FULL GUIDE: 15 WAYS TO INVEST IN PROPERTY USING

OTHER PEOPLE’S MONEY

by Anton Breytenbach

How to use this Guide

A lack of access to money should never prevent you from securing that good property investment deal that
you’ve found.
I’m always astonished by the general perception that the only way to invest in property, is to buy and pay
for property “out of your own pocket” (either in cash or by getting a home loan that you need to service, or a
combination of the two) and that you personally need to be able to afford it.
This is because of all the “not-know-how” being loosely taught out there and the “opportunity seeking” mentality
of some property investment professionals and educators.
I’m sure this is what you though as well, right? If that is the case, your world is about to open up and a new life
is awaiting you.
Or maybe you knew about some of these methods and I then hope that I can give you a new method that you
didn’t know about, to help you secure your next deal… and the next, and the next.
Either way, it’s my privilege to share this information and knowledge with you!
So here it is. My list of 15 proven ways to invest in property using other people’s money (or OPM as it’s known in
the property investor’s world) - and ONLY number 1 is getting a home loan from a bank, but in this case you can
also use someone else’s affordability.
The reason I call this a “proven” list is because I have personally used almost all of the different methods on the
list, to build my own empire from scratch, so have my students, business clients and friends who are experts in
the industry.
I’m even busy developing 400 residential apartments using a combination of only OPM methods on the list. The
rules are the same for all types and size of property investments and it usually takes the same amount of work
too. But start small and then scale fast – as fast as your heart desires.
It all depends on where you are in your journey to building your own empire and to live the life that you want
and can control. But don’t get stuck on single residential houses or apartments forever. This should only be the
starting point and then using the methods on this list to secure larger opportunities and exponentially growing
your portfolio.
For example, I’m also using an OPM method on the list to build a private student accommodation fund, by
converting and refurbing GB 4 zoned commercial properties. Can you figure out which one?
If anything doesn’t make sense or is confusing in any way…don’t worry! I’ll be back soon with more great content
to answer any questions in this guide and make it all very-crystal-clear. So keep an eye out and make sure you
read my emails over the next few weeks.
Enjoy the read and I’ll see you on the other side!

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CONTENTS
1. Bank Home Loan Finance p3
2. Bank Surety p4
3. Personal Credit p5
4. Equity Gearing p6
5. Asset Finance p7
6. Partnerships p8
7. Seller Finance p9
8. Owner Finance p10
9. Venture Capital p11
10. Private Finance p12
11. Angel Investment p12
12. Family Investment p13
13. Rent to Buy p14
14. Rent to Rent p15
15. Other p15

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 1 BANK HOME LOAN FINANCE

• Using the banks money when you buy and finance a property, namely a home loan or commercial property
finance. You become the owner and principal debtor, but the bank registers a bond over the property and
keeps the title until full payment.
• This method is the one that we are all familiar with. There are however a few “little known not often used tips”
that you should know.
• There are over 50 banking licenses in SA and a total of 14 banks that provide home loan finance, each with
their own criteria.
• Not using your available bond exposure is like money under your matrass or equity in your property that is
not working for you. It’s not generating wealth.
• When you apply the bank qualifies you on two calculations, namely affordability (30% of your gross income
can go towards a bond repayment) and disposable income (after deducting monthly expenses can you still
afford the bond repayment). The banks also look at your credit record plus the property and it’s underlying
value as security for loan.
• Don’t assume how much you qualify for as you might be missing out. You can use a bond originator or bank’s
online affordability calculator (I would suggest doing that right now), or you can even do a no obligation
preapproval through a bond originator.
• If you qualify in example for R1,5m you can finance five properties of R500k each. Or if you have a bond of
R1m on your primary home, you can finance another investment property of R500k. So, if you have one home
loan, it doesn’t mean that you cannot get another home loan, as long as you can “afford it” based on the
calculation above.
• There is a specific way that you can secure five times more home loan finance than what you qualify for in
your personal name, by using a company surety structure. Keep an eye out for my upcoming content.
• All the banks provide 100% home loan finance up to around R3m or more.
• All the banks provide home loan finance to a new “holding” company and some up to 100%. All you need for a
holding company to apply is a solvency letter from an accountant and not 2 year financial statements – as
long as the business is not trading.
• All the banks add current rental income on properties that you “want to buy” to your overall affordability,
but each bank has a different calculation for how much they will add. One of our major banks even recently
innovated with a Future Rental Income product, where they will add estimated future rental income (if the
property is owner occupied or vacant) to your affordability on a property that you “want to buy”.
• For a current rental income example, if a property has a rental income of R8k/month, at the top end of the
calculation you can qualify for an additional R240k in home loan finance. It might be the boost you need. So
if you have a R1m home loan, can already get another R500k and spot an opportunity with an R8k/month
rental income to get another R240k, you can now get R740k home loan finance to buy the property – at a
13% gross rental yield in this example, the tenant will be paying the majority if not all of the monthly costs
including the bond.
• The main concept when investing in a buy-to-let property using home loan finance, is that your tenant
should pay all your property costs, including your home loan repayment, while you get the upside on both
your capital growth and income escalation (rental income currently escalates at around 8% which is higher
than inflation at 5,5%, so you get richer every year). Note that a buy-to-let strategy is only 1 of 7 property
investment strategies.
• When you buy and finance property together with someone else (a spouse, friend, club etc.) you can increase
your overall affordability. Even if you personally have no or variable income, you can get your hands on a
property by buying with someone else that has affordability to secure a home loan – e.g. are you not working,
but your wife is?
• The banks use different percentages of combined income to calculate overall affordability, depending on
how many buyers you are and the total purchase amount, the same as with rental income.
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• You will notice that I haven’t once referred to a “bond” above. A bond is the security that the bank registers
over the property, to give you home loan finance. The bond and finance are two separate items or contracts.
Always register a higher bond than the purchase price, so that in future you can apply for an advance
against the existing registered bond (which is quick), versus having to register a second bond. My rule is 1.5
times of purchase price.

MY TOP TIP:
• If you buy a property off plan, you need to immediately “apply” for and secure a home loan
(as the purchaser guarantees), but you only start paying once the property is finished and
the bond registers. That could be 18 or more months down the line. During this time, the
property appreciates in value, especially once the developer starts building and nothing
stops you from reselling the property at a profit before taking registered ownership and
starting to pay the finance (if your purchase agreement with the developer does not limit
you from selling before completion).
• During this time, because the bond has not registered yet, it also won’t reflect on your
credit record as a contractual financial obligation, so you can still get other home loans on
for example an existing property.
• Note that plot and plan developments work differently, you take transfer of the land usually
right away and also have to pay interim interest on the building work as and when progress
happens. So always find turnkey developments, not plot and plan, if it’s a free standing
residential property and you want to use this strategy.

2 BANK SURETY

• Using the banks money, but with someone else giving them an undertaking to pay them back. You still
become the owner and principal debtor and the surety does not become an owner or principal debtor.
• A surety is when a person takes responsibility for another’s performance of an undertaking. The bank will
then do the affordability calculation on the surety and this will be the amount of home loan finance that
you can secure. As a footnote, use the online affordability calculator mentioned above if you know what the
person you have in mind earns (you didn’t hear it from me though).
• At events I always tell the story about our youngest client at Empire Wealth being a 19-year-old Flight
Attendant that already owns three properties. Her dad stood surety for her to buy and finance her first two
and then after adding the rental income from these, she qualified to finance the third property on her own.
• One of my first deals, I used a surety when I bought a R2,4m guesthouse in 2006 with an existing 24% gross
income yield (cash flow positive with about R12k/month from day one), and only one year out of varsity and
when I was just earning a small commission from my employment.
• So by using this method, you do not need to be able to prove that you can afford the home loan, or even have
a good credit record. Or you may be able to afford it, but already have home loan finance and have reached
your available exposure.
• Sit back for a moment and think of potential people in your life that will stand surety? You can enter into a
formal agreement with this person (ps. or more than one person), letting them share in the upside. First prize
would be that they just want to help you out, as you already have a finance cost (the interest on the home
loan).
• For the person standing surety, the surety amount does not get deducted from his or her home loan exposure
and they will still be able to secure their own home loan finance as well (except at the bank where they are
standing surety to the maximum of their affordability).

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 MY TOP TIP:
• One of the best ways to use the surety method if you cannot get a home loan but have
some cash, is for shorter term renovation projects. You can then agree with the person
standing surety to share in the upside in exchange for his surety and risk, as you will be
putting in the “sweat equity” and capital to unlock the returns.
• Or, if you don’t have cash, if you buy a distressed property well below market value, you
can use the equity in the property for the renovation costs, financed by the bank.
• Remember you can register a higher bond than the purchase price and the bank will lend
up to the market value of the property!
• For example, if the property in its current state is worth R1m and you can buy it for R700k,
you can register a bond for R1m and after the property has registered, take the R300k
equity out of the bond as an advance on the bond. Obviously, you will then use the R300k
for renovations, which should increase the value by around 3 times base cost, in other
words the property should now be worth around R1,6m.
• You could then use your profits on sale to pay off some of your other debt and to get a
home loan on your own, or reinvest intßo your next deal, still using suretyship.
• Before taking on a reno project like in this example, always check the market that houses
in the area can sell for the “after reno price” and that you won’t be selling above the top of
the market in the area. In other words, don’t over capitalize.

3 PERSONAL CREDIT

• I include this method here because it’s also a method using an NCR registered credit provider (contractual
debt), namely a credit lender or the banks money as personal unsecured debt.
• There are many forms of personal credit, including credit cards, personal loans, facilities etc.
• The reason for the high interest cost is because the banks do not take security for giving the credit, versus
taking a bond over a property for giving a home loan.
• Personal credit is a good from of debt to use for property investment, as long as your return is going to be
higher than the cost of your debt (the interest) – versus using personal credit to buy assets that depreciate
and don’t pay you (like a car), or for other expenditure.
• I personally only use my credit for property investment and education.
• I call my credit cards “investment cards”. I like keeping my unencumbered cash liquid for unforeseen needs
and “wants” – my core reason for using OPM and not my own money. In other words, my property investments
pay for my lifestyle and I invest my available debt.
• Just recently I used a personal loan for the refurb cost on a small residential property in an affordable market,
on which I secured a 100% home loan to purchase. Double OPM. I further once bought a property on auction
using two of my credit cards, that I resold the next day to someone that missed the auction.
• You could also use a combination of personal credit, e.g. personal loan and credit card. You could even
partner with someone that has access to personal credit as well.
• So you can use this strategy as a stand-alone method to invest in property.
• Plus, this method can also be used to compliment almost all of the other 14 ways.
• Be sure to plan ahead and know your numbers, work smart and have self-control with your debt. Plus, if you
estimate that you are going to turn around a deal in 6 months, double that time to calculate your accurate
finance costs on your deal and build in a buffer – I call this worst case planning, which only if the numbers
work on this scenario will I move on the deal.

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 MY TOP TIP:
• Something that you should do right now if you have a credit card, is call your bank and ask
for a lower interest rate. “Our economy is going through times, also impacting you and with
ever increasing expenses, you are reaching the top of your disposable income, so without
a lower rate you will need to decrease your debt limit or even cancel it completely”.
• The phone number of your banks credit card division is usually on the back of your card.

4 EQUITY GEARING

• This is the method that has made the most property multi-millionaires in the world.
• Using the equity in your primary home, secondary property (beach house) or investment property, as security
to borrow more money, to reinvest in more properties to grow your portfolio.
• My rule is that as long as you are growing your portfolio, you want an 80:20 debt to asset ratio. In other words,
you should leverage (use) at least 80% debt against the value of your property to reinvest in more property.
If not, it’s also like money under the matrass not working for you.
• Gearing is the concept of using something small to achieve something big, for example taking R100k out of
your current property to use as a deposit to buy another R1m property. Your personal investment is R100k and
if your property value grows by 10% in the first year, you will have had R100k growth on your R1m property plus
100% return on your investment of R100k. This is why I don’t invest in crypto currencies and stock as my main
strategy; you can’t gear them.
• Leveraging is when you borrow against the value of an asset. You are using something to achieve something,
like a lever. So the R900k bond that you took out in the example above, is leveraging the new asset by
borrowing money against it (and getting a 100% return on your R100k invested – if you secured a 100% home
loan your return is infinite, or you can use your transfer and bond cost as the base calculation for your return
on investment).
• Remember under method 1 my rule is to always register a 1.5 times size bond on the purchase price of the
property, to gear the future growth in value of the property. There is however no upper limit to the size of
bond that you can register, you are only limited by the bond registration cost. I have gone 3 times. If you are
buying an investment property in a fast growing market, you should consider a higher bond ratio to grow
your portfolio faster.
• If you have equity in your property but can’t get more finance based on your affordability, consider using a
surety.
• Also, you can use your equity to secure finance from any other financier or investor, as almost any lender will
happily take security over an immoveable property. Remember however, no NCR registered lender will take
security over a property if a bank has a first bond over a property, because they will stand “second in line”
when there is a credit claim or forced liquidation. This however does usually not stand to be true for private
financiers or investors, everyone is not that informed, or might not care about the bank’s first bond.
• Remember to never sign unlimited security for finance. For example, if you borrow R500k, you want to limit
your security in the property to R500k, otherwise a creditor will take the whole asset to recover the R500k,
even if the property is worth for example R1,5m – this is the reason all financiers are so eager to borrow
against a property with unlimited security.

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 MY TOP TIP:
• Chances are you have equity in your primary home. A great way to start investing in
property is by gearing the equity in your primary home.
• If you use the equity unlocked in your primary home to pay for a deposit and you secure
a buy-to-let property with around a 12% gross rental yield, you will be cash flow positive
monthly on the investment property and the positive rental income can go towards
servicing your additional bond finance used. In other words, you are breaking even on cash
flow, but you now have two assets growing in value, plus your rental income escalates
annually which then improves your cash flow position.
• For example, if you unlock R500k equity, you only need around an additional R5k/month
to service the additional home loan (most likely an advance if you’ve had your home for
some time, so you are re-borrowing the amount that you have already paid off).
• Multiple times have we helped our Empire Wealth clients to gear the primary homes that
led to acquiring at least 3 more properties within 12 months, without changing the cash
flow position in year 1. As the rental income escalates annually, they can now even pay
up their primary home loans faster, or have cash flow to reinvest in further growing their
portfolio or for other expenses – plus they have 4 properties growing in value each year!
• This is why property and especially leveraging and gearing is such a powerful tool.

5 ASSET FINANCE

• Using your moveable or current assets as security to borrow money against.

• Asset finance is very similar to equity gearing, but you are not using an immoveable property, rather a
moveable asset, or investment, or your balance sheet items as leverage.
• There are more asset finance companies than banks. Many of them take paper investments as security, for
example listed equities or bonds, collective investments etc. sometimes even policies – in other words you
can leverage your investments without selling them off.
• Other moveable assets that you could use (especially if you are a business owner) includes vehicles, plant
and equipment, trading stock, or personal use investments (like jewellery). There are many options and
forms of assets that can be used for finance.
• I recently had a client at Empire Wealth who wanted to sell his listed share portfolio to invest in property,
but we instead secured asset finance, which he invested in a multi-let (also known as HMO) student
accommodation project. In 3 years, he will have repaid this asset finance plus still have his share portfolio
and the student property, that is giving him a 24% gross rental yield (positive cash flow investment). He can
then use the positive cash flow to buy more properties or shares.
• The great thing about asset finance is that you have so many financiers to your disposal, each usually
specializing in a specific asset class. I recently heard about someone that gave up his paintings as security
to borrow 45% of its value – yes he bought a property and the paintings are still hanging in his home.
• Early in my journey I borrowed money from a family friend to buy a freestanding home to renovate and flip. I
gave one of my cars up as security. In essence, I used asset finance.
• Have a think about which of your assets you could potentially refinance. The growth in your property portfolio
can then repay your asset finance and once paid up, your income continues to grow for life.
• When you list your assets and work out your balance sheet, your total assets will likely be worth a lot more
than you think.
• Another great thing about asset finance, is the contractual debt usually does not appear on your credit
record and does not influence your credit affordability.
• Another form of leveraging your assets are by renting them out, from your vehicle to your golf set. Many
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 business operators, as the “new way” of doing business, leases their business stock, rather than buying and
owning it (e.g. Uber doesn’t own a single car).

MY TOP TIP:
• The asset that you use for finance does not necessarily have to be your asset. You could
apply the same principles of surety to this method if you know of someone with underutilized
assets. But please don’t rent their assets and encumber them with debt.
• Asset finance is also a great method to use if you can get a home loan, but don’t have
cash for closing and other costs, plus don’t want personal credit to reflect on your record.

6 PARTNERSHIPS

• Entering into a partnership with other people or parties is hands down the fastest way to grow your portfolio,
without using any form of contractual debt.
• Partners typically do not look at your own affordability and financial record, but only at the opportunity in the
deal, plus your credibility as a partner.
• They are normally also operationally involved in the project, which gives them a higher sense of security.
• There are 3 main forms of partnerships that you can enter into:
• You provide the finance or surety and the other partners the cash.
• You provide cash and the other partners the finance or surety.
• You provide only sweat equity and the other partners the cash and finance or surety.
• You can then use your profits from a partnership to go grow your own portfolio, or as a supplement to your
existing strategies if you are over exposed – you only have so much home loan and credit affordability, or
assets to leverage etc.
• There is no ownership formula (although the partnership benefits are usually determined by risk versus
reward, or in other words, the return percentage is equal to the contribution). It all depends on the agreement
and negotiation between the partners.
• For example, you can use point 3 above and still share 50/50 in the profits. Or if someone stands surety for
a bond, how large exactly is their contribution and risk if only you are liable to cover the bond repayment?
Commercially, if only you must repay the monthly bond amount, you should get the larger share of the
profits.
• Another powerful characteristic about partnerships is that you can enter into multiple deals at a time if you
want to expedite growth. I use different partners for different types of projects and usually have around 3
running at a time.
• When entering into a partnership, it’s my advice to use a private company with share capital and to have a
good shareholder’s agreement with all terms of the partnership discussed and agreed upfront.
• Partnerships is a great way to start, because you are also spreading the risk and resources plus from an
outcome point of view, “two heads are better than one”. I have some friends in the industry that have formed
partnerships, just to be able to learn a specific type of investment, for example moving from residential to
commercial. This is especially a good method to start in property development and a method I still use
today.
• Typical formats of partnerships include join ventures, consortiums and even crowdfunding, if you want to
take on multiple partners.
• Another benefit from partnerships, is that you can do larger deals. The larger the deal the larger the returns
for all partners. Plus, I like the sweat equity model the most in this case.

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• I have another friend in the industry who has done more than 40 partnerships with a total value of over
R120m, with a focus on redeveloping opportunities to densify the occupancy.
• Think about what your skillset is that you can contribute to a partnership and what it’s worth in unlocking
the value in the property? Maybe you are good with numbers, have a design flair, knowledge of the industry,
access to a good deal etc.
• And as a last piece of very important advice, always choose your partners carefully and when information is
presented, trust but verify before concluding a partnership.

MY TOP TIP:
• If you enter into a partnership, you don’t necessarily have to share the profits in equal ratio
to the shareholding, you can also fix the return percentage or amount for each partner. In
this way you can maximise your own returns.
• For example, if someone put’s in R500k in cash, why not give him or her a 15% return on their
money equal to R75k, although there might be R300k profits in the deal. It all depends on
who you partner with and what terms all the partners are happy with.
• You will be surprised by how many wealthy individuals are out there, that are cash rich but
time poor and would jump at an opportunity to invest in property with a partner that has
the “know-how”.

7 SELLER FINANCE

• Yes, using the seller “as the bank”. In other words, paying the seller off over time.
• When using seller finance, sellers typically do not look at your affordability and credit record, but at what they
will get out of the deal in the end, which is more important to them.
• You will be surprised by how many sellers don’t necessarily want the “full sales proceeds” upfront, but are
happy to receive them over time, especially if there is interest or other proceeds added to the sales price that
leads to a higher return over time. This is especially true for someone that has a paid up property that they
are selling and are after monthly income more than cash – e.g. someone retyring and moving in with their
children.
• I usually use this method to purchase properties that form part of a deceased estate. The beneficiaries of
the estate don’t want to carry the cost of the property and want to sell urgently, but also know that if they sell
right now, they won’t get the price that they want. Hence the seller finance opportunity.
• Remember that every seller has a different “why” and it’s always important to find out what that is. If you are
working with an agent, develop the skills to ask the right questions.
• Their “why” might not be money motivated. I once bought a property using this method from a couple that
wanted to immigrate, they already had the funds to do this. However, cash flow while they were getting
established, plus receiving more out of their property than a full sale below market value right now, was more
motivating.
• When using this method, you can also give a deposit. Plus, repayment does not necessarily have to occur
monthly, you could for example agree annual down payments.
• There are 2 forms of seller finance:
• You take over title immediately. The seller or conveyancing attorney will retain the title until the last payment.
• You enter into an instalment sale and take over title on the last payment (usually the one that sellers are
happiest to enter into).
• Seller finance is a formal but rarely used structure in South Africa, regulated by the Alienation of Land Act. The
seller finance agreement gets recorded on the title of the property, in the deeds office by a conveyancing

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 attorney. He is also the party that gives effect to the agreement as the conveyancer.
• This gives both parties comfort and security and especially the seller, that if you default on payments, an
attorney can lawfully put you on terms. Once again, the agreement gets recorded on the property’s title.
• The biggest advantage of seller finance is that no contractual debt gets recorded on your credit profile.

MY TOP TIP:
• Seller finance is a great way to enable positive cash flow on buy-to-let investments when
you agree monthly interest only and annual capital repayment with the seller.
• Be sure to reinvest your positive cash flow and make provision for the annual capital
payments, or whatever the terms might be.
• Remember that you become the owner of the property, either on signing of the agreement
and transfer of title, or the date of last payment if it’s an instalment sale.

8 OWNER FINANCE

• This is my own absolute favourites, using the owner to finance a back-to-back, flip or wholesale deal, that
can take on many forms of terms and timelines. In other words, the owner keeps paying the property, while
you take over control and get it ready to be resold to someone else at a higher price, before you need to
perform in terms of your agreement.
• Owners typically do not look at your affordability and credit record, but just want to know that they will get
paid in the end, and at a price that they want.
• This is one of the biggest return on investment strategies in property investment, in essence giving infinite
returns by not paying for a property, but by securing legal control over it on a buying agreement and then on-
selling the contract, or entering into a new contract (you however can’t make a margin if you only nominate
a new buyer).
• I recently wholesaled a 44 apartment complex using owner finance, where my net result was that I retained
9 apartments unencumbered. I “bought” the complex as a single title, subject to the opening of a sectional
title register by the owner, and I contractually sold off 35 apartments before having to flow the purchase
proceeds to the seller on the opening of the sectional title, which then became my purchase guarantees and
covered my full acquisition cost. I used the Angel Investor method for the 10% refundable deposit.
• I also completed a back to back on a hotel in the Garden Route, where I secured a 90-day due diligence term
on the below market value property (due to the downturn in tourism) and within this timeframe, created a
retirement facility redevelopment plan, plus sold the property to a developer with this redevelopment plan.
In other words, I showed the new purchaser what could be done and the associated feasibility. The final
outcome was that the developer would still make a profit on his project, even though I added a 100% margin
to my purchase price.
• Another well know model for using this method, is securing a commercial property on a lease with an option
to purchase at its current value (fixing the price), then increasing the rental income by improving the tenancy,
which increases the market value of the property. And then exercising the option once you have secured a
new purchaser to purchase at the new price.
• Commercial property’s value is determined by the income it generates, called the income capitalization
method, usually at a 9% net rental yield per annum. For example, for every R10k/month rental income that
you add to the property, the value is increased by R1,3m.
• Another way to use seller finance is to share the upside with the owner, which is similar to the partnership
model. In other words, the owner can become your partner, you can unlock the value (using your own sweat
equity) and you both can share in the upside on a sale. You however still need to secure legal control over the
property in this case so that the owner does not “cut you out of the deal”. You don’t want to improve someone
else’s property without benefit, or even worse, losing money.
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• Also, make sure that you don’t give the owner ideas before you have concluded an agreement (usually in the
form of a Heads of Agreement), which can be achieve by retaining your IP in the initial conversation (don’t
show all your cards). You don’t want to improve someone else’s property’s value free of charge.

MY TOP TIP:
• The possibilities with owner finance is endless and you could do multiple deals at a time,
because they typically don’t require any capital or finance, only your time.
• It is however important to have access to reserve money somewhere, for unforeseen and
related expenses, which you could access by using one of the other 14 ways in this guide.
• Start small to learn the “ins and outs” and then use the profits from you first deal to get a
good attorney in your corner to guide you to do larger deals.

9 VENTURE CAPITAL

• Using organizational money that are not the banks.

• Venture capital is a form of financing that is provided by firms or funds to small, early-stage, emerging
businesses and projects that are deemed to have high growth potential.
• There are more venture capital firms than banks in South Africa.
• They usually look at the deal and not the individual’s repayment ability and only sometimes at his or her
credit record. Their lending criteria is also not as rigid. especially because they take security over the property
which in turn decreases their risk.
• I can’t remember how many times I have used venture capital, as this is a great method for medium term
high return projects, like buying a big industrial warehouse, building and converting it into mini industrial
units and then selling it off as sectional title units to multiple purchasers.
• A venture capital firm usually lends money with interest only repayments until the deal is concluded, if they
share in the upside. Sometimes there can also be no repayments until the exit and they will then recover the
interest component from the profits. This is especially helpful when you have other holding costs.
• Venture capital is more expensive than bank finance, but definitely worth the cost if there are enough profits
in a deal. And it’s especially useful if you have already reached your bank exposure (in other words you can’t
get more home loans or commercial property finance).
• Another benefit of venture capital firms is that they usually contribute other resources to the project, like legal
or financial expertise and sometimes even development professionals like architects, engineer etc. which
decreases your own risk. They might or might not add this to their finance costs.

MY TOP TIP:
• A good early stage use of venture capital is to buy, improve and then sell off a smaller
multi tenanted property (e.g. small block of apartments with 8 doors).
• Banks hate financing deals like this, venture capitalists love it.
• Before approaching a venture capital firm, find out what their criteria and costs are, then
match your opportunity with a venture capital firm that meets your needs as well as their
criteria. You could even reverse engineer this process – find out their criteria and then find
a deal. This is what I’m doing.
• They are harder to find on the internet, so rather search for “lists” and “venture capital”
rather than “property investors” or “property finance”.

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 10 PRIVATE FINANCE

• Private finance is very similar to venture capital, except venture capitalists will usually invest someone else’s
money on their behalf (mandated by other investors) and this is also the reason for being more “corporate”
in their approach. Private financiers will however invest their own money.
• They usually look at the deal and not the individual’s repayment ability or credit record.
• Private finance can be found in various forms, but the most popular ones are private consortiums and family
offices.
• There is not a shortage of this type of investment funds out there, but a shortage of good property investment
opportunities for them to invest in.
• Remember that I earlier made the statement that there are many wealthy individuals, that are cash rich but
time poor, and would jump at the opportunity to invest in property. In this case, they form conglomerates and
are constantly looking for opportunities. Make it your mission to find at take deals to them.
• Private financiers will also follow deals where they can get the best return on their money and usually this is
the deciding factor.
• I typically use this method for working capital for medium sized developments, as the returns for private
investors are high because they invest in the value chain of the development at an early stage – versus
buying the final product off plan.
• Usually once you have completed a successful project and your investors have made good returns, they will
continue to invest in your deals and the next time, much easier.

MY TOP TIP:
• I’m sure that if you ask around, you will find private investors and financiers in your
immediate circles. This is a good thing as it would mean that there is some form of an
existing relationship within your mutual contacts.
• Private finance is usually based on good relationships, more than anything else, and with
a good opportunity to present it’s almost a sure thing.
• Or, as a tip, why not find a few wealthy individuals and help them to form a consortium to
invest in your deals.

11 ANGEL INVESTMENT

• An angel investment is the term used for an individual private investor, versus an organisation or group with
multiple investors or parties involved.
• This method differs from a “partnership” in the sense that the angel investors is usually not operationally
involved, plus he or she is only providing a form of a loan and is not taking up equity. Also sometimes referred
to as hard money. But stay away from loan sharks!
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• I rarely give away equity for money only, other than as security when needed. The person should be able to
contribute to the success of the project through other skills or contributions to receive equity.
• An angel investment is usually easy to manage due to only having one individual as an investor and the
non-existence of a reporting structure.
• Angel investment typically works very well for smaller refurbish to flip projects, or even minor works renovation
projects.
• It’s also a good method to supplement one of the other methods, as it will lead to a smaller investment
needed by the angel investor, which translates into a lower plus shared risk, making the decision easier for
them.
• The cost of angel investment will be determined by the offer and terms that you negotiate with the investor.
I’ve found that it could be as low as 10% on the money borrowed – same as the banks will charge (it’s a good
angle to ask them if they want to be the bank instead).
• Getting a loan from an angel investor is usually substantially lower than sharing profits. I however always
prefer giving a combination of the two (loan interest plus percentage of upside), if the angel investor has
other resources to share, which gives the investor a vested interest in the success of the deal.
• Having one private investor could also help you when you need to delay the sale, in order to achieve a higher
price point, versus having committed to a fixed repayment term in a more formal corporate structure like
venture capital.

MY TOP TIP:
• Ideally approach someone who has acted as an angel investor on a property project before,
or even better, has done his own projects. You will then only need to sell the opportunity,
not the concept.

12 FAMILY INVESTMENT

• This is probably one of the easiest ways to secure OPM as there is a trust relationship. It’s a great way to get
started.
• You will remember under the Surety method that I mentioned Empire Wealth’s youngest client having 3
properties, because her “dad” stood surety for her on the first two.
• It’s also a great way for both family members to benefit and grow their individual wealth. This is always the
approach that you should take, namely the benefit for the family member as well and not only asking for a
favour.
• At how may family gatherings did the group speak about property investment and who showed the biggest
interest?
• Business with family usually goes sour when there is not good communication, transparency or arising from
decision making challenges, because roles and responsibilities were not clearly agreed upfront.
• If you have a big family, you’re in luck. Note that I didn’t exclude extended family from this method – but I also
didn’t explicitly refer to approaching your mother in law either (No! - I know you’re thinking that if the deal
goes south it wouldn’t be that bad – you’re wrong).

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 MY TOP TIP:
• Business with family can and should be formally structured, treat the family member like
an angel investor, or bring them in as a partner even though their role might be very small.
Let them select the floor tiles and know them in your decisions.
• Also, when approaching a family member with an investment opportunity, present a
formal and well written investment proposal, just like you would have done for any of the
other of the methods above.

13 RENT TO BUY

• This method is a combination of owner and seller finance.

• I’m not sure which variances of this method was available at the time, but as far as I know I was the first
person to conceptualize Rent-to-Buy back in 2008 in the format that it’s widely used today.
• This happened when I wanted to help a developer sell his stock in the economic recession, plus also improving
his immediate cash flow while keeping the asset on his balance sheet for as long as possible. It however
substantially helped the purchaser, which lead to the quick sell-out. Banks weren’t lending at the time and
tenant purchasers could prove to the bank that they could afford the bond repayment, by paying the same
rental amount as the future home loan on purchase when the rental term expired. Plus, they were building
up a deposit while renting in order to secure a lower loan to value loan when later applying for a home loan.
Also applying on a property purchase price less than market value in the future, due to the initial contract
price being fixed at the start.
• There are two important key components to this method, firstly you fix the price at today’s value, plus you
are building up a deposit right away – your rent goes towards your purchase price. And obviously, you don’t
need to apply for a home loan right now.
• A rent to buy is one agreement, in other words you immediately secure the right to buy the property in future
contractually (you don’t want to rent and then later can’t buy).
• The future purchase price will be at the outstanding amount after paying rent (usually 24 months), calculated
at the price on the date of agreement (today’s value).
• This method is great for especially residential property investment if you are unable to secure finance and it
has the following main benefits:
• While you are in the renting stage, you can sublet the property (make sure the contract allows this) for a
profit to create immediate cash flow.
• You can then sell the property before the renting stage expires, at the future market value at that time, in
other words for a profit (assuming the market grows).
• There are now event financiers that will finance a rent to buy contract, in other words they buy the property
from the seller and you rent to buy from them. This is a great alternative to getting home loan finance and
especially if your credit rating is in the “orange”. You can find these financiers through a basic search on the
internet.

MY TOP TIP:
• When contracting with a seller directly, you can enter into an agreement whereby your
rent starts low and escalates more aggressively on an annual basis, because the seller is
guaranteed a future sale. In this way, you can create “good” immediate positive cash flow.
• You can use one of the other 14 ways for the deposit and a reserve for potential vacancies
and maintenance expenses. There are also now various rental and rental management
companies in the market that will finance a tenant’s deposit. You should never say “I can’t”.

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 14 RENT TO RENT

• I love how investors get creative. With this method, you are creating cash flow without taking ownership of
the property, by renting and subletting to tenants.
• One of my friends and another expert in the industry is renting large commercial office space and then
subletting the space on a shared and serviced office space model. The rate per square meter is obviously
much higher than his rental rate, due to the serviced offices offering. The same concept as renting an
industrial property on a 10-year lease and converting it into storage units.
• The rent to rent method works for almost any type of property investment and is also widely used in the short
term tourism rental market, like AirBnB.
• In fact, another friend of mine is renting a beach front property as his personal residence, which he doesn’t
pay for, because he is renting out two of the rooms on AirBnB and other platforms. Imagine if you could
reinvest what you are paying for your primary home into your property investment portfolio. So, it’s another
way to leverage your primary home without taking out the equity as well.

MY TOP TIP:
• This model works really well when you are renting a single space that you can convert into
a multi tenanted space, be it residential or commercial, e.g. student accommodation or a
guest house.
• When you rent a commercial property, the landlord usually includes what is called a
“tenant allowance”, covering the tenant’s expenses for altering the property to suit his
needs, calculated at a rate per square meter. Boom, owner finance for your rent to rent
refurb.
• Always make sure that your lease agreement allows subletting. Remember there is no
such thing as a standard contract.

15 OTHER

• There are multiple combinations of the above methods that you can use.
• Plus, there a few other and typically more complicated methods not included here, for example structured lending,
mezzanine finance, commercial property finance, vanilla finance, development finance, public and private sector
grants, tax rebates etc. (that’s already 7 more).
• I’m also sure that there are methods that even I don’t know about, or a different application of these methods.
• The best steps to take, is to select one or maximum two of these methods, master them and then take on the next
method, so that over time you are using all the methods. Start small, and scale as quickly as you can – as fast as
your heart desires (not your money).
• I truly believe that this list shows you that there is no excuse and I’m hoping that never again will you lose a deal
due to a lack of access to money.
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 TO END OFF

If anything doesn’t make sense or is confusing in any way…

don’t worry! I’ll be back soon with more great content to
answer any questions in this guide and make it all very-
crystal-clear. So keep an eye out and make sure you read my
emails over the next few weeks.

I would also love your feedback, testimonials and

stories relating to this guide so please email them to
feedback@15provenways.com

See you soon and remember you are only one deal away.

Anton Breytenbach

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 Loan To Value (LTV) Guidelines
Consolidated
Bank Policies

Non FNB – Max loan 20 years

Loan term Max loan term 30 years Max loan term 25 years Max loan term 30 years
FNB Clients – Max loan term 30 years

Purchase price Non-ABSA clients ABSA clients Purchase price Non-FNB clients FNB clients Purchase price Purchase price SBSA & Non SBSA Clients

Ordinary loans – SA ≤ R3m Max 100% Max 100%

Citizens living and
working in SA – Full  R3m - ≤ R5m 100% considered 100% considered ≤ R3m Max 100%
time employed at Credit’s at Credit’s ≤ R2.5m Max 100% Max 100% ≤ R5m Max 100%
discretion discretion > R2.5m - ≤ R3m Max 95% Max 95% > R3m - ≤R5m Max 100% (will be referred to
> R3m Max 90% Max 90% >R5m Bank to Assess credit for intuitive assessment)
90% 90%
 >R5m

(Requests for 100% in the >R5m price range will be If a First Time Home Buyer - 105% may be considered.
referred to credit for assessment) Purchase price & loan amount not to exceed R1.8m if
105% is required. i.e. if the purchase price is R1.8m, costs
cannot be included.

≤ R3m Max 100% Same as Ordinary loans Same as Ordinary loans

Private Clients
> R3m - ≤ R5m 100% considered at Credit’s RMB Criteria would apply SA Citizens living and working in SA – SA Citizens living and working in SA –
Full time employed
discretion Full time employed Full time employed

Purchase price Non-ABSA clients ABSA clients Purchase price Non-FNB clients FNB clients Purchase price Purchase price SBSA & Non SBSA Clients

Ordinary loans – SA
Citizens living and ≤ R3m Max 100%
≤ R2m Max 90% Max 90% ≤ R2.5m Max 100%
working in SA – Self < R3m Max 95%
> R2m - ≤ R3m Max 85% Max 85% Not considered R2.5m - R4m Max 90%
employed > R3m Max 90% > R3m - ≤R5m Max 100% (will be referred to
> R3m Max 80% Max 80% R4m - R6m Max 70%
credit for intuitive assessment)

105% costs inclusive not applicable

Same as Ordinary loans

Private Clients ≤ R2m Max 90% Same as above
RMB Criteria would apply SA Citizens living and working in SA –
Self employed > R2m - ≤R3m Max 85%
Full time employed
Non-Nedbank Non-SBSA
Purchase price Non-ABSA clients ABSA clients Type & LTV Criteria Applied Purchase price Nedbank clients Purchase price SBSA clients
clients clients
≤ R3m Max 70% Max 80% PTY LTD with Shareholding less than 19% ≤ R3m Not Max 100%
> R3m Max 65% Max 75% (Full time employed LTV’s apply) Considered
> R3m - ≤ R5m Max 100% (will be
referred to credit
PTY LTD with Shareholding more than 19% for intuitive
(Self employed LTV’s apply) Must be self- employed and normal Self -employed
Legal entities or 3 assessment)
criteria will apply. The Legal Entity’s primary bank
participants or more
account must be with Nedbank.
Closed Corporation
(Self employed LTV’s apply)
105% costs inclusive not applicable
Trust
(Max 80% LTV if surety is Juristic Trustee)
Legal entities – less No lending to trading entities.
Same as above Same as above Same as above
than 3 participants Non trading entities will be considered.
 Loan To Value (LTV) Guidelines
Consolidated
Bank Policies

Property Value Non-ABSA clients ABSA clients

Further loan – ≤ R2m Max 100% Max 100%

Ordinary – Full time > R2m - ≤ R3m Max 90% Max 90%
employed > R3m Max 85% Max 85%
Direct Channels only Direct Channels only Same as ordinary loan
Property Value Non-ABSA clients ABSA clients

Further loan – ≤ R2m Max 90% Max 90%

Ordinary – Self > R2m - ≤ R3m Max 85% Max 85%
employed > R3m Max 75% Max 75%
Ordinary and Building
loans. Excl Further Non-ABSA clients ABSA clients
advances Same as ordinary loan
Direct Channels only Direct Channels only
Further loan – Legal ≤ R2m Max 70% Max 80% 105% costs inclusive not applicable
entities/More than > R2m - ≤ R3m Max 70% Max 80%
two applicants > R3m Max 65% Max 75%
Purchase ABSA Purchase Non-FNB FNB Purchase Non-Nedbank Nedbank Purchase
Non-ABSA clients SBSA & Non SBSA Clients
Price clients Price clients clients Price clients Clients Price

Max 100%
≤ R2m Max 90% Max 90% Same as Ordinary loans – ≤ R3m
Building Loans – Non < R3m Max 90% Max 90%
> R2m - ≤ R3m Max 85% Max 85% SA Citizens living and working in SA –
Development > R3m Max 85% Max 85% Max 100% (will be referred to credit
> R3m Max 80% Max 80% Full time employed > R3m - ≤R5m
for intuitive assessment)
105% cost inclusive not applicable

Approved Developments Approved Developments Approved Developments Approved Developments

Building Loans –
Approved 100% considered at credits discretion on all plot & plan building
Developments developments approved by ABSA. Development approval Same as Building Loans – Non-Development Same as Building Loans – Non-Development Same as Building Loans – Non-Development
package letter must accompany the application.

Purchase ABSA Purchase Non-FNB FNB Purchase Non-Nedbank Nedbank Purchase Non-SBSA SBSA
Non-ABSA clients
Price clients Price clients clients Price Clients Clients Price Clients Clients
≤ R2m Max 80% Max 80%
Further Building Loan < R3m Max 90% Max 90%
> R2m - ≤ R3m Max 70% Max 70% Direct Channels Only Same as building loan
/ Legal entities > R3m Max 85% Max 85%
> R3m Max 65% Max 65%
Ordinary and Building
ABSA
Loans. Excl Further Non-ABSA clients
clients Second Properties:
advances Normal LTV’s to apply based on client’s risk Normal LTV’s to apply based on client’s risk and
90% - if first property is bonded at Nedbank
Buy to Let (Fully ≤ R2m Max 90% Max 90% and application score application score
80% - If first property is bonded at other banks
Completed > R2m - ≤ R3m Max 85% Max 85%
Properties) > R3m Max 80% Max 80%
Purchase price / ABSA
Non-ABSA clients No lending to trading entities. Second Properties:
Property valuation clients
Non trading entities will be considered, 90% - if first property is bonded at Nedbank Normal LTV’s to apply based on client’s risk and
Buy to Let – Legal ≤ R2m Max70% Max 80% normal LTV’s to apply based on client’s 80% - If first property is bonded at other banks Must application score
entities / More than > R2m - ≤ R3m Max 70% Max 80% risk and application score be self- employed
two applicants > R3m Max 65% Max 75%
 Loan To Value (LTV) Guidelines
Consolidated Bank
Policies

• LTV 60%.
• Maximum LTV 60% • Maximum LTV 60% • Minimum land size 120Sqm.
Vacant Land • Minimum land size 150Sqm • Minimum land size 150Sqm Lending on vacant land not considered • Maximum land size – not stipulated – assessor will
• Maximum land size 25 Hectares • Maximum land size 8.5 Hectares confirm.
• 105% costs included not applicable

Same as Ordinary loans – Non Nedbank clients – Maximum LTV 50%.

SA Citizens working SA Citizens living and working in SA – Max LTV 50%. Nedbank Clients – up to 80% LTV depending
abroad If FNB banked, might consider 85% LTV. Max LTV 70%
Full time employed on client’s risk profile.

Temporary Residents Max 80% LTV will apply in the following instances;
with passport and 1. The applicatiion is a joint application and the main
Temporary residency income earner is a SA Citizen – the temporary
permit, authorised to be • Max LTV 75%
resident must be the co-applicant and the lower
in the country to either Same as Ordinary loans • Must be FNB primary banked for a income earner. Max LTV 50%.
work, study, reside with SA Citizens living and working in SA - minimum of a year Where SA citizen and temp resident is applying jointly,
the spouse be self Full time employed 2. Proof must be supplied of the Temporary Resident may consider 75% LTV.
• Temporary resident permit must have a remaining having a bank account at any SA Bank. If the
employed. term of 3 years Temporary Resident is unemployed, no proof of listing
with a bank is required.
3. If employed Valid work permit is required

Same as Ordinary loans

Refugee with Maroon SA Citizens living and working in SA -
ID Not considered Not considered Not considered
Full time employed

Foreign national Max LTV 50%

(Individual with no It is not a requirement to bank with FNB as long as the
Max LTV 50% Not Considered Max LTV 50%.
permanent residence in debit order can be serviced monthly through a SA
SA, no work permit) banking account, it is acceptable.

• Applicants with a permanent residence certificate

and no green bar coded ID or Smart ID card, 50%
Permanent resident with LTV will apply. FNB primary banked customers only
permanent resident Same as Ordinary loans and Smart ID must be provided prior to final grant. Same as Ordinary loans SA Citizens living and working in Same as Ordinary loans SA Citizens living and working in
permit or green SA Citizens living and working in SA - SA - Full time employed SA - Full time employed
barcoded ID/smart ID Full time employed • Permanent residents with Green Bar Coded ID or
card Smart Id - Normal lending criteria to apply as per
client or loan type.

• Cash deposited with the bank and ceded to the bank.

• Investments at other banks and ceded to the bank.
• Cession of a life insurance policy with a confirmed
surrender value.
Approved Collateral Not considered Not considered Not considered
• Collateral provided in terms of an approved group
scheme (Pension backed/company guarantee)
• The cession of tangible collateral security being
accepted as an “equity/deposit” requirement in the
Absa Home Loan process

Life Cover compulsory on all Joint and Individual

Home Loans with a principle loan amount up to and Life Cover not compulsory on a Home Loan without an
Life Cover Optional including R1m (excluding One Accounts). Life Cover Life Cover Compulsory on all loans up to R600 000. Access facility. Compulsory if there is an Access
compulsory for all applicants on a joint Home Loan facility.
for the principle loan amount.
 Affordable housing guidelines
Consolidated Bank
Policies

Loan term Maximum 30 years Minimum 5 years, Maximum 20 years Maximum 25 years recommended Maximum 30 years

Product My Home Smartbond No specific product Dream Start/Jumpstart

Limitations on all loan types

For costs to be included, applicant must be a first
time home buyer and the purchase price and loan
Vacant land, Self-Employed, Multiple Applicants,
Limitations Only residential property finance Vacant Land not considered amount cannot exceed R1.8m – if the purchase price
Non-Resident/Temporary Resident Applicants,
is R1.8m, costs cannot be included.. Applicable to
Juristic Entities and Contract workers to be
ordinary loans only.
referred to FNB Home Loans

Income between R3 500 and R24 300 (Gross Single

Maximum income R25 000 gross Individual or joint Maximum income per individual R25 000 gross, Maximum income R24 300 gross individual or joint
Income or Joint income)
income not to exceed R50 000 gross joint income. income

Not applicable as long as applicant is permanently

Minimum employment period 12 Months – Not limited to current employer 6 Months – no probation period 12 Months – Not limited to current employer
employed

Minimum and maximum loan Minimum Loan amount R20 000. Minimum Loan amount R100 000. Minimum Loan Amount R100 000.
Minimum Loan Amount R50 000.
amount Maximum Loan amount R650 000 Maximum loan amount based on affordability Maximum loan amount based on affordability.
Maximum loan amount based on affordability
• Maximum purchase price R650 000
• Developments approved by FNB Housing • Maximum Purchase Price R760 000 • Up to 100% LTV considered
Finance maximum purchase price R750 • LTV 90% - 100% • If a First Time Home Buyer - 105% may be
000 considered.
• 110% may be considered for applicants earning • Purchase price & loan amount not to exceed
• Fulltime employed - Max LTV 100%
Ordinary loans between R12 000 & R299 999 PA. Also R1.8m if 105% is required. i.e. if the purchase price
• Self employed - Max LTV 80%
applicable to Young Professionals in this income is R1.8m, costs cannot be included.
bracket under the age of 35 in the following
professions – Actuary, Advocate, Architect,
Attorney, Chartered Accountant, Engineer,
Medical Doctor.

• Fulltime Employed Max - LTV 90% • Maximum LTV 100%. • Maximum Purchase Price R760 000 • Up to 100% LTV considered
Building loans
• Self Employed - Max LTV 80% • 110% not applicable on building loans. • LTV 90% - 100% • 105% not applicable on building loans.

• Fulltime employed Further Advance Ordinary Max • Further Advances payable through Housing
LTV 100%” Finance Minimum loan amount of R20 000.
• Self employed Further Advance Ordinary Max LTV • Required Documents: latest rates & taxes
80%”
account, payslip, 3 months bank statement, • Up to 100% considered
Further loans Direct Channels Only
• Fulltime employed Further Advance Building Max application form. • 105% not applicable on further loans
LTV 90%”
• Self employed Further Advance Building Max LTV
80%”
 Affordable housing guidelines

Consolidated
Bank Policies

Termination age of
Bond must be settled by age 75 65 years next birthday 75 years next birthday 65 years next birthday
bond

Variable rate offered. Fixed rate to be applied Variable rate offered. Fixed rate to be applied for at Variable rate offered. Fixed rate to be applied for at
Pricing for at branch after registration. Variable rate or 3 year fixed rate option.
branch after registration. branch after registration.

Compulsory for all customers with bonds in excess of

Borrowers Education Compulsory for all First Time Home Buyers. Compulsory. Compulsory.
80% of the property valuation.

Compulsory.
Home Owners cover Compulsory. (Customer can provide own cover provided it meets Compulsory. Compulsory.
the terms and conditions of the bank).

Compulsory.
“Home Loan Protector Plan” compulsory with an option for
Life Cover (Customer can provide own cover provided it meets the Compulsory for all loans up to R600 000. Compulsory.
Permanent Disability.
terms and conditions of the bank).
Cover 35 – 60% of property value.
Loan Cover Refer collateral - CRIS Free 6 month retrenchment benefit – limited to 2 claims
over bond term.
Approved Collateral FLISP accepted. FLISP accepted. FLISP and AFD accepted. FLISP accepted.