 G'day fellow investors, my name is Jay Barcase and welcome to the Virtual Properties Show. Now over the next two days, we're going to have some amazing speakers and amazing content for the next 20 minutes, though you with me, and I'll be teaching you a few foundational aspects of what it takes to be a professional property investor. So without further ado, let us get started. Just want to minimize my camera and there we go. Before we get going, let me just introduce myself properly. As I said, my name is Jay Barcase and I'm from Port Elizabeth, the friendly city. I'm a commercial property broker, a speaker and a property investment coach for the Property Academy and also a full-time investor. Now I'm just super passionate about property, ladies and gents. That's all I eat, sleep and breathe. So, but it wasn't always that way. I've always owned my own businesses and from about 2010, I had a business in the motor industry, but I just decided that I didn't want to be a business owner for the rest of my life, living a stressful life and sometimes not even having enough money to go on a holiday, right? So what could I build on the side? I said to myself that can build a passive income, build assets on the side. So I can retire early because that was a vision that I had for myself from a young age and maybe you sitting there saying, well, you would love to retire early. Property can certainly be one of the best tools to actually achieve financial freedom and a comfortable retirement, ladies and gents. So I've invested in student accommodation, flip deals, assisted sales, back-to-back deals, multi-legs and rental properties. So quite a few strategies and there are quite a lot of strategies to cover in property investing as a whole. Now I will be taking you through one or two of those today, the next 20 minutes. One of my best achievements I'd say so far in my career is being nominated as one of the top 10 finalists in the SA Investor of the Year awards last year and what an honor and privilege it was to be on that stage actually kind of representing one of my deals. There's my beautiful fiancee on the left hand side and that evening was so amazing to be part of that and rubbing shoulders with some investors from all across the country. Now without further ado, let's get started. Let's have a look at a few of the topics we'll be covering. Over the next 20 minutes or so, so steps to achieve success, seven golden rules of property investing, key power team members. There's one thing I've learned in property, it is a team sport, ladies and gents. If you didn't know that, running the numbers, how to run the numbers correctly and then also area research. Now there are three different types of people in the world. The people that haven't invested but they wish they had, you know, you might know a few of those people that said, oh, wish I invested back in 2008 when property prices were really low. You know, but they never did. Then you get the people that say, well, they haven't invested and actually lost money. And most of the time it's because they didn't have the right knowledge or there are team around them to actually make the right decisions when buying property. And then you get the handful of people, the professional investors that actually make money investing in property. And that's why the property academy was started, ladies and gents, to actually teach people how to do that. So let's have a look at the very first property that I ever bought before I had the knowledge about how to invest in property the right way. So the listing price was 570,000 Rand. I managed to pick it up for 530,000 Rand. Now you might be sitting there thinking, well, this is a great deal, right 40,000 Rand off of the asking price. I mean, I'd invest in that deal and that's exactly what I said. But I didn't know how to do the area research or run the numbers. So have a look at this. And there's the numbers. The rental income was 5,400, which was great because it was covering my bond demands. I took 100% bond out. But once you look at what the levies cost, the rates and taxes, the management fee, and also maintenance on the property and voids, which is essentially factoring in some money that we put away, just in case a tenant doesn't pay. I was negative cash flowing about 3,000 Rand. Every single month. Now, I thought that this is the way that people invest. And I've seen this. Most people do invest this way, listen, gents, but that's why they can usually only buy one or two or three properties because they're losing money and their affordability is going down in the bank's eyes with each purchase that they make. Now, this is not the way I invest now. After this transaction or this deal, I decided to really knuckle down and get myself educated in property investing. Now, there's our little man, and this is most investors when they purchase their first property. It might be the house that you live in. They might get to number two or number three even and then they run out of affordability. And the bank says, no more financing for you, Mr. Investor. You don't have the affordability to buy more property because every single property you buy is negative cash flowing. It's taking money out of your pocket. Now, at the property academy, we can teach you how to invest in positive cash flowing properties from day one. And that's how we build our portfolio because think about it, ladies and gents. If you're buying properties that put money in your pocket from day one, your affordability will be unlimited as you go forward and buy more and more of these properties. And that's how we grow a great portfolio that can get you to financial freedom. So let's have a look at this deal that I concluded about two or three weeks ago. It's a small flip that I did in Port Elizabeth and just look at those pictures. Now, if your first time home buyer and you walk into this property, you'd probably turn around and walk straight out because it was dirty, stinky, smelly. Just no geyser. The floors were rotten. It was just an absolute mess. But guess what, ladies and gents, when I walked in here, I said to myself, Cha-ching, I can make money here. I can add value here. And because it's in such a bad condition, I can use that in my favor to negotiate the price down. Okay, now this was an off market deal. Most of our deals are off market deals that no one even knows about. And there's various strategies we use to actually get those distressed sellers phoning us. So let's have a look at a few of the before and after photos. We retyled the bathroom. We sanded the floors and varnished them. Just look at that amazing difference. It actually didn't even cost too much to do that. We tiled the floors. We tiled Africa as one of our partners. Provided me with a great deal on the tiles. So let's have a look at the numbers, which is the most important part. The purchase price was 100,000 Rand. Renovations cost me 35,000. Attorney fees, 10,000. Holding cost three, two, which is essentially levies and rates and taxes from the day that the property registers into my name. I've obviously got to pay that. And that's what I had to cover before it was sold. Then investor interest. I mentioned a little bit earlier that I do all my deals with other people's money. What Robert Kiyosaki teaches, use other people's money to do deals. So an investor in our network was willing to invest 170,000 Rand in this deal with me and I pay the investor 18%. Now ladies and gentlemen, think about that. What are you getting currently in the bank interest on your funds? Right about 4%, 5%, maybe 6%. So 18% this investor got on the funds without actually having anything to do with the deal. She just put the money in. I did the negotiating. I did the renovations. I did the selling. And she just gets paid with 30,600 Rand, which is a massive change. Now personal capital, zero. I put absolutely none of my own money into this deal. Now this might be the kind of deal that sparks your interest. Maybe you're sitting there with no money and you're saying, well, I can invest in property. I don't have any money. And this is one of the ways you can do it. The sales price was 280,000. And I made a profit of just over 100,000 Rand. Now, ladies and gentlemen, this is not rocket science. It's not as easy as it seems. But if you have the right knowledge, you can also be doing deals like this. Now, what are the seven golden rules of property? You make money when you buy. As you saw in that deal, the purchase process is probably the most important starting point that you can start with property. Buy at the right price and your profit is locked in. Two exit strategies. Now, if your flip doesn't work, you need to still be able to perhaps rent out that property. So always have two exit strategies to mitigate your risk. Buy for qualified demand. Now, if I went and did that flip in an area where there aren't any buyers looking to buy property, really, then that wouldn't have worked. So a bought in an area where there's a hard demand for buying property. Follow the money. If you see an area where people are starting to renovate their properties, that's typically a good sign that that area is on the up. Become a money raiser. Now, with our network all across the country, we have got angel investors everywhere always looking for good deals. So my advice is just to learn how to find those really, really good off market deals. Be safe, be legal. All our contracts are done through attorneys. So you always want to be on the legal side of the law. So take massive action is number seven, which is probably the most important. Because if you don't take action, it's not easy. So you need to be taking action every single day to get these kind of deals. So this is the team that you need around you. As I mentioned earlier, this is a team sport. So you need your education. That's the first thing. And most important thing of all, you need the right education and knowledge before you can do these type of property deals. You need the right network. And that's what we provide at the SA property investors network, a network of investors and like modern people all across the country and every city of South Africa. You perhaps need a property coach to guide you. Agents, a builder, attorney, town planners, and an architect. So let's look at this in a bit more detail. When I was just starting out and maybe you've never even bought a property, I thought that I only needed an attorney, a conveyancer. Right? Because everyone knows that. I soon found out that I needed a big team around me to support me because you're never going to know everything about property, ladies and gentlemen. I think that's the big thing. It doesn't matter how long you've been in the game for, you're always, always learning more. So rather leverage a team that has more knowledge than you. Now, I've got a property coach. I needed a network. That's what I've got now. We needed sourcing agents. We've got sourcing agents all across the country that actually bring us deals that are already vetted deals, which is great. Property mastermind. I'm part of a property mastermind of like-minded investors sharing their knowledge and sharing their deals once a month, which is really valuable. A property accountant. Now, not just any accountant, a specific accountant that actually knows about tax implications in property transactions. A structure specialist. Now, you don't want to be buying all your properties in your personal name. You might want to sit with a specialist and get advice on what is best suited for your situation. Are you buying in a trust or a company or perhaps a company where the shares are owned by a trust or maybe one or two properties in your personal name? So always sit with a professional on that side. Rental insurance. If you've got rental properties, ladies and gents, you might not realize this. There are companies out there that will actually guarantee your rent for up to three months if tenants don't pay. Private finance investors or we call them angel investors to invest in your great deals and then also an eviction attorney. Now, what we have for you today and over this weekend, ladies and gents, is a free online course called the Accelerator Course, which is essentially building the foundation of knowledge for you to become a professional property investor. Just click on the link below and you can join this course free of charge. Now, let's have a look at what this course entails. Well, setting goals and strategies. It's so important to know where to start, to set your goal and then use the strategy that can get you to that goal the quickest. Is it flipping? Is it bar to let? Is it student accommodation? You know, what area are you looking at? And that's what we're going to teach you. Finding deals. How to find the right deals, the off market deals where we can get below market value off as accepted. Negotiating. One of the most important tools in property investing is being able to negotiate with a seller or with an agent. Creative financing, my favorite. Doing creative deals such as assisted sales or installment sales to get your deals over the line. And then networking. How do you connect with like-minded people all across South Africa and actually learn from them? Now, it is 100% free. Don't need a credit card. Just click on the link and you can join us for a free accelerator course. Now, let's have a look at the numbers, ladies and gentlemen. Please don't run away. I know most people get very scared when you mention this, but it is actually very, very basic. So let's have a look at a cash flow example. Let's just say that we've got a property and the rental income is $12,500. We then subtract our expenses. Now, what would that entail? It's your management. We're just working on 7% plus VAT because that's typically what an agency or letting agency mark charge you to manage your property. Building insurance 350. Maintenance of 1,250. We always as professional property investors want to be putting some money away because if there's one thing I've learned some property, there's always going to be maintenance that you don't foresee. So put money away for that void. If your tenants perhaps don't pay, we also want a little kitty for that. Bond repayment of $6,000. Water electricity is zero in this case. We will be passing those costs onto the tenants. Rates and taxes are $550 and we make a net cash flow or profit of $2,444. And now that is just an example, but these are the kind of deals we invest in. So let's have a look at two very important formulas I'd like you to know before you start on your journey. That is gross yield and return on investment. I'm sure you've heard at least of return on investment. So gross yield is your annual gross rent divided by your purchase price. So quite simple. Return on investment is your annual net profit divided by the capital that you've personally put into a deal. So let's have a closer look at these two formulas. Your gross yield and this is just an example. Let's say your monthly rental is $10,000 a month and remember this is before expenses. Your annual rent will be $10,000 times $12,000 obviously and that's $120,000. Now remember in the previous slide, what is gross yield? Is your annual gross rent divided by the purchase price? So let's have a look at that. So annual gross rental is $120,000. And in this example, we're going to say that the purchase price is $800,000 and that gives us a gross yield of 15%. Now, ladies and gentlemen, it's very important to remember gross yield is only an indicator. We do not make a purchase decision on gross yield. That's just telling us that we must actually do more due diligence on this specific deal. Okay, let's have a look at return on investment. Now, there's the previous example. We had two slides back. Our profit was $2,444 a month. How do you work up the return on investment? Well, it's your annual net profit divided by the personal capital that you've put into the deal to purchase that property. Let's have a look at what that looks like. It's your annual net profit is your $2,444 times 12. We'll give us your $29,328 annually. That's off the expenses. Remember, divided by $100,000. So let's just say that you have to put in $100,000 to cover all the attorney fees, perhaps a small deposit on this property. And you then get 29.33% as your return on investment, which is a great return on investment. And in the bank, you might be getting 5%. So these are the kind of deals that we certainly want to do. Another important topic is area research. Do you really want to know how to do area research the right way and not just rely on people's opinions? We look at facts, ladies and gents. That's what we want to use. Now, we do rely on estate agents. Good estate agents can really make or break a property investment. And they're very knowledgeable about certain areas. And we make use of them in our power team. Private property. Now, we do farm deals on private property. You just need to know what to look for and how to negotiate those deals. Google Maps, we use Google Maps, Street View, Satellite View to actually look at properties without going to view all of them. We can just do our high level or desktop research before we make it off on a property. And then Lightstone and TPM. Now, TPM, I'm not sure if all of you have heard of Lightstone and TPM, but they are absolutely essential tools if you want to be a professional property investor. Now, at the South African Property Investors Network, we've actually got memberships where you get access to Lightstone and TPM. Now, Lightstone would typically show you the historical sales in an area. And once again, I said we're working on facts. So the factual sales is what we look at to work out the market value. Now, TPM is great because they provide us with all the rental stats for a specific area. What is the annual, every salary is in that area? How many people actually pay their rent on time? So these tools are really, really important if you want to take the next step in your journey. Now, what are your next steps to success, ladies and gents? Now, I've worked out a seven-step success plan. Okay, so what is your plan? That's the first thing that we want to know is what do you want to achieve? What strategy do you want to use to actually achieve your goals? Okay, as I said, identify your strategy. Is it flipping? Is it Bartolet? Is it student accommodation? We really want to zone in on one specific strategy when you're starting out. Choose one area. Now, what I often see newbie investors doing is they look at a whole city and they just don't know what to do or where to go. So focus on an area, get to know that area really, really well. And that's how you can start doing really good deals. We work out marketing plans. You know, how do we get those off-market deals? How do we get people phoning us and bringing us deals? Well, there is some marketing involved. Lead generation, we want a constant flow of deals coming in, whether it's from estate agents, sourcing agents, direct to seller deals. How do we generate those leads that come in on a consistent basis? And then last the deal. Now, that does include your area research and your numbers. We really want to make sure that we're making the right buying decision on a specific property. And then submitting your offer. You know, the offer to purchase document is probably the most important tool as a professional investor that we use. And we've got certain clauses that we include in the offer to purchase document to protect ourselves as investors. And once again, this is where our power team comes in, the attorneys come in and really help us to mitigate our risk in the offer to purchase when submitting an offer. Now, ladies and gentlemen, once again, we've got the free online course, the accelerator course this weekend. I'm super excited. If you're just starting out, you really need to get on this. Just click on the link below. And you can have access. And it is 100% free of charge. That's about goal setting and strategies, finding the right deals, negotiating, creative financing, networking. And as I mentioned, no credit card needed. It's free of charge. Now, ladies and gentlemen, thank you so much for your time. I really hope that you enjoy this weekend with us. Please join us in the property academy booth or the SA property investors network booth. If you've got any questions, if you want to know just where to start and how to get into property and you want to educate yourself, please come chat with us. We'll be here the whole day today and tomorrow. So just really excited to meet you and a good luck with your property investing journey.