An
example of creative real estate investment? When I was young, I had a job that
paid Kshs.400 an hour, and I somehow saved enough to buy my first piece of real
estate - 2 acres near where I lived. It cost Kshs. 400,000
I
spent a few hours removing brush, outlined a driveway with logs, and hand
painted a sign. Two weeks after I bought it I sold the land for Kshs. 600,000
with the capital gain, my annual return on investment was over 20%. This was my
first real estate investment.
I
bought the land cheap, because the seller needed fast cash. I solved his
problem. I sold the land higher than the market value because the buyer needed
easy terms. Second problem solved. Solving problems is the key to creative real
estate investment.
Cell
phone companies, radio stations, police departments and others need hill tops
for their towers. The problem is that they can't tie up their capital buying
them. One creative investor found a way to solve their problem.
He
got six month options on hill top properties for a few millions shillings.
Then, when he found those who needed them, he would get a long term lease
signed. They built the tower themselves, of course. With a lease in hand, it
was easy to get financing to exercise the option and buy the properties. He
invested a few hundred dollars to create years of income.
Trees
are needed by lumber mills. A friend of mine solved this problem by letting a
company cut half the trees on his small property. They paid Kshs. 600,000, and
I couldn't see the difference when they were done. The property was worth as
much the day after the cut as the day before. My friend lived there, but a
creative investor could buy property like his, sell half the trees, maybe clay
or gravel too, and then re-sell the land.
To
solve problems, you have to figure out what they are. Do people need easy
terms? Cleared lots? Lumber? Better access to a piece of property? Smaller
pieces of land? Condos instead of apartments? The list could go on. Just
remember that solving problems is the key to creative Kenya real estate
investment.
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