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How a charismatic Serbian discovered the ultimate secret to South African property investing

by , 22 March 2016

Igor Marinkovic is a self-made millionaire property investor who captivated the audience at the FSP Invest Symposium 2014.

But it's not his exotic name or thick Serbian accent that caught the attention of the delegates.

In fact, unlike the other speakers, he didn't even have a fancy PowerPoint presentation. He merely used two pages of a flip-chart paper to explain his simple, yet highly effective property investment strategy.

But when he opened his mouth, the audience hung onto every word he said: His strategy for
building wealth from property was so simple, yet so profound no-one could look away...

But I'm getting ahead of myself, before I reveal the strategy Igor used to build a 50-property
investment empire, let me take a minute to tell you where he came from…

From Serbia to South Africa – Discovering every property investor's dream
 
Despite taking criticism from his friends and family for making this drastic move, Igor came to South Africa 14 years ago.

He didn’t have much knowledge about the country, the investment environment or even the society he was coming to. But he didn’t allow this to stop him from following his dreams.

At this point, he was still following the socially acceptable way of doing things. He was on track to get his MBA and PHD in electrical engineering, because everyone told him he needed these qualities to take his career to the next level.

But Igor knew doing this would help him to become financially free. As a contrarian thinker, he knew that he had to do something different if he wanted to build a substantial fortune. It’s this different way of thinking that helped Igor to find his true passion – property investing.

One day while browsing through a bookstore, he picked up the book, “Rich Dad, Poor Dad”.

He was captivated and read it from cover to cover... Igor was inspired.

All he wanted to do was invest his money immediately. But he still didn’t know exactely where or how to do this…

So, he began looking around, asking traders, investors and property owners, how and where to invest for the biggest returns. It’s this determination and passion for investing, combined with his enthusiasm to learn more, that eventually led Igor to find a mentor, who already had a very successful property portfolio in place.

“If he can do it, why can’t I?”

Igor’s mentor was the grandfather of one of his friends, and he had a similar story to Igor’s own. He also came to South Africa with nothing in his pocket yet still managed to build a multi-million rand property investment portfolio despite being both a foreigner and a dyslexic.

This got Igor thinking, “If he can do it, with far greater disadvantages than I, why can’t I?” By learning from his friend’s grand-father and studying his every move, Igor gained the necessary knowledge to start his own property investment career.

Today, Igor owns more than 50 properties and he’s well on track to surpass his mentors’ success. So I’m sure you’re thinking – What is the strategy behind Igor’s property empire? Well, as promised, here it is…

Igor’s five secrets to building a property empire
 
#1: Make your own decisions – Listening to someone else won’t make you money
 
Igor started by looking for opportunities in areas he wanted to invest in and by looking at the anomalies in the South African property market.

He questioned why properties in Sunnyside and Hillbrow were going for R250,000, while properties in neighbouring areas were going for R500,000.

When he told people, there were opportunities for property investments in Sunnyside in Pretoria and Hillbrow in Johannesburg, people looked at him as though he was crazy.

They said “Don’t you know in these places you will get killed, and hijacked, you know you won’t make it out alive!”

He responded, “Have you ever been to Sunnyside or Hillbrow?” “No I haven’t, but I’ve heard bad stories about those places” was the reply.

You see, a lot of South Africans have this idea that certain places, especially CBD’s, are too dangerous to even go in, never mind start a business or invest in property. But I think it’s wrong to judge an investment based on small talk.

This is where Igor used his brain. He went to those “dodgy” areas to find out for himself, what was going on and if it was as bad as people made it out to be. He made his own mind up; he listened to himself and believed there were great opportunities ahead to buy property.

In his own words he said, “You must realise central business districts (CBDs) are not just full of Nigerians selling drugs or guns out of every building”.

He went on to point out that PHD students, doctors and university lecturers live in the CBDs of South Africa. He had spotted an opportunity where no-one else did.

#2: Stick to your guns
 
Igor started by buying one property in Sunnyside and after his first year, he had grown his
property portfolio to 10.

With this, his confidence started growing. However, he didn’t get too cocky about his success and he stuck to his strategy as property prices in Sunnyside began to rise.

For example: When two bedroom flats that were previously going for R200,000, were now going for R400,000, he stopped buying, realising it had become too expensive.

#3: As interest rates go up, start buying!

Igor describes the best time for property investors to buy, is when the interest rates go up.

High interest rates forces people who can’t afford to hang onto their properties, to sell for a cheaper than market-value price.

This is beneficial to the property investor, because you can make a big profit if you buy low and sell high. So, in 2008-2009, when the interest rate jumped to 15%, and the banks put many properties out at low prices, Igor grabbed this opportunity to buy more.

Now he has 50 cash-positive properties that pay for his house, his kids’ school fees, his car... everything!

#4: The secret of ‘owners finance’ revealed Igor says, “If you sit in this room, you won’t find it, you have to get up, go outside and look for them. They’re not going to fall in your lap.”

This is exactly what Igor did…

During the 1990’s, Igor discovered a concept known as Owner’s Finance.

He approached a person selling his property in Sunnyside for R200,000. Igor offered to pay R170,000 over three years at prime interest rate on condition he could take ownership of the flat, pay all utilities, pay for the cost of renovations and the levy. The total upfront cost for Igor was R1,800 per month.

Igor then found a tenant who agreed to pay him R3,500 a month. His net cash-flow from renting the flat was R1,700 from day one. This meant that Igor made R60,000 profit over the three year repayment term.

Effectively, at the end of the term, Igor had to pay back R110,000. That means that in the end he bought the flat for HALF of what it was worth!

Igor wouldn’t have found this great deal sitting in his office… He had to go out there and make it work.

#5: Educate yourself – Focus on one market!

There is a famous quote by Bruce Lee, “I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10 000 times”.
 
Likewise, Igor built his empire by focussing on one investment opportunity at a time. Igor believes that before choosing to invest in your desired market, you must learn everything you can about your chosen market and speak to as many experts as you can in the same field.

Igor himself made it his mission to become an expert in a very specific property niche; specifically investing in cheap rental properties in traditionally ‘undesirable’ CBD areas in Gauteng.

The point is, it’s important to study all the ins and outs about any particular investment you wish to pursue.

After all, as Igor said, “The most expensive piece of real-estate in the world is the five to six inches between your left ear and your right ear.”

Knowledge brings you wealth


Joshua Benton
MoneyMorning Managing Editor, FSPInvest


How a charismatic Serbian discovered the ultimate secret to South African property investing
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