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Road to success in real estate

Over the past decade, real estate has headed towards the sky and has become one of the most vibrant sectors of the Kenyan economy.

Almost every young Kenyan dreams of owning property, either in towns or their suburbs. This has, in turn, led to escalation of the cost of land and housing.

The fast growth of the middle class has been a boon to the sector, with increasing demand for decent and affordable homes.

It is estimated that Kenya has a supply deficit of over 200,000 housing units every year. As demand grows, entrepreneurs have taken advantage of the opportunities presented to net billions.

However, few understand how to make an entry and sustain growth in this booming sector.

Making the first step in the long journey to success and keeping a good pace has remained a mystery to many potential investors.

“The best thing about real estate is that you don’t need to be a rocket scientist to succeed; all you need is hard work and determination to achieve clearly set goals,” says Mentor Holdings executive chairman Daniel Ojijo.

His company has grown from a part-time marketing agent in real estate, earning a commission of 30 per cent, to the multi-billion venture that it is now.

The dream was conceived through interaction with an agent who helped Mr Ojijo get a house.

He realised that one does not need to own property to make money. Instead, you just need to bring together property owners and those looking for houses. By so doing, you get a piece of the cake in the form of commissions.

Mr Ojijo’s marketing skills and determination earned him a chance to work with a bigger firm, in which he eventually acquired a 20 per cent share.

He later pulled out to buy Villa Care, which was not doing well at the time. The company has since grown to become the multi-billion shilling empire under the name Mentor Holdings.

Co-owned with other directors, Mentor Holdings has 11 subsidiaries including Kenya Homes Expo, Beyond Media, Homes Kenya, Windsor Homes, Home Fix, Nairobi Best Homes, Villa Care, Kenya Interiors, International Valuers, and Mentor Group Limited.

Windsor Homes alone has a portfolio of Sh15 billion, with the total turnover of the holding company well into the billions.

According to Mr Ojijo’s business partner, Major (retired) D.K. Karau, real estate business is demanding, especially at the start because it requires high amounts of capital compared to other investments.

Most of the ventures are started through loan financing and it may take time to break even.

However, once success docks, the glory of the enterprise keeps growing, with assured demand for houses as long as the population keeps growing.

Maj Karau says partnerships are important in the business. If you are a developer, you need to hook up with a marketer, a valuer, contractor, and project financiers.

“This industry is about knowing people and positioning yourself strategically. Open-mindedness to business opportunities created through partnerships is of invaluable importance,” he says.

“Our growth has been fuelled by partnerships with people of similar passion. We yearn to provide a one-stop-shop for our clients so that we can answer all their questions without having to consult outside,” says Maj Karau, who is also the company’s investment director.

According to older players in the sector, you cannot succeed in real estate unless you have passion for the business.

Your adrenaline must shoot up when you hear people talk about land or property. This helps you overcome obstacles in the path to success.

“You need to know what your competitors are doing and be ready to take advantage of their weaknesses,” says Mr Charles Mwangi, the chief executive of Rubyland Limited, valuers and real estate consultants.

He says one needs to research the market before picking a location and nature of the venture.

“The disadvantage of reproducing your competitor’s product is that you have to price yours within their range,” he says.

Understanding the laws governing development is also important so that one does not have to contend with demolitions in the future.

Successful players say real estate gives one the ultimate pride of an achiever. They argue that even those who have invested in other sectors at some point feel the urge to own property.

Clearly, there are opportunities to reap from the booming industry. And those in it agree that although the road is rough at the beginning, the sky is the limit once you hit the tarmac.

source:Daily Nation Thursday, April 12 2012
Posted on:11-Jun-2012 pm30 8:05:26 pm
Posted by:platinum