On the 7th of July 2020, Mahlatse Kekana, Junior Portfolio Manager at TUHF joined Private Property’s podcast series on Facebook. Hosted by Zamantungwa Khumalo, Mahlatse featured as the guest speaker to discuss entrepreneurial success tips in commercial real estate.
“The first thing that TUHF looks for before processing a loan application, is a fit for that particular entrepreneur or enterprise. TUHF has what we call a character-based lending strategy which means that we look at the character as well as, the background and abilities of the person behind the deal.” Mahlatse explained.
TUHF will also assess:
– Whether the deal is commercially viable, i.e. does the deal make commercial sense?
– Whether the loan that it gives you can be paid back from the income that will be generated from the particular property
Over and above, TUHF’s financing process can be summarised in 8 steps
Step 1. Identify an inner-city area in which you would like to invest, in line with your knowledge & experience
Step 2. Find an existing building or site for a new building
Step 3. Do your research by gathering information to prepare for your meeting with a TUHF Consultant
Step 4. Apply for TUHF finance
Step 5. Begin the credit approval phase
Step 6. Meet the conditions of the approval & sign loan agreement
Step 7. Registration of property takes place & construction starts
Step 8. Construction complete, rent up and cyclical processes
In concluding TUHF’s steps of lending, Mahlatse mentioned that some of the most successful property entrepreneurs are those who buy correctly at the correct price. “You have to buy properties that suit your risk appetite and capabilities. The most successful entrepreneurs are street level and they have a network of real estate agents, developers, and financiers. Platforms like Private Property provide a basis for entrepreneurs to find property. But it’s when you really start engaging with your peers and fellow entrepreneurs that you start finding what a good transaction looks like” Mahlatse added.
Zamantungwa and Mahlatse continued the conversation by discussing other factors that property buyers should be mindful of when buying property in the inner city. Mahlatse explained that finding the right deal, or property is not easy, and this means that people will often enough have to let go off a few properties before finding the one more suitable for them. Mahlatse highlighted that even though you may not come with a feasible proposal in the beginning, TUHF is still able to assist you find the right deal.
TUHF is also able to fund property entrepreneurs in township areas of South Africa through its uMaStandi product offering. uMaStandi launched in 2017 and it finances township entrepreneurs.
“In summary, the best advice that I can give in closing to property entrepreneurs who want to succeed in the real estate property market is firstly; you should start small then go big, secondly; always interrogate purchase prices and lastly; be conservative in your estimates.” Mahlatse concluded.
Learn more about TUHF https://www.tuhf.co.za/
Learn more about uMaStandi https://umastandi.co.za/
Get to know Mahlatse Kekana – LinkedIn https://cutt.ly/qpq4hCx