 Welcome to week number six of the 50 day property challenge brought to you by ENBF property academy and private property. Today we are wrapping up week number six. And because last week we spoke at length with Jared, and we heard all about his endeavors and the fact that he has now bought his first property. We've decided that today we are going to focus on math out. So this week we are going to just have a look at how she started up and then we will talk to her about her journey thus far. Good day everybody. I am Nigel Adrianse the CEO and founder of the Enterprise Development Property Fund as well as the EDPF property academy. Today we are here with Matt L. Most of you will know her from the 4am show on Metro FM. Today we start our 50 day challenge with her and many other celebrities that you will get to know over a period of 50 days. Hence the 50 day challenge. What is the 50 day challenge about? The 50 day challenge is where we as the Enterprise Development Property Fund challenge our celebrities to within 50 days purchase their first property. How are they going to do that? We are going to give them all the tools that they require from legal support to financial support to architectural and other support that they require in order to build their property portfolio. Today they start their journey with us and on this journey which in total will take them three years they will build their property portfolio. But within the 50 days they are challenged to buy at least one property. So Matt L, let's get started. Tell us why it is that you want to invest in property. Thank you so much Nigel for such a kind introduction. Sir, one thing I certainly believe is that school teaches us a lot on how to save. But we're not necessarily taught any critical skills on how to grow capital and how to necessarily build what is it called? Generational one, right? That's the word I was looking for. And for a person like me who's a radio presenter, who's a DJ, do a lot of things, MC, TV. There's a lot of cash flow that comes in but that money can go as fast as it comes in and hence it's quite important to invest it in something that you know is long term. The property space I definitely believe is a space where if done correctly, because you could invest wrongly, but if done correctly you could potentially have your money locked in a space where you know it will grow over a long term. Fantastic. So tell us, have you already bought a property? Are you already invested in a property? So fortunately, yes I am. I do have two properties that I had acquired whilst I was in the corporate space. Not sure yet if it was the best move because I was doing it with quite limited knowledge. However, when we went through a space of lockdown, I was quite grateful that I did that because when there were no gigs, no events, that rental income that I was receiving is what actually kept me afloat. So I'm quite passionate about creatives and artists actually exploring other avenues of where to keep them and invest it. That is amazing and I mean as we know, or some of us know anyway, within the creative space people think yes you're famous so you obviously have a lot of money. Tell us what that experience has been like for you and you know when people look at you and go you must have a lot of money. To be honest, it's not all gold that glitters. I think it takes long term planning as well in order for you as a creative to actually make a lot of money. But in the beginning, it's really not that much. It's one gig here and there. Sometimes that gig you're just breaking even it's just enough money to get you to the gig and back just enough money to pay your team. So not so much in the beginning, but of course if you're passionate and you consistent with whatever you're doing, eventually you'll brand with all the presents and you'll attract other brands into your space. And then over a long term period you will start to make good money. Okay, so I'm going to ask you a question that we did not tell you beforehand what we're going to ask you. And really that's because you've now told me you've already purchased two properties. So because you've already purchased two properties and the EDPF Academy is more about helping people who know nothing about property to get into the space. Why have you chosen the EDPF Academy then to be part of this program? The reason I say that is because I still believe that there isn't a lot of academies that focus specifically on developing people's property knowledge. When I was doing that, I was doing it blindly. It was something I was trying out and hence I specifically said investing in property is a good idea if done correctly. There's a lot of people who find themselves buying property and then they're stuck and it becomes a loss and more of a liability whereas property is an asset if done correctly. So one thing I know for sure, especially with the EDPF is the fact that you impart knowledge on people. You partner people with stakeholders who also impart knowledge on them like accountants, like, you know, lawyers, all those things that you obviously need to acquire property because even in the property journey you're not alone. When you get to the bank, how do you ask for credit? What do I need to have the credit? Those things were not taught and I know that the Academy will definitely punish those. Fantastic. I'm so glad that you brought that up because within the Academy we give you all the tools that you require, whether it be like you say lawyers and accountants, architects, quantity surveyors, town planners, engineers, as well as support in terms of how to raise capital. So one of the big things that normally is a problem in terms of trying to build a property portfolio for most people in South Africa or even in the world is how do I raise capital and where do I find the money? So let me ask you this question then. When you bought your first two properties, how did you go about raising the capital to purchase those two properties knowing that in South Africa most people can't even buy one property? So first of all, it starts with obviously having a good credit score and with that good credit score I was then able to approach a number of banks. That was the route I had. I did not have cash on hand to be able to do this. So I had to acquire some form of credit in order to be able to buy the property. But this is what makes it more interesting for artists and creators. Sometimes you don't have that pay slip that you can bring to the bank. So how then do you raise the capital? So I think it's going to be quite interesting now that I've transitioned out of a corporate space with a lot of stability and a lot of knowing for sure for the next six months I have a salary where it's in the creative space, three months you're great, two months you're not, another five months you're great. So it's just also how do you still then secure that capital with such a volatile industry? Which is fantastic. I mean that is one of the things that we in the property industry love talking about, using other people's money. And that is one of the things that we can be teaching you over this 50 day journey. So just to reiterate the 50 day journey we're going to help Matt to build a property portfolio more than the two she just she already has acquired. And using all the tools at the disposal as well as all the tools that we as EDBF will help. Your first step into this new environment, what is the value of property that you're looking to invest in to start with? I think looking at the property market, especially in terms of coming out of a lockdown and all these things, I'm not looking to go anywhere near a million. To be quite honest, my ballpark is between 450 and 650. But I'm more centered towards the 450. The only reason I'm saying 450 to 650 is that if the value of the property is 450, then I'm just adding on those extra costs that I still need for transfers and if any renovation potentially needed just factoring that as well. But the property price I'm really putting forth is 450. Fantastic. Listen, we embarking on this journey, but you've already learned quite a bit because of your experience. So that'll help you a great deal to reach your goal much quicker than anybody else who starts from scratch. So the next question that I want to ask you, property is not a short term journey. Property is a long term investment. And a lot of people think properties get rich quick scheme. No, it's not. It is purely a long term investment. So let's say over the next 10 or 20 years, what is the size of the portfolio you're looking to invest in? Okay, so if I'm going to be part of a 50 day challenge and am well capable of acquiring a property in 50 days, then that would then mean I could potentially at least hire one property per year, right? Yeah. Two per year in fact. One maybe every six months. I'd prefer that, maybe even 10. Maybe even 10, you know, factoring the fact that we have 365 days. So if I'm going to learn how to do this in 50 days, then I'm definitely going to use that 50 days aggressively moving forward. Fantastic. So if I was to give it a figure, let's say a million like 10 years, definitely let's say 10 million. Fantastic. I love that. I absolutely love that. So guys, we would like you to follow us on this journey. We would like you to use the methodologies that we are going to showcase over these next 50 days. And we'd like you as the public to also start investing in property and using these methodologies to become property investors yourselves. As we've spoken, we can start small, which we'd prefer for you to do, and then grow your portfolio over 10 to 20 years. And you could very easily build a portfolio of 10, 20, even 30 or 50 million Rian, using other people's money if you don't have your own. So Matt Al, are you ready for this journey? I am so ready. I am so excited and I can't wait to start. Excellent. So guys, let's go on this 50 day journey together. Let's join Matt Al. Let's join the rest of the team and the EDPF Property Academy as we go forth on this 50 day journey. Thank you very much. Today we have Matt Al. Now to everybody as Matt Al, Tabaleng Matela. She is with Metro SM as most of you know. Unfortunately, Jarron this week is extremely busy. She has got gigs from here to the Karoo. So he unfortunately has not been able to join us this week, but it's also good because today we actually just catching up with Matt Al to understand where she's at with her process in terms of the portfolio that she wants to build. And last week when we chatted with her, we spoke about the fact that she's now wanting to purchase a third property, which I didn't say to her when she asked me about how to raise the capital for it. So what I said to her the best option then is to go with the future rental product that Apsa has. So we've invited Adi, Adrian Yonus, he's known as Adi. We've invited him to come and chat with us today and we'll have a conversation around Matt Al's purchase of a third property and he'll give us some guidance in terms of what the best structure is and how to access their product called future rental income product. And whether that product is actually the best product for her, maybe it's not, maybe I was wrong, but Adi will let us know. Okay guys, so let's have that conversation. Matt Al, can you give us a brief understanding of where you are at, the two properties that you do have just to sort of what the values of those properties are, what the rental incomes are you currently getting and then what you are looking for in your third property. Okay, hi Nigel, hi Adi. In terms of the current portfolio I have, it's two rental properties in Pretoria, one is in Nicolnac, the other one is in Arcadia. I think the idea behind both of them was student accommodation because they both situated in student areas. The one is walking distance from UNICEF, the other one is walking distance from Boston Media House in Pretoria. The value of the two, both below half a million, one is just north of 440 I think, but its market value is actually 600. The other one I think, yeah, it's also around there. And so I think because I've already had quite a good, if I should put it positive, what is it, what's the word I'm looking for? The cash flow was already net positive. In terms of the rental that I currently receive does cover both the levies and the bond fees. In terms of electricity I did install prepaid, so the tenants sought out the prepaid, the electricity on their own. So far it's been a formula that's been working pretty well. Both properties, the one is a three bedroom and the other one is a two and a half, also technically a three bedroom. So because that has worked for me, I had said also with the third property I wasn't looking to go anywhere above half a million yet again. Also considering the market and where we come from with the lockdown and everything. So my ballpark is between 400 and 600,000 maximum but ID440 and I have narrowed down my search already within the Pretoria area around Arcadia, and I have found a good, I think a good eight, two and a half bedrooms, one or two of them have been renovated into three, four bedrooms. So already from a rental perspective they are cash flow positive. So it's just a matter of now because I'm a creative, you know, the cash flow is always up and down one month is like a lot of money the next month is like just okay it's you know it fluctuates. So it's just how do I find a way to find this next property because when I had purchased the first two. My life was a very different setup I was working in corporate. You know, I wasn't working as an independent contractor as I am now. So it's also just finding the best financial solution for me. All right, so Matt out if I if I understood you correctly the value of the two properties roughly then it's about 1.2 your bonds are about 80 somewhere around the end total. So you've got equity of just over about 300,000 in those two properties there. Okay, cool. All right, your recommendations, where do you think we should go from here. Oh, the other thing, Matt, are you all practicing your own name or is it in a Pty trust? So the first two are in my own name but with the third I want them in my Pty. All right. Okay, cool. Okay, cool. All right, thank you. Thank you Nigel. Thanks, Matt. Nice meeting you. Super. Okay, so. So how it works is we, we, when we do the affordability calculation, we're going to obviously look at your you're talking about independent contracts and what correct. So you sign a contract with a specific company or firm and then they pay you a retain every month. Am I right? Yes. Okay. So and that's obviously paid into your bank account. Yes. Okay. And this contract is it, is it a yearly contract or is it, or is it a five year contract? How does it work? It's a yearly contract. And over and above that there's a lot of gigs that we do as DJs and stuff. So we just invoice for that as well. Okay, so what happens is what happens is we look at the last six months. So you've got a fixed contract, we will require a fixed contract. And then obviously we're going to look at all the invoice invoices you receive. Obviously you've got the fixed contract income that you receive and then additional invoices that's fine. So what can really need financials? How does your tax work? Do you do a provisional tax or how do they take the tax off those invoices? They take the tax off the invoice already. Okay, so that's straightforward. So let me work on the last six months. What we do is we take the highest month and the lowest month and we divide the rest out of four. So if you've got two months that you had a high income, that'll help your cash flow in terms of how they're going to look at the affordability. In terms of the student accommodation, that rental, is it also just monthly that you receive the rental? Yes, it's every month. I've had the one property for three years. Okay. Four years, actually the other one for three. Do you have 12 months contracts with those tenants? Yes, Lisa. That's wonderful. So what we do is we're going to need those contracts and what we do is we look at 80% of the lease income. So if you've got the rental, the 12 months rental contracts, obviously it's also paid into your bank account. We will then look at the 80% of that rental as a sustainable income. So then what we do is with you buying this third property, we're going to do what they call a TPN report. Normally what we do is when we submit the application, if there's enough cash flow in your contract income and the lease income, we might not even need the future rental income, but that's a booster. So then we can use 80% of, we can also then use that as a future rental income to boost the affordability. So in terms of you buying in your, in the PTY, that's a new PTY you want to create a market rate. Yes. So what happens there is that's a brand new PTY. So the affordability will purely be on US director. I gather that you'll be the only director, am I right? And you'll be the 100% shareholder. Yes. Okay, so then if you then buy that property, the bank will most likely only look at 80% of the purchase price. So let's say the property is 500,000, we'll most likely look at 400,000, but we will apply maximum. I always apply 500% loan application. And then you know, we can just see what the bank will offer us. So then, then, so in that case, you must just remember going forward in that PTY, you'll have to then keep financials because you're going to start getting rental income on that PTY. And eventually when your portfolio grows, we're going to look at your financials of the PTY and your personal income and expenses as being the director of the company. Because remember we've got the National Credit Act and we got inside and outside of the NCA. So depending on in cases where a PTY is self-sustainable and there's good profits and there's good paymentability, then we don't really always have to look at the director for affordability, then we'll base it on that income of that entity. But in your case, that'll only come away after a few years when your portfolio starts growing. So if we then have to, we could maybe then gear some equity in the existing properties, not ideally, but tell me those properties, where are they bonded, those two properties? Both with FNB. Okay, so we could in essence look at your right and see what suits we can do, I mean that will only be able to look light on. But tell me, are you renting at the moment as well? Where I stay? Yes, yes, are you renting then? Okay, so the two properties that you're getting rental on both those properties, am I right? Correct. Okay, so are you living in one of the properties? No. Okay, so are you renting somewhere, are you staying with your parents or are you, I just want to determine your living expenses or are you paying rental? Oh, you mean where I stay? Yes, where you stay. Yes, yes. So you must just remember that rental that you're paying is also obviously part of your expenses and whatever other expenses. But you know, when we do the affordability calculation, we will have that discussion regarding that. So, so, so in this case, yes, if needed, you do qualify for future rental, and then we can base the affordability because although you're buying it in a PTY, it's still part of your portfolio. So we can still do the future rental on the affordability. But that, you know, if you, if they do it, let's say for Arkansas, they do a TPN report and they say, okay, the rental is five a month there. Credit might say, okay, after after our comparable rentals, they might say, okay, you know what, we are prepared to look at three and a half thousand. So that three and a half thousand can be then added to the income 40 to do to work out the affordability on the total transaction. Yeah. Okay, so. I'm hearing you correctly. And I just for my own edification and hopefully that then for the audience that are listening to us. So you first look at the current rental incomes of the first two properties. Then you will also look at the, the income of the individual or the company that is applying. And then only if it's necessary, do you then go into the future income option as well, where you take a percentage of the potential future income that you gauge from the TPN report to That's correct. That's correct. So, so, so what we do is we, we, when it comes to investors and they, and we do affordability and we can see for organs like the bond installment will be about four month and we see but, you know, we are about a thousand short on the cash flow, then we can go piggyback on that future rental and say, okay, we can get three and a half thousand as a sustainable income that will then boost him to be able to afford that property. So yeah, that most coaches are credit guys. We try and work the affordability on most likely the affordability will be on just just on on the contract income, you know, but then it's good to know that there is an option buying that property. Yes, yes, yes, yes. That's phenomenal. Okay, that's great. And I think that gets all the information that we require not just for Matt, being concerned that, you know, maybe the bank won't approve a bond, because she's already got two properties, but also for the guys out there watching us that if they are wanting to afford a sustainable portfolio, that there is this option called the future rental income option. So I didn't thank you very much for your time. Obviously, you and I are going to talk a little bit more personal and in depth stuff. We obviously can't talk about the personal stuff online for everybody else here. So you guys are going to then discuss the personal stuff, the income and expenditure in order to assist Matt out to then purchase that third property. She will obviously go out there now make a decision on those eight properties that she does have available. So once she once she makes a decision, she will make the offer, and then she'll bring that offer to you with all the other paperwork that you require. And hopefully, we'll be able to help her before the 50 days are over. We are now in the second part of the 50 day challenge. The second half, we heard last week that Janet has now bought his first property. He's financing the cash, which is amazing, because he's got himself his wife and some others that have come come together to purchase that first property. And hopefully now, in the second half of the 50 day challenge, we can help Matt out to get her third property in order to start a really building her property portfolio. Matt, thank you very much for your time. Matt, I'll thank you very much for your time guys out there. We're hoping that you are following this journey and you are also involved and hoping to try and get your first property within the 50 day challenge. So for now, and until tomorrow. Goodbye. We'll see you there. The 50 day property challenge kicked off to a fantastic start with Janet purchasing his first property within the first half of the challenge and Matt out well on the way to purchasing her third property already in building her property portfolio. You the viewers have cast your vote and entered the 50 day property challenge competition in partnership with EDPF property academy and private property. This entitles you to the full EDPF Academy experience, which includes a 10 inch Huawei tablet, 20 gigabits of data from Telcom every month for 36 months and full access to the EDPF property academy platform. Our winner for this round is Brandon Moonsami. Congratulations to you and welcome to the EDPF property academy family.