 Hi, I'm Clifton Smithers. I live in Belito, where my partners and I run a business called Union 3. As a family, we chose to move here about six years ago. What attracted us to the area was the safe and relaxed lifestyle of the North Coast. We surrounded by so much natural beauty and we love that it's so casual. It's just not as intense as the busy city. In fact, that's one of the main reasons there's so many people moving into the area. There's some amazing lifestyle estates out here. We've got some Bali, Brettonwood Estate and Zambiti to name a few. The Belito Lifestyle Center caters to everyone's needs. There's also some smaller commercial centers like Tiffany's and Salt Rock. There's some excellent restaurants to choose from and there's a really wide variety of activities on offer. From mountain biking out on the trails to surfing at any one of the beaches, there really is something for everyone. This quiet little town really comes alive over the weekend. The live concerts in the farmers market at the Meachulchur is very popular. With the new international airport just 15 minutes down the road and the unmatched lifestyle that this place offers, it's no wonder that the North Coast is the fastest-growing town in South Africa. My family and I absolutely love it, and this is unbelievable. Perhaps even aspiring property entrepreneurs and investors always want to know how we can either A, get our foot into the property ladder, but the very big one is B, how can we do so when we don't have capital? And to help us better understand this and really give us some of the tips and tools that we can use to enable us in our property journey. This evening I'll be speaking to Nigel Adriano, who's the CEO of the Enterprise Development Property Fund. But before we get into that conversation, of course we are running that YouTube competition where all you have to do to stand a chance of winning that 1000 grand prize on Friday is subscribe to our YouTube channel. So all you have to do is go to YouTube or subscribe to the private property YouTube channel and use that chance of winning one of two 1000 grand prizes. And of course all you need to do is take that screenshot, share it down below and use that chance of being a winner. And we'll be announcing that those two winners who are going to walk away with that 1000 grand prize right here on Friday on the private property podcast. But without any more delay, I'm going to introduce Nigel. Nigel, thank you so much for joining us this evening. Zama, thank you very much for having me. It's an honor and a privilege to be here. So I think one of the big things is, you know, people are probably wondering, you know, am I even able to start my property journey or tap into the property space when I don't have my own capital? I mean, a lot of us and certainly even on the show, we've been helping people who presumably either have capital or have access to capital. And for the most part have access to capital in terms of band financing. But of course, there are different types of ways that people can access financing when it comes to, you know, financing those property deals. And so when people even hear that concept of, you know, raising money or starting with that capital, what would your starting point be to entrepreneurs who say, is that even possible? I mean, is that even a thing? So absolutely, Zama. You've had a number of guys that we unwelcomed it with the people from Saipan and from in five properties and the like that have been on your show. And I'm sure that almost all of them will probably tell you exactly the same thing I'm going to tell you tonight. It does not matter that you do not have your own capital. We teach at the Academy, we teach our entrepreneurs and our candidates exactly one of the big things we teach is how to raise capital if you yourself do not have any money. I think then let's probably dig into the Academy. If somebody hears about the Enterprise Development Property Fund, what work exactly does it do? So I want to talk to you about the Academy tonight. Obviously, we want to tap into the conversation on raising capital. But just briefly, the Enterprise Development Property Fund is an impact fund and our Academy helps entrepreneurs who are historically disadvantaged who do not have capital or the know-how on how to get involved in the property sector. We teach them how to do that. There are 14 different disciplines that we teach and people think of our ways to see what they offer. We teach topics about property management, facilities management, energy efficiency, water management and a whole range of other things. But our main focus is to teach guys, ladies and gentlemen, select not to be sexist, how to get involved and buy their first property. We're a very practical institute. We do obviously do a lot of classroom stuff and now with the law count, we have gone fully digital. So we're teaching all our candidates online at the moment. But we do like to have the face-to-face engagements. We have classroom engagements and we've got lots of exams and topics to discuss. However, at the end of the day, even after the course is complete and the course is three years long, we make sure that every single one of our entrepreneurs has bought their first property and walks away with their first property. That ultimately for me is the graduation ceremony that they don't get a certificate but a title deed. So even though they do get certificates for the courses that they do and an overall venture creation certificate, at the end of the three years, the title deed is the most important. And what I always say to the guys, if I cannot get you to a point where you've got your first property, you have not failed this course. I, as an educated, have failed you. And I think, you know, perhaps share with us some of the success stories that you have. Because before we even look at how to raise funds, what must you should be or rather what you should be looking out for, perhaps share some of these success stories that you've had with the Academy. Because as we say, one of the big value propositions that certainly is important for you is for candidates who've walked through the path or walked through the program for them to be to have that property at the end of that journey. Do you have any success stories that really just stand out for you that you'd like to share with us? Well, yeah, where do I start? We've had so many of our entrepreneurs. We've only now been fully operational for three years. So this year, in fact, is going to be our first graduation ceremony. I left corporate in 2016 where I was the senior asset manager for the big list of fund property fund. And in 2017, we started this journey. In 2018, we took on our first cohort who was a CEO of a graduate group. Already a number of them have already purchased property. Some of them are doing development, some small and some large developments. One candidate was a black lady, who I think she's now 34 years old. She was in construction, but never break the glass ceiling in terms of becoming a developer. And effectively, what then happened was over the last three years, I've been walking around with her so that this year, she is now finally able to purchase her first two parcels of land where she will not be the person doing the construction. She'll actually be the developer and own the two centers that she's building. So by the end of this year, those two centers will be on the way in terms of the development itself. And hopefully in the next 18 months, she will have both those two centers by both small retail centers. And then she'll actually own as opposed to just being the construction company that is something for someone else. And I've got much smaller deals where our candidates, even in our first year, I have one candidate who's a trench digger at the Sconn. And before he came to our program, never thought that he could be a property investor. He lives in high literature, has an RDP house, and what used to be called RDP houses, lives in those RDP house, and came to a realization that through his facility at the Sconn, he could actually purchase another property and then use that property as an investment property, which is now finalizing the negotiations. He's got his bond approved. And hopefully within the next two weeks, the deal will be concluded. And he will then within, let's call it six weeks, depending on obviously the opening of the deeds office, they are able to check the cost of these very first property. So we range from the smallest one unit single residential to retail shopping centers at sort of the gam, you know, the length of what we do. And we've had a number of success stories where people have come with nothing and walked away. And in fact, still walking the journey, because we haven't evaluated anybody yet, but actually already I have concluded the first years. To our viewers at home, if you just joined us, you are of course tuned into Episode 38 of the Private Property Podcast. I'm your host, Uzaman Donga Kumali. Today we're talking about, you know, unlocking some of the tools and the tips in the event where you are a property entrepreneur and you don't know how to go about raising capital. And you want to find out how to best do that. And to help us better understand how you can do that, I'm joined by Nigel Ageran, CEO of the Enterprise Development Property Fund. Now Nigel, let's get to, you know, raising capital. I think it can be such a daunting experience for so many viewers at home. I think even myself included. I mean, oftentimes people say, you know, I must go to your friends and family. But the reality is a lot of us simply don't have friends and family who have that kind of equity or rather what liquid in that way. And so reaching out to them simply isn't an option. They're probably in the same predicament, if not worse than we are in. What are some of the first considerations that one should be thinking of when they're property entrepreneur or perhaps even an aspiring property entrepreneur, and they're thinking, I need to find ways to raise capital, but they simply don't know where to start. All right, Zama. So yeah, like I said, I didn't want to talk too much about EDPF, let's get input. There are a number of ways in which one can raise capital without having any money. However, in order to get there, you need to be able to build up a track record. You need to be able to gain some experience. You need to have connections with different people and organizations in order for you to find that first deal. Finding that first deal is probably the most important thing, because if you find the right deal and the return on your on the investment that your partners are going to put in, if the return is good, the money will follow. My father-in-law always used to say to me, if your deal is good, your money will follow. And that helps too. Whenever you do a good deal, the money will always follow. Like I said, there are many, many ways in which you can raise capital. Obviously, the very first place you are going to try and look is your bank. The bank, their business is to lend money. That's what they do. So they make their money by having you pay for bank fees, but where the most money is lending you money so that you can pay for that interest. So that's their business. So if you want money, that's the first place you're going to look. Obviously, if you don't have the capital to put up your 20% or even 10% because you're going to require somebody else to come and stand with you in order to help you to raise additional money. If the bank won't give you any money, then obviously you have to find other ways. And like I said, if you've got a good deal, it would be reasonably easy to convince somebody to come in with you and fund the deal. You need to find the deal. And we're going to go for a quick break and take some of those questions and comments coming in from viewers at home. And after the break, what I want us to look at, Nigel, is now you have the deal. What's next? So you've gone around, you've gone to private property.co.z and you've been on the website for the past couple of weeks, maybe a past couple of months. And you come across a really great, maybe a small block of flats or even one apartment where you think this could be the one you know the area relatively well because you've been monitoring it for an extended period of time. And you're even in touch with the estate agent, you're able to bullishly negotiate that price. And you're happy with the price that you're about to get. And now you're ready to start looking for that funding. So you found the right property, as it were, that you think is going to give you good returns. How do you then raise that capital for that particular property? We're going to take a quick break and then come back. We're going to be looking at that and some of your questions and comments will be back just after this. This evening, we're looking at the tools to kick-start your property portfolio without property fund and to help us better understand what those tools are, what those tricks are and how we can go about securing those property deals without capital joined by Nigel Adrianse, who is the CEO of the Enterprise Development Property Fund. Now Nigel, before the break, I did say, you know, now we've got our entrepreneur who's got the deal and he's quite happy he's, you know, effectively run his numbers in terms of what he think he's going to make from buying that property, from buying that particular property. And he's very clear that, look, this is going to essentially be that cash cow, that first property that will really, you know, serve me well in the coming months or the coming years. What is then the next step in terms of them trying to essentially get that capital? Okay, Zama, yeah, thank you again for having me. And effectively, to try and raise capital for a property depends on what type of deal it is. So if it's a straightforward deal where it's one house and you just enter out to a family, then that's really about whether your cash flow that you're getting in in terms of your rental income is enough to cover your bond and any other expenses like payments and whatever other costs come your way. So that's really the key. Then you need to understand the type of investor that you're going to bring on board. Are you going to bring a partner on board? And if it's a partner, what percentage are you going to give away? What are you willing to give away in terms of the profits or the business? What, whether it's a family member or a friend or a colleague. So those are the kinds of people that you can go to if you're going to put a partnership together. If it's a bigger deal, obviously then you need to raise development capital if it's a development, or if it's a big block of facts, then you're going to maybe have to raise commercial finance and you then have to go to the commercial banks for commercial financing. However, they will also, even if you do get money from the bank, they will require you to put in some kind of equity, some kind of cash, what they call, skin in the game. Because if you have no skin in the game, then an investor or a bank or anybody else will not really be interested in you because they think you're just trying to do a deal, but you're not actually putting anything in. But if you don't have any money, then your time is the skinning game that you are putting in. So really it's about what value you put towards your time and then analyzing the value versus the cash that you require from others. Once you've been able to do that and you then assess what your value is versus the cash that's coming in or not your personal value, but the time that you've seen, you then need to do what they call a feasibility study, which tells you what the return on the investment is. Once you've done a feasibility study, you put a pitch deck together or a proposal or even a full business plan, depending on how big the deal is. You then take that business plan or pitch and you then try and convince the people that you've gathered around you to put money into the deal. You then say you want x percentage and typically that can be anywhere from 10% all the way up to 50% of the deal and the equity part of the business, including the cash, they will then take anywhere from 50% to 90% depending obviously on the start of the deal. That's sort of the rough idea of how you go about approaching your investors. Now there's a book which I would highly recommend written by Anton Wightenbach. It's called 15 proven ways. You can get it that's only 200 bucks at 15 proven ways. You just have to google 15 proven ways by Anton Wightenbach. That book talks about the 15 typical ways to raise capital. There's obviously bank finance, there's guarantees. You can use other people as guarantor to get a bank loan. You can get equity partners through venture capital associations or organizations. You can get an angel's funding to come and invest with you. You can get a partnership with friends and family and a whole host of other ways. So if you look at that book, you will see the 15 ways what I can even do for you. I can send you just one sheet of speech that you or PowerPoint presentation that you could then just make available to anybody that requested or they can even email me and I can just send them those 15 ways. But basically there are these 15 ways that you can look at raising capital if you're not having it. The main point is that you have to bring the time, the energy, and the deal. That's the one to mind. And I think Nigel, you know a lot of our viewers, we've got quite a number of questions coming in and even comments around this issue and a lot of them want to know a few specifics. I think we've got a question here coming in from Lerato CFC, the idea who says Nigel, as an entrepreneur you know how difficult it is to receive personal loan of finance or funds rather for the good deal property from a bank with alternative programs or which alternatives programs and or institutions can young South African entrepreneurs explore to raise the needed funds. So what are some of the alternatives that you would recommend to our viewers at home especially young South Africans who are entrepreneurs. So 100% it is extremely difficult for a young entrepreneur to raise capital. You have no asset by yourself. Because one of the things that you must always remember when you try and get a loan from an institution, they will always want guarantees. If you have no cash and you've got no capital, you don't have an asset by you have no guarantees. Because normally if you go to a bank for example, they will say they want what they call a one and a half or two or three or two and a half times the loan facility. They want that as guaranteed depending obviously on your risk profile. So that's what they look at. They look at your risk profile as an individual, as an entrepreneur etc. So really the beginning when you start out what you're trying to do is to go as advice. But then Nigel, sorry to interrupt Nigel. I think the the glorious sentiment is how do they you know start that out or what are those alternatives. Because I get a certainly from the comments coming in is a lot of them have not on you know a lot of bank stores and have been turned away and essentially now looking for those alternatives that they can tap into in order to raise that capital. Yeah so the point I was trying to make is in order to get there to get to that point where the bank will actually accept you as a client and they won't turn you away anymore is to build up that reputation. So the way that you do it is a hard graph. Let me make no bones about it. It's a hard graph to get to that point. But the people that you surround yourself with, you need to surround yourself with people and get into networks where there are people looking for deals. People with money generally don't have time to go and find the deals. So you need to surround yourself with those kinds of people. You need to go to networking events. I personally don't run networking events but people like the second epic Anton's group. Those guys run these events where you will find investors that potentially could come in with you. Alternatively you need to connect with your family, your friends, come together and build a stock fell for example where you can utilize the stock fell as a means to raise capital to the entire company. EDPF itself even has a stock fell where we are in fact just we started the thing in January this year and the last night we were discussing our first deal. So I put together a stock fell. I said everybody I know, guys, friends, family, EDPF candidates, anybody who's interested come and join me in the stock fell. I've got a bunch of deals that I want to do. Come and join me. Let's set up a stock fell, put some money in a thousand bucks a month for person. Over a year we'll have hopefully a couple of million in the bank and then we start investing. So that's one surefire way for you to be able to build the capital. Start the stock fell. If you can't do that, bring your friends and your family, people that you know has money but don't have the time to find the deals. You find the deal, they bring the money. And I want to explore a little bit that stock fall model because I think it's one of those very popular alternatives. Certainly right now a lot of people are understanding the power of you know getting together as a collective and saving money or putting money away towards a particular goal and in this instance that goal being property. What are some of the considerations that people should bear in mind when they set up a stock fall for purposes of investing in property? Okay, so there's a number of things that you have to make sure of from a structural perspective if you have people that have put in a hundred thousand land or more. Even if it's over a period of time you have to register with the social association. If you do not you'll be in contravention of the banking act. So you've got to be very careful how you set this up and get the proper advice in terms of your structure. The first bit of advice I can give is to make sure that you are registered with the stock fall association. Once you are registered you can take deposits of a hundred thousand or more up to 30 million land. When you hit 30 million land or ever which hopefully Hunter you will be able to do but if you hit 30 million land then you need to actually get a banking license which is a lot more complicated. So I would recommend that you don't go that high when you get to a certain level stop another stock fall. But if you get a hundred thousand or more you have to register. So that's the most important thing because if you're not registered you could get fined or even arrested for taking people's money without the proper license. That's the first thing. Then number two you need a system. You need a system to manage the money. The people, your constitution, another important thing you need a constitution because without the constitution you don't know how the thing is being governed. The constitution sets out the rights and responsibilities regulations of how the stock fall is managed. Governance perspective you have to have a constitution. You have to have at least a chairman a company secretary or a stock fall secretary and a treasurer. Those are the minimum requirements when you set up a stock fall. I've seen a lot of stock falls out there that fall very partial of those different clients. So those are the key considerations in terms of setting up. In terms of your management, I personally will not want to manage the stock fall. It is a hang of a lot of work. So I use a platform called Stock Fallon, S-T-O-K-F-E-L-L-A Stock Fallon. They are an institute that has won the MPN Apple Award, the Apple Video Award already. It's a phenomenal institution. I use them for my stock fall and they do all the management. I don't need to worry about anything except our monthly needs. So every month we have a meeting, that's another thing. Prosperency is important. If you are not transparent in your stock fall and people can't see what's going on, they will accuse you of taking the money. I can guarantee you that. So make sure there's transparency. I'm happy with Stock Fallon because I love that kind of transparency. I try to sell their servers. I'm just saying that's what we use. So you need a platform or a methodology in order to manage not just the money, but the people. Then make sure that the constitution stipulates how you spend the money because you can then go off and spend the money anywhere you like. And again, you'll be accused of using people's money for your own gains. Make sure that the group when you meet and you have a quorum that says so many people have to be in the meeting. That's what you call a quorum in order to make that meeting legitimate. Once you know that your quorum is there, you can then vote on any deals that have come onto the table. And then obviously make sure that in your constitution it stipulates how many people have to vote for a deal to be recognized and approved. Then you can withdraw the money out of the bank account wherever the bank account is set up and you can then do your investment. So those are just some of the key considerations that you have to always remember and put in place. And of course the stockfile model is quite a lucrative way to be able to raise capital in the event where you don't have your own because you're essentially using the pulling buying power of a collective. And one of the big things that we've certainly covered it right here on the private property podcast is the issue of governance and ensuring that as a stockfile you have the right governance structures in place because I think a lot of stockfiles, not just property stockfiles, just stockfiles in general tend to not have the best governance structures and that's where they sometimes can or hear some of the horror stories around what happens to the money. Now Joe, before we wrap, any three tips that you'd like to give to entrepreneurs or even property investors who want to raise capital and they currently don't have ways to navigate where to even knock, which they don't know which doors to knock, they're not quite certain how to best navigate that space. What are the three tips you would give to those entrepreneurs? Okay, so three best tips I can give number one, find the best deals. That's the most important thing. The right field of money will follow. Find the best deals. Number two, get a circle of friends or acquaintances that actually have money. You don't want people like yourself who don't have money to be part of your investor group. You want people to actually have money. So surround yourself with people who have money and are looking for deals. And then number three, make sure that you put the correct structure in place. Without the correct structure, everything you do is going to fail. So those are my three tips for anybody who wants to raise capital for their property stock. Nigel, we're going to leave it there this evening. Thank you so much for joining us this evening. Absolute pleasure and thank you for having me again, Zama. If anybody wants to contact me, there can be free to do so. You can share my details. I'm quite happy to share my details and people can contact me if they have any further questions. They can email me or even talk. Perfect. Thank you so much, Nigel. And of course, this contact details are right here below on this Facebook post. So you are more than welcome to reach out to him. Should you need help in finding and raising capital? And those three tips, again, is to find the best deals. Surround yourself with people who have money and lastly to make sure that you structure the deal effectively or efficiently, rather. And of course, that is a wrap from me right here on the Private Property Podcast. Remember to enter that competition to stand a chance of winning that 1,000 grand prize. All you have to do is subscribe to our YouTube channel and take a screenshot and share it right here on Facebook. And on Friday we'll be announcing the two winners. We're going to walk around or walk away rather with that 1,000 grand prize. You can already hear the English bundles are slowly running out. So that means it's my cue to wrap it up and probably take some downtime. We're back again, of course, tomorrow with episode 39 until then hoping you're staying home and staying safe. Hi, I'm Clinton Banfield, our family and I live in Cape Town on the western seaboard. To be able to wake up and take in the scenery every day is an absolute pleasure. We probably have the best views of Table Mountain. There's some really amazing suburbs in our neighborhood. There's Mornerton, which is a central hub close to the city. There's some beautiful homes situated along the canal, which give you a breathtaking view of Table Mountain. A little bit further along the canal, you'll find Millington Golf Club, which is a great place to unwind with your mates. Then we have Blow Burg, which is world-renowned for its beaches, where your often see car surfers taking full advantage of the wind. To top it off, there's a great variety of family restaurants in the area, like Blue Peter, where people love to meet. The Bayside Mall is a landmark and table view, giving you an all-round retail experience in a relaxed and convenient environment. As a family, we've chosen to live in Atlantic Beach Golf Estate in Malkborstrand. Our suburb is so chilled, it really gives you this constant holiday feel. We've lived here for two years and we've really enjoyed the laid-back lifestyle, and this is our neighborhood.