 making money off the property industry can be difficult. But today we give you simple tips, tricks, as well as advice on how you can maximize your property portfolio. My name is Dumi, and this is the Private Property Podcast. Welcome. And currently the CEO. We started BeGrand with three partners. It's me, myself, Andile and Mandisa. Typical day in BeGrand now. Well, I'm in a transition of handing over the business to somebody else, because I've trained someone, through identifying that person through the pipeline streams that we build in BeGrand. But the typical day is basically going out there, checking the books, sourcing clients, leads. And when I get leads, then I pass on to my lions, as I call them, my agents, people that I work with. Yeah, so basically that is, look after people's books also, when I say that managing body corporates, we also manage individual burdens, and clients. So basically that's what BeGrand does. And talk to us about the passion behind real estate. What inspired you to join real estate and start your own real estate agency and all these different holdings that you are now a part of? So growing up, it was that simple. I would say we were fortunate enough, and I say we, I mean my brothers and I, were fortunate enough to live in an environment where you've got their streams and you know, so you've got, we middle class, but you have the very poor and you have the rich people and you're sitting in between them. And you get opportunity to play with your kids, get into families, and get to see what they do. So I think to me running business has always been something that I lived with since I was a child. But with real estate, with property, it's something my mom planted in my head, whether she did it intentionally or unintentionally, it just worked. So as I was growing up, my mom was a secretary and she was doing well. So one day I asked my mom, why don't you have a car? Because all her friends had cars. And my mom looked at me and she said, you know, if I don't own this property, we stay in, I'll never buy a car. And that's exactly what she did. And she said, my son, if you grow up, there are four basic needs of human beings, right? Which is food, shelter, which is property, water and electricity, and clothing. So if you run a business around this four basic needs of human beings, you'll forever be successful. Sure. And definitely that was good advice. Let's talk about the concept of property financing and how one can obtain property financing and use it to their advantage. So I worked for five years, quit my job because of property and because of rental income, right? So I'm a living example. Wow, when I came here, I didn't have anybody to help me support my business, financial support. I had to use my mind. The best asset you have is your mind. If you tap into your mind, you'll forever be successful but you have to work hard, right? With property, the first thing you need to do is to look after your finances. So mean, make sure your credit record is intact, right? And if you do that and you have source of income, so people say buying property with no money down deal. Is it possible? Yes, it is possible. Have I done it before? Yes, I have done it before but it goes with your proof of income. So you can never make buy property with no money down because you need to use some sort of income, right? Whether you're going to borrow money from somebody else or not whether it's your money, you've got a skin in the game or not, you just have to have a proof of income but your credit record is what propels you. That's very important advice. You know, a lot of people think about property and the stumbling blocks that come with it. You're speaking about financing now. What are the legal factors that one should consider when they're looking for property financing and looking to get property? Well, so I made my first mistake when I bought a property because when I bought my first property, the bank says you qualify for 700. And when I did my homework, the property that I was buying qualified for 400, right? I thought I've got a sweet deal. I got to the bank and the bank says, no, we cannot give you 700. We cannot even give you 400 even though you've got affordability of 700,000 rent. And I ask why? It says because of the area of risk. So there are risks involved. It's a personal risk which is your credit and then it goes to the property risk which is the area that the property sits in, right? So the important thing is that you need to make sure that you've done your homework. If you're buying properties as well, you have legal fees that you pay. So there's a bond fee, there's a transfer fee, there's an initiation fees that you pay. So those are and also comes with maintenance, administration fee, the property administration fee. If you're buying to stay in, you must know that at some point you're going to maintain your property that are written in textiles that you have to pay. So those are the things that I didn't know. Well, I read a lot of books but I was reading American books, right? And then it got, it hit me. And that's the South African context. Yes, but I think it's the jargon that you read in the books that makes the difference because in South Africa you have your own terminology that we use. So that's very important that you need to understand the cost, the total cost involved because otherwise you'll be burnt. And then people will say, no, you don't make money in property. It's just a scam. It's just, you know, people are bluffing. You will make a lot of money in property but you need to make sure that you've done your homework. True, yeah. Thank you so much for that. And that sounds like really, really good advice for anybody who's a first time home buyer or someone who's prospectively looking into coming into the property spaces. So take down those points as very, very important. And let's talk about now property or the property game in the real estate business being a very lucrative one. And how does one obtain financial freedom? You're speaking about it in terms of saying, some people look at it as a scam because they didn't get the fruits that they were expecting. How does one proof their vision and their goals? You know, you said something very, very striking in terms of you want, it's a purpose driven task. So how does one safeguard their task and make sure that they get financial freedom as well as make a lucrative business? So two things, obviously it's financial freedom but you only make money or you only attain success if you help people. So people go into property with deeper mindset and want to make money now. I go into property based on what my mom said to me, provide value, shelter. So if you help people, people will help you grow. If you look down on people, people will push you down. So respect is key. That's the first principle of making money, right? And you need to work hard. You need to be patient. That's what people don't have. Property is a long-term game. So you need to be patient. I got into property. I had to make a lot of sacrifices. I bought three bedroom apartment. I stayed in one bedroom, I rented two bedroom out. So people will look at you and say, why are you doing that? You're a banker. Why would you live like that? But again, you said purpose-driven, right? So what is the vision? What is the why? You want to do something. Once you've done it right, you are going to make money. But the important thing is that you need to look after the numbers. You cannot be staying in Faruna Khan and have properties in Rosetenville and you're thinking that you're going to do well. Unless you have an agent, then you are going to do well. But if you want to run everything by yourself, you're not going to do well. At the beginning, though, you have to run the properties by yourself so that you can understand how things work. By running the property by myself and trying to give it to an agent is what brought the birth of big rent. Because I wasn't satisfied because I could do it better than myself when I was doing it myself than the agent. There are good agents out there also. So those are the things that you need to look at. You need to, again, it's the goal. Why are you doing this? Who are you helping in the process? And if you're helping a lot of people in the process, you make a lot of money. If you're helping small people in the process, you make small money. So it's all about how the capacity or how strong you are to be able to get to where you want to get to. Sure. Let's help a property investor tonight who's sitting at home and is thinking, I want to go into property. And we asked this question to say, which is the best way, rather, to invest in property? Does one get a home equity loan or a home equity line of credit? Well, so if you get a home equity line of credit, you're assuming that you already have a property. Okay. Because it's just a credit limit that you've got against, it's an equity. Equity means that the excess you have on top of the cost. So when you take the current property value against the historical cost, purchase price, then you've got a gap. That margin is what you're calling the home equity line of credit. But then the banks will give it to you and you use it as a normal credit card. So when you use it, that's when you pay interest. If you haven't used it, you don't pay interest. So in South Africa, if you bring it down, it's what you call the federal loan. So when you buy a property now, the bank says to you, or if you've done your research properly, you say, I'm buying a property for 400,000 now, but I know in future it's good worth 750. So when you registering the bond, can you register the bond at the level of 750? That's your credit line. So that's the first thing. If you don't have, then you don't have equity. So if you're a first-time buyer, unless you've got an uncle or a mother with a property somewhere, then you can play that game. To go there and go buy a property. If you're a first-time buyer, you just go, it's a simple vanilla deal. Go into the bank, do your credit record, make sure you've got the right credentials. You've got a rating, I think here it's about 600. You'll find, right? You've got the proof of income, some sort. You've done the inspection, you've got a, what do you call it? Approval in principle before you get there. So that's it, but now if you talk, you know what's hellock, as some people call it, then you're talking to a person who actually probably has a property before or knows somebody who's got a property. Sure. And which one would you advise someone who wants to start investing in property, not just maybe buying a property to live in, but investing in other properties? Which one would you advise them to go for? Well, it all depends on the numbers, right? But of course, if you're going to use equity line of credit, it's the smartest way to go. But you need to be careful, you don't default. So what I say, the policy is I will never take that money to go mess around. When I take that money, the first question is who's paying for it? If Echo is paying, I'm not taking it. If Toomey's paying, probably yes. So yeah, so that's the simple answer. Sure, and it really requires some thinking and some strategy behind it, because if you're going to go into investing, you need to have a strategy. So you know, in your opinion, what would you say the current state of the South African property market looks with looking at the historic data and how the market has looked over the past couple of years? So I think coming out or coming on the back of COVID, you'll say that the market is probably, we're getting positive notes in the market. But personally, if I use, there's a full cycle of real estate, which you go through your recovery states, which that's the sweet part where, because you measure vacancies against time, right? So your recovery state is when there's lower vacancies. So it means that there's more demand for rentals, for example. And then you then go through your expansion. We've gone through expansion, you see there's a whole lot of construction going on. So you're in the hyper-supply market where you drive around anywhere at the corner, you see a yellow metal, there's a construction going on. So I feel that we had a point that's, and with the job losses and with everything that's going around, with interest rates also going up, we had a point that we might be entering to the recession phase of property. And if you're there in the recession phase, it means that there's a lot of vacancies. And that's what we see. If you drive around something, you see a lot of offices empty. That says that we are going through something. But there's still, there's those anomalies where you can still get some profit out of it. But it all depends on the strategy that you use. In every market, depending on your strategy, you will still make money. Sure, yeah. Definitely. But you need to understand that that's what I teach in my class. And going and talking about your classes as well as being a business success coach, I have it under good authority that you've mastered the negotiating skill. So take me through what advice you would give somebody who's a prospective real estate agent, is in the market and is new. How do they make a success of their career, especially with what you've mentioned in terms of the market and the landscape changing? So I, well, I talk from my side, right? From personal experience. And actually these seven, these five values that I'm going to talk about, I've actually made sure that I've embedded that in my family life now, my kids live on those five principles. It's just simple. First thing is respect. You see, I've done a lot of deals. We're sitting on over 80 units. I've done a lot of deals just through my carpenters, my cleaners, my painters. So the places that you think that there's nothing and they're dirty, that's where the money is sitting. Think of it, gold comes out of what? Dead, dead, right? So you need to respect. You need to have integrity. If you have integrity, you're going to have teamwork spirit. And if you're a team player, people will give you deals, right? So you must be creative. You must use your mind. Just think that's all you have to do. And that mind is for free. It's one of the things we don't pay for, right? So if you have those kind of, these values that I'm talking about, and of course, as a real estate agent, you need to look good. You need to dress well. I'm not saying go to a certain, go buy an expensive, no, come on. Look smart, presentable. Talk to people. Find how people are doing. Be a, you know, if you have interpersonal skills, if you understand how people think, if you have empathy, you'll probably be able to become a successful agent. That's definitely. Thank you so much for that. And before I let you go, we're going to do something quickly. So you're going to pick a card here and that card is going to give, it's going to give us how many tips you need to give us in terms of investing. So just pick a card there. You can say, okay. What number is that? Number five. Cool. So I've got a number five there. So before I let you go, please share five finance tips that you would share with young investors out there. So my five financial tips will be, of course, you know, make sure that your credit record is intact, right? You need to think of how to make your money grow. Your bank balance grow, right? That's, you need to figure that out. You need to control your expenditure. You have to have a budget, right? You need to, once you've done that, you need to find a way that you're going to make your money multiply. So for example, let me give you a simple example that I use. Let's say you've got a basket with 10 apples, right? 10 apples. When you take nine apples, so in the morning you fill it up with 10 apples. In the evening you take out nine apples. And every morning you fill it up with 10 apples and every evening you take out nine apples. What do you think will eventually happen? It will overflow because every day you leave one, you leave one apple. It will take time, but eventually in five, 10, 15 years, you've got a lot of apples and you're still concentrating on your 90. So I'm talking whatever amount that comes in your hand, 10% is yours to keep forever. That's the apple analogy, right? If you be able to master that within no time, you look around and think, what the hell happened? How did I manage to buy all these properties? But it's a simple philosophy. The three months ago? Yeah. So the three months, you must guard your treasure from loss. Your treasures, and I got that from a small book I bought for 80 rent and that book has made me millions. The richest man in Babylon. Guard your treasures from loss. If you do that, so basically how do you guard your treasures from loss? And it's fortune, loss, a shining mark, right? So it means that when you start making that money, you must make sure to me might come or Jabu will come and say, hey dude, there's a guy down there that's running a shoe factory and needs extra amount of money and you have that money. You must think that guy that's running a shoe factory was a shoemaker before. So if you come to me and say, do not try to want to buy a property here in sentin and I want to invest, I'll give Donald Trump my money. But if you come to me and say, Donald Trump wants to build a gold mine, I will never give him my money because he's not an expert. So you need to be careful of that. And then I think the, is it my last principle? Two more, two more. Two more, so ensure future income. So how do you ensure future income? To me, it's my home. It's the ground that I live. It's where my kids live. When I get to them, how do I feel, right? Do I have insurance policies? That is how you ensure a future income. Then the last one is increase your ability to earn. Find multiple sources. So I started by just buying properties and then I bought a business out of buying properties. And then now I motivate people buying properties. I'm a strategic facilitator through properties. So there's a lot of income streams that you can get out of one single product. Just specialize. When anybody sees me, they see echo the property guy. That's it. But within the property guy, how many income streams am I burdened out of it? True. So that's the last advice. Increase your ability to earn. Thank you so much. And what a well-rounded conversation. Thank you so much for joining us and sharing such great insights with us here. And just like that, we have gotten to the end of our podcast tonight. Thank you so much for staying till the end of the episode. We will see you next time. Same time, same place, right here on the Private Property Podcast. Have a good evening.