Welcome to iTrade Properties Ltd
Samuel Njenga graduated as a computer scientist at the Jomo Kenyatta University of Agriculture and Technology (JKUAT) in 2003. Like his peers, the degree was supposed to secure him a well-paying job.
Luckily, it did. Njenga was in the public sector for nine years before restlessness set in. He wanted more out of life. So, with four like-minded friends from college, they began saving Sh5,000 a month. This they did for five years before they decided to invest the savings in stocks.
Later, they would liquidate the stocks and buy a piece of land in Membley, Kiambu County. And that is how Itrade Company Limited, a real estate firm was born. The firm is now valued at hundreds of millions of shillings.
Njenga finally quit employment in 2013 to take on the role of managing director. The real estate firm now has a construction arm, land and property management division, as well as a hardware business.
What are some of the projects the firm is currently handling?
We are currently selling tracts of land in Ruiru, along Kangundo Road, Kisaju and Nakuru. In addition, we are constructing 70 apartment units in Kinoo with an asking price of Sh9 million a unit.
How do you grow from a small plot in Membley to high-rises?
We had a vision for where we were headed and we worked really hard at it. We had set short-term goals for the first year, medium-term goals for about five years and long-term goals that go up to 15 years. We realised that we wanted to build a real estate business.
Even to us, it sounded like a lot of work with very limited finances but we were determined. We saved for a year, then invested in stocks, then liquidated the stocks to buy a plot, then saved for another and here we are. Any dream is achievable to someone with vision.
What is the one thing your entrepreneurship journey has taught you about money?
That saving money for the sake of saving will not translate into financial independence. To be of any help, saved cash must be invested. In our case, we realised that just keeping our monthly savings safe in an account was counterproductive. Inflation would eat into our money.
Money lost through inflation can be the difference between buying or building your own house and being a perpetual renter.
In Kenya, inflation normally stands at three to five per cent. One can counter the inflation by saving or investing in a scheme that can give you between six and 10 per cent rate of interest. At the beginning, stocks was that scheme for us.
How does one know when to hang on to a business or let go?
Starting a business might be the easy part, sustaining it is another matter altogether. Businesses take time to mature and become profitable. Although this varies from business to business, you should expect some turnaround within a year or two.
If more time elapses, then it might be prudent to rethink your strategy. Also, one thing that helps one through this teething period is for one not to be quick to upgrade lifestyle.
When we started out, I sold our plots to buyers without a car since it was not a priority. It helps to find a role model who is ahead of you financially to give you frank financial advice.
How does one choose the business partners who won’t fall away mid-stream?
You have to be sure that you all have shared goals towards financial independence. Our partnership was a meeting of minds that shared similar goals from the time we were in college. It helped that we were friends too.
We read from the same script and aligned our individual aspirations to those of our collective vision. It is important for partners to be involved in all key decision-making processes of the company.
Then, they must play an oversight role rather than just leave this to the management team. If that synergy is lacking, the business will incur irreparable damage regardless of how noble your vision was.
If toying with getting into real estate business, what does one need to know?
Two things; first being that real estate is a tricky field to get into. The country’s economy is a key indicator of how real estate behaves. For example, people can only buy a house after satisfying other essentials. In lean economic times, real estate investment is not a priority for many.
Secondly, in real estate ventures, mistakes can be costly. For example, failure to do due diligence on some property can even put you in a legal and financial quagmire. You might buy a piece of property that lies on a road reserve or other social amenities.
Just searching for the property in a lands office may not reveal all there is about the property. You may need to consult the physical planning department to see the bigger picture with regard to future amenities.
What advice would you give to starters?
Start saving small amounts while keeping the big picture in mind. In our case, we started out like a small chama of five. This was in 2005. We could only spare Sh5,000. Now, suppose 10 young people with a vision came together and saved Sh2,000 per month from their allowances? That would be Sh240,000 at the end of the year.
The initial savings may look small but put together that can form a giant investment vehicle. In addition, keep reviewing the vision to see that it is still aligned to your initial goals. When I was employed, I would always save 20 per cent of my salary.
Insider tip on owning a home?
If you want to own a home and can’t outrightly pay all the money, buy two or three small plots, wait for some capital appreciation, then sell two and build in one. You will own a home without a mortgage that can tie you down for a long time.
Link: The Standard Newspapers
Land buying should be as easy as our 1, 2, 3’s but unfortunately, that may not be the case if you don’t know what to watch out for and what to consider when buying your prime plot.
The Procedure of buying and transferring the Interests of a piece of Land in Kenya is as below:
1. Identify the piece of land that you wish to purchase. Ensure that the beacons of the land are cleared marked and it is absolutely clear to you where the boundaries are.
2. Perform an official search of the piece of land at the District Lands Office or the Ministry of Lands (Ardhi House) depending on whether the Title Deed of the subject land is registered under the Land Registration Act (LRA) or Registration of Titles Act (RTA) respectively. If the LRA, the search can be only be done at the District Office and if its RTA, it can be done at the District Office or at Ardhi House. To Perform the Official Search, you will need a copy of the title deed of the land and you must fill the search application form and attaché the title.
In some District Land Offices, copies of your ID and Pin Certificate are required. You shall be required to pay Kshs 100 fee for the process. A search should ideally confirm that:
a. The person selling the land to you is the legal owner.
b. The land has no encumbrances that may include a charge by the bank, a caveat restricting sale of the land amongst other issues.
If all the above is positive, then proceed to the next stage.
3. In cases where the land is registered under Registration of Titles Act (RTA), Obtain Rates Clearance Certificate from the Local Municipal Council and Land Rent Clearance Certificate from the Commissioner of Lands. Seller’s lawyer ordinarily obtain the Rates Clearance Certificate from the Local Municipal Council and costs KES 2500.
4. Your Lawyer can proceed and prepare a sales agreement in liaison with the seller’s lawyer. An agreed upon deposit can then be paid to the Vendor.
5. The Vendor is thus obligated to prepare all the completion documents to ensure a smooth transfer. The Completion documents will include:
a. Original Title in the name of the Vendor
b. Duly executed transfer forms in triplicate (must be sealed if a company is selling)
c. 3 Passport Photos of the Vendor if it’s an individual and if a company, then 3 photos each of 2 directors of the company
d. Copy of Pin Number of the Vendor
e. Copy of National ID of the Vendor and if a company copies of National IDs for 2 directors who’ll sign the transfer forms.
f. Copy of the registration Certificate if it’s a company.
g. PIN Certificate of Company
h. Rates Clearance Certificate (In Case the tenancy of the land is leasehold)
i. Rent Clearance Certificate (In Case the tenancy of the land is leasehold)
6. Pay the remaining balance in exchange of the Completion documents. Your lawyer should confirm that the documents are authentic and must certify the documents before presentation to the relevant Lands Registration Office
7. File the draft transfer (i.e. completion documents) at the Lands Office for assessment of stamp duty payable on the transfer. Other than the aforementioned documents, the buyer must attach his copy of ID, passport photos and copy of PIN. If the buyer is a registered company, then the copies of IDs, passport photos and personal PIN of 2 directors must be attached. In addition the PIN Certificate of the Company.
8. Once the draft duly executed transfer form has been filed at the land office, an inspector visits the site to verify the development and state of the property. Due to lack of transport, in practice, the inspector often has to be picked up in person and driven to the site. There are no prior appointments made and the actual inspection may happen within one day or, in the worst case, one month. However, note that this time is not limited and in some cases entrepreneurs may wait months for a valuation.
9. Payment of Stamp Duty is then done. The fees are 2% or 4% of the Value of the land depending on whether the land is within or outside the Local Municipality. The Value of the land used to calculate the stamp duty is given by the government valuer which may not necessarily be the same as the purchase value. Stamp duty is paid by depositing the amount in an account provided by the Land’s registry office. It is mandatory to pay the stamp duty using the above mode.
10. The registration is done with issuance of a new Title deed (for freehold tenancy) or Certificate of Lease (Leasehold tenancy). The buyer’s lawyer or the buyer then collects the Title Deed at the Lands Office.
Other necessary Procedures
1. The purchaser must have been showed the beacons of the Property in question.
2. The Purchaser is advised to use a Land’s Surveyor to ascertain that the Property in Question is the Physical one he/she has been shown
During this period of which we have been selling property, one thing that has come out very clearly is that the process of purchasing land and ultimately building and actually living in it takes time and money.