Multi Million Dream borne of Kshs 5,000

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 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. 

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