Real Estate Investor Magazine South Africa May/June 2015 | Page 14

generator by increasing its value
multiple times and by increasing
the value of the rental income.
Dolf says you can’t do that
with residential property or with
standard commercial property.
He therefore buys property with
a twist, including fish and chip
shops, dairies, vineyards, veterinary
surgeries, convenience stores, barber
shops, strip malls, light industrial
facilities, car paint facilities, funeral
parlours and selective office and
storage facilities.
One must know how, he says, to
acquire an empty building and fill it
with tenants.
He
believes
that
doing
nothing is more risky than doing
something. The global financial
crisis has brought about massive
opportunities in the US, particularly
in Phoenix, Arizona, and in Las
Vegas, Nevada, which boast higher
population growth and capital
growth than the national average
and are the best performing
property markets in the US.
These markets have attracted
massive interest and investment
from Brazil, China, Canada,
Australia and New Zealand,
because the properties have low
price points.
Many Australians have come to
the US to implement fix-and-flip
strategies, buying low and selling in
about four or five months to spin
quick cash. Some investors made
instant profits of $20 000 to $40
000, using the strategy to build
cash flow, as they have no capital
reserves.
Of course, they faced a different
problem when they had to fork out
tax on the capital gain.
Dolf still swears by the buy-andhold strategy, noting that it is was
harder to flip properties in 2013 as
prices were rising by, for example,
10% per month in Phoenix.
12

MAY 2015 SA Real Estate Investor

Property prices plummeted
in both Las Vegas and Phoenix,
as a result of the global financial
crisis. Little new housing stock
has come onto the market because
replacement costs are high. With a
growing population, more people
are living together including newly
married couples that continue to
live with their parents.
This is in part due to foreclosures
and poor credit records but when
the economy turns many of these
people will want their own homes
and demand will soar.

“Know how
to convert
an ordinary
building into an
extraordinary
income
generator.”

a big difference, so Dolf suggests
investing a little in the less costly
improvements that make a better
first impression, such as a fresh coat
of paint or a new front door.
The opportunities
Dolf always invests where there is
good population growth. He also
saves by going green. For example,
he has just converted the lighting in
a commercial building from general
incandescent and fluorescent to low
cost solar technology low energy
lighting. The conversion cost
$7 000, but thanks to a $6 200
subsidy the net cost amounted to
only $800, with an annual saving of
$1 000 a year.
In addition, the excess power
can be sold back to an electrical
company
By using paint that reflects
98% of heat radiation, energy
consumption can be further
reduced by 30%. There are many
other energy efficiency methods
investors can offer tenants that give
massive value over the long term.
Dolf advises it is wise to buy at
least one offshore property in the
US now, saying that the low price
points that currently exist will
never be repeated in this lifetime.
Single-family homes are available
at the lowest prices ever seen.
Dolf says the Las Vegas jackpots
are not in the casinos but in the
suburbs! Vegas offer a low cost of
living, low taxes, a warm climate,
great food and entertainment. As a
result, new residents are pouring in
from around the country.
Dolf ’s life philosophy is simple,
but powerful: “Life is what you
make it. The only meaning in life is
the meaning we give things.”

Dolf names Phoenix and Las
Vegas as the top two performing
cities over the last 45 years. He says
that single-family homes are the
best bet over the long term because
they hold value and are easier to
manage, compared to communal
living properties where multiple
tenants can create disharmony.
However, Dolf advises investors
to look for properties with a twist
or that offer the potential to add
value, such as properties with big
bathrooms or
RESOURCES
space to build
a garage. Small
De Roos, D and Sutton, G. ‘Real Estate Investment
details
make
and Management’ (2003), Success DNA Inc.
www.reimag.co.za