In this week’s Property Magicians Podcast, we bring you a bonus episode from a class we had for our stokvel members where Leroy taught us about running the numbers and analyzing a deal so we could understand what makes a property profitable and if it's ever a good idea to make a loss in cash flow on an investment.
In this class, we learned that there are three stages when it comes to running the numbers:
Stage 1: Capital Cost
- Transfer Attorney fees
- Transfer Duty (if your property is over a million rand)
- Bond Attorney fee
- Deposit
- Auctioneer costs
Stage 2: Refurbishment/ Holding Cost
- Rate & Taxes
- Electricity/water
- Bond/interest
- Refurbishment
- Levies
- Insurance
Stage 3: Letting/Resell Cost
- Bond/Interest
-Insurance
- Rates & taxes
- Levies
- Maintenance
- Management fee
- SELL- EA Commission
Leroy also taught us some fundamental Calculations:
● How to calculate gross yield and why this figure is important
● How to calculate cash flow so we can know if a property is a good investment
● How to calculate capital cost so we could budget and know how much of our own
money we are investing in a deal
● How to calculate ROI (Return on Investment)
This is a very valuable episode, so we recommend you get your pen and paper out and take notes. And don’t forget to join the Property Magicians Stokvel because we’re building an incredible property portfolio and providing real estate education.
Episode 115: Unconventional Real Estate
Episode 114: Creative ways to fund property developments without bank funding
Bonus Episode: Raising over R2.6 million in the stokvel and changing our name
Episode 113: How to work with a quantity surveyor to increase your profits and decrease expenses
Episode 112: Growing a construction company by 400% in 10 years
Episode 111: Investing in property straight out of college & owning a 9 unit property at the age of 28
Bonus Episode: Raising R268,974/US$17,935 in 7 days to invest in property
Episode 110: Buying 3 positive cash flowing multi-lets during a pandemic
Episode 109: The magic is in your mess
Episode 108: From rural Limpopo to building a multi million rand property portfolio
Episode 107: How to build a property portfolio that replaces your income in less than 5 years
Episode 106: How to make 2 to 3 times your rental income as an AirBnB Hostpreneur
Episode 105: How to own 6 properties in less than 12 months
New Year Episode: Setting property investment intentions and understanding your investor archetype
Episode 104: The Low Money or No Money Down strategy of Property Investing
Episode 103: How to go from a negative cash flowing property to raising R9 million (US$571,000) for a property development
Bonus Episode: Making 15% Return on Investment in 3 - 6 months
Episode 102: How to make money from sourcing real estate deals
Episode 101: How to raise R331,000/ US$21,000 in 5 weeks in a property stokvel/fund
Episode 100: Celebrating 100 episodes and using creativity to build a profitable property business
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