 Welcome, property fans. Welcome to the masterclass exclusive for the virtual property show hosted by the Property Hack.Club. My name is Carlo Mariani. I'm the chief hacker of Property.Club, founder of the Property Court and local property investor and educator. And today you're invited to this masterclass. What to do and how to choose the right investment area for you is avoid expensive mistakes with these five hacks. And we're going to be very practical about what you should do and what you shouldn't do to succeed in this market in South Africa. Today, tomorrow, in the next 20 years, I'm going to give you some priceless pointers on how to choose the right investment area. And before I do that, just in case you're wondering, where is this guy coming from? Well, I came in South Africa in 1999 thinking I was going to stay here for six months. And then 21 years later, here is what I've got to show you. Meet my beautiful family. What I think is beautiful, beautiful for me. Meet my wife, Zincle, after 11 years of beautiful marriage and meet our son, Daba. And meet my assets here. You know, you got assets on this side, the most important assets that we have in our life, our families. And on the right side, meet my other assets, my South African properties. Here are some examples of some properties that are on. And I want to show you these pictures because it's all about ordinary properties for ordinary South Africans. So, you know, if you only go away from this masterclass saying, I got to focus on not on fancy things, not on complicated things, focus on taking the profits without the risk by investing in ordinary properties for ordinary South Africans in the right areas. And that's exactly what we here for, you know, as a property hack club. I want to share with you what is the definition of a property hacker. You know, a property hacker is first and foremost somebody that wants to take a legal shortcut, a legal shortcut to achieve the cash flow and the wealth, you know, that you can generate for you yourself, your family from investing in property. The most important on a practical level, you know, a hacker is somebody that always buys the right property in the right area at the right price without needing her, without needing her money, okay, without needing her money, you know, inside the property hot actual club. It's all about how you do property using your knowledge, using the tools, using the collaboration, whether you've got your own money, or you don't have your money, it doesn't matter. I started property in South Africa 2003 without any of my money, without any network, and I wish I'd done it a little bit differently. And so, how do you become a property hacker? Well, you know, first and foremost, I think we gotta basically pay attention, you know, to what Patrice is sharing with us, which is education is at the heart of achieving your dreams. You know, if you think that property is easy, think again, property is easier, but it's not easy. It's not something that you could do or should do simply because you've heard all these people making great money with property, because the easy money of South Africa, I believe, is behind us. But is the money finished? No, not at all. Actually, there are even more opportunities, but you gotta simply know what you're doing. And obviously, education is the heart of achieving your dreams. And one thing that you must start with is start with by avoiding expensive mistakes. You probably heard Warren Buffett, the most famous investor of all time, saying rule number one, don't lose money, rule number two is don't forget about rule number one. So, you know, as I sort of like have supported thousands of growing and aspiring property investors here in South Africa over the last few years, I've seen one pattern that emerges very often, which is a lot of South Africans just love the idea of buying investment properties off-plan. You know, when I say off-plan means new residential development. And reality is that that strategy as an investment strategy is largely an obsolete strategy. It's been obsolete from as late as 2006. It hasn't been working for a long time. Now, if I'm shocking you, well, not only I want to shock you, but I want to share with you some simple basis, you know, of why I share what I share. And it's not only because the University of Property, Hard Knocks, that I've been involved with, you know, I am a property practitioner, you know, I spend more than 50% of my time investing locally and internationally. I still have the bulk of my portfolio here in South Africa. But let me tell you a story. In 2005, I bought off-plan in the beautiful city of Petersburg. And 10 years later, I had to resell the property, I bought it for $300,000, I resold it for $300,000, 10 years later. Why? Because I bought the wrong property in the wrong area at the wrong price. So don't believe those people that say, you know, you just buy property and wait, you'll never go wrong. No, that is just absolutely nonsense. I need to tell you it's absolutely nonsense. So, you know, if you think that I've achieved a lot of success, yes, I've achieved a lot of success. But I've also paid very expensive fees to the University of Property, Hard Knocks. Let me share with you three reasons, out of many reasons that I will share more in detail inside the Property Hangout Club with you, why you should be exercising serious caution when buying properties off-plan in this market. Number one, it's impossible to add value overnight, like light touch, refurb, subdivisions. Why? Because those big developers have got teams of architects, engineers, builders, quantity surveyors, town planners, you name it. They are designed to bring an optimized product, which basically means that once you're on the bus, all you can do is hope that the bus is going to go in the right direction. That's a very passive strategy, there's a dangerous strategy, because you're not able to add value beyond what the market is doing. Number two, like the rental premium you get when you rent out these units in the market, because I'm working for investors, you know, I'm helping investors and investors, you know, they're not speculators, they make money by renting these units over an extended period of time to good tenants they pay in full on time all the time. And you're getting a premium, but this premium is small and diminishes over time. But the purchase premium that you're actually paying now, you know, in 2020 to buy those units as opposed to buy similar units in the same area, you know, units that are old, 5, 10, 20, 50 years old is at all time high since that get has been measured in South Africa. So it's almost like you're going to Zara, you want to go to Zara when the sale is on or when it's full rise? Well, you decide another answer. So that's basically number one mistake you should avoid. Number two, you want to choose the right investment area, right? You want to choose an investment area that is going to do great for you. And my next hack for you from the property hack doc club is all about affordability. You know, can people afford those properties? That's why I'm insisting. And I want to really sort of take this one with you. I hope you got pen and paper. And if you got pen and paper, write it down. The best strategy is going to continue to work in South Africa is ordering properties for ordinary South Africans. And, you know, banks of Africa recently released data to say that the average take home pay of South Africans at this point in time is just shy of 16,000 rend that gives you affordability for about 750,000 rend. So that is the sweet spot for investors because that's where supply and demand is skewed, you know, where you've got a lot of demand and relatively speaking, not a lot of supply. So that's another very important sort of hack that I've got for you. The third one is mass urbanization. Okay. So what I mean by mass urbanization that everybody's flocking to the same places. Okay. Everybody's flocking to the same places. But, you know, let me tell you one thing. Let me tell you that this mass urbanization is actually not homogeneous. And let me show you some example. Okay. Let me show you some example because how 10, you know, I'm streaming like today from Stanton, you know, like I spent 15 or my 20 years in South Africa in how 10, I call myself like a son of the gold. And in how 10 in 1996, 7.3 million people 2016, 13.4 million people and counting plus 83%. And has how 10 grown in size by 83%. No, he hasn't grown in size at all. Not only that, but everybody wants to flock to very few places in how 10. Okay. Now, you know, with all due respect and lots of love, if anybody's connected working and living in orange farm, that's great. But that's probably not where most of the people that economically active want to invest in this funding time. But here's the difference. You know, if you had invested in Northwest, look at what's happening in Northwest, we barely add any kind of population growth. Why? Because Northwest is, you know, to a large extent and still is very dependent on mining and industry. There isn't a secular decline. So if you've been in the Northwest, you know, you haven't had the increasing supply that has been doing really great for your property investment. Is this going to change anytime soon? No, it's not going to change anytime soon. In actual fact, it's going to accelerate. So where do you want to invest? You want to invest in the Northwest or do you want to invest in Clarkstop? Look at this Clarkstop. You know, this is an investment done by, you know, one of the methods of the property head of clubs, before she decided that enough is enough, I need to invest in property the right way. I can't invest, I can't invest just on a four, three, two, one rule. I spend four hours on a portal. You know, I go out to three sort of show days, three weekends, then I make two offers and I'll buy one property. Because that's what might happen to you. Bought a property for 395,000 rents in 2013, 2020, the property price is exactly the same. Not only that, the rental is 4,200 rents, means every month this property is being subsidized. Is this a good or a bad investment? This is a shockingly bad investment, okay? That goes to talk to the people that says buy property and wait. No. But look at one of the things that I have done, once I've gone through the University of Property Hard Knocks, was quite simple. But in 2010, you know, a three-bed, one-bust, for 125,000 rents in Johannesburg CBD, you know, the heart of the sort of like financial quality and economic power hub of South Africa and Africa. You know, surprise, surprise, not only the market value of the property had gone up to 215,000, but most importantly, and your focus on cash flow, if you want to take a risk out of your property investment, by now that property is generating 4,400 rents in rental every month at a 99.9% rental collection ratio. Is that a good or a bad investment? Well, that is a great investment. That's how you make money with property by investing in the right property, in the right area, at the right price, boom. So, you want to get another few hacks on, you know, we've only got like 20 minutes from, you know, the virtual property show. So if you enjoy what you're watching, you know, don't forget to visit us at our virtual stand, the Property Hackouts Club, and I'll tell you more about why you should visit us in terms of free knowledge, special offers, just, you know, towards the end of this masterclass. But let's stay tuned on the masterclass. Follow the big money. Okay, follow the big money is one of the most powerful pieces of advice I can give you to choose an investment area that is going to do not just well, it's going to do great for you. So what does that mean in practical terms? Well, let us remind ourselves, there are three types of money. There's the public money, the government money, the municipal money, the provincial money, you know, the development banks money, and there is private money. Okay, and those are big money. But the third one, which is the most incredible one, is when the public money meets the private money, and they go together, you know, to develop, you know, like areas. Okay, so, you know, some people call it triple P public private partnerships. But when the public money and the private money comes together, all you got to do is slip stream this money. You must, there's no need for you to reinvent the wheel. All you got to do is slip stream the money. Let me give you an example. This is a wonderful example is the example, Johannesburg CBD still today in 2010, even more, still today is a wonderful example of how public and private money have come together, are continuing to come together, will continue to come together to generate investment opportunities for people like myself, yourself or the South Africans, you don't need the million, the billion rents. And that's as simple as that. Right. So by the way, you know, like one, you know, for those of you that are going to join us at the virtual stand, I will be there. You can interact with me. I look forward to answer all your questions. And three of you, three of you are going to win a one-on-one coaching session with me, with me personally via Zoom or via whatever online platform, each worth 2000 rent. I'm going to sit with you. I'm going to understand your circumstances. I'm going to advise you on your strategy and how to craft and implement the strategy. So don't mess it. You know, like it's the time for generosity at the virtual property show. So I will see you then. And you know, one more, one more piece of advice is eat your property sandwich. Eat your property sandwich. So what do I mean by eat your property sandwich? I'm going to give you, and I want to just sort of like do one quick thing here. If I can, if I can do that, just go back on full screen. A property sandwich is a strategy to be ahead of the curve, to be ahead of other investors. So for example, you know, when you've got two sides of the sandwich and there's the meat or the cheese in the middle of the sandwich, you want to be the meat in the sandwich in which way. Let me give you an example. So when I came here in 99, I remember driving from Johannesburg to Pretoria, and that was very little, you know, very little. And then there was something called Midrend. Midrend is a perfect example of a mega sandwich. Okay. So, you know, when there are two big areas of growth, two big economic nodes, what sits in the middle very often becomes a massive, a massive opportunity. You can do it on a macro level. You can do it on a micro level. So for example, for those of you that hang around Senton, you've got Senton, you've got Rosebank, and in between there's a little area called Ilovo. Ilovo was one of the first places where I invested in 2003 because you had some really old flats, big, spacious flats, you can play soccer in them. And you can see now Ilovo has actually dramatically picked up its value and its appeal. You can even do it at a server level. Sometimes there's two roads, and there's a road in the middle that is not great, great yet. That's another opportunity. So eat your property sandwich. That's a great opportunity for you to choose the right investment area. And if you basically, you know, want to finish today, have the pandemic crisis, have the profits of doom. I've been here since 1999. I remember coming here and people were saying, you know, South Africa is coming to an end. The property market is too expensive. And all I know is that history doesn't repeat itself, but it rhymes. As all I know, big crisis, big opportunity. Look at this. The last 55 years, every time property prices have gone down, look at what happened to property prices. They've gone back up. They've gone back up very fast. They've gone back up very steep. And you know, a property price is going down. Probably maybe, you know, property market has been incredibly resilient. It takes more than Corona to kill the property market. But nothing happens. Nothing happens unless you take action, unless you invest in yourself, unless you build the right local knowledge enough, you know, with Americans coming here that don't know what works or what doesn't work. And, you know, let me tell you one, I'm going to give you one final example. I fast-tracked my property success using the 2008-2009 crisis very quickly. Just, you know, this is one of the pictures I showed you earlier on, where I showed you my assets. Here it is. Bought a sectional title incentive in 2008. Great financial crisis. Everybody was ducking and diving about this property for 430,000 Rens. And by 2016, because of both the right property and the right price in the right area, it went up in value to 785,000 Rens. You know what I did? I went back to the banks and at that point in time, the banks were advancing 100% loan on the properties. So now I've got cash in the banks for 453,000 Rens, 0% tax legally. And that's the kind of stuff you want to do. And if you are committed to turn this great crisis into the biggest opportunity of your life, if you want to get access to some of these deals, learn how to go and fish, because we do not sell properties. We do not market properties directly and directly. We are a pure education group. It is going to give you the knowledge, the tools, the collaboration platforms, the fast-track team. Come and join us. Add the booth, add the stand, so we can talk to you about more. And what I'm going to say, meet me there. I'm going to give you free knowledge. I've got a free video course on options, how to avoid expensive mistakes at auction and where the opportunities are with auctions that I'm going to give to everybody who's going to visit us for free. And plus, you've got a crazy offer to join the Property Headdress Club. And you've got a chance to win one or three coaching sessions, because last but not least, you can have property investment, or you can have excuses, but you cannot have both. And I look forward to answer all your questions live. Ciao from Carlo, founder of the Property Coach, chief hacker of the Property Headdress Club. Take action, because nothing works unless you do. Ciao.