. Secure the Deal
With an offer to purchase (OTP) and include several exit clauses.
4. Raise finance
Using my contacts and experience, I am able to get up to 80% LTV for blocks of flats. The remaining costs will need to be financed with cash.
5. Manage the Property
Using my reliable power team, I can ensure the property is managed and well-run, with minimal monthly effort.
What ROI do you aim for?
It will depend on the strategy, the area and the overall risk of the deal. When looking at buy to lets, we aim for 10% ROI (after all expenses, including provisions of roughly 20%). Multi-lets we aim for 12% (post-provisions).
What is best for me? Sourcing or partnership?
This depends on what you are trying to get out of property. Do you want to get your hands dirty, manage tenants and enjoy better returns at a slightly higher risk – then sourcing would be for you. If you want a trusted and experienced partner to manage your investment for you – partnering would be better. It depends how active you want to be in the property game.
Do you only partner with cash investors or investors with access to finance eligible?
I mostly partner with cash investor, as I have my own way of accessing finance… but I am willing to partner with anyone who is passionate, diligent and hardworking.
Are we going to setup a company to invest together in the joint venture?
Yes, we will purchase each investment in a company structure where an accountant and qualified attorney will document the agreement and T&C’s.
Do you only focus on deals in Johannesburg South?
Yes, I have found that focus breeds success. The multi-let market in JHB South is not only an area I know very well, I also have a dedicated and reliable power team that can manage the investment. The system is setup and the opportunities are ripe.
What's the minimum contribution I need to bring to a joint venture with you?
This will vary from deal to deal, but most times I would expect a minimum capital contribution of a 20% of the offer price.