29th October 2015
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Dinara Developers Ltd owner Andrew Kamau
The following profile was first published in the Daily Nation.
For 31 year old Kenyan Andrew Kamau, selling building materials was all his day’s work diary would read a few years ago. The city’s high-end estates — Lavington, Kileleshwa and Runda — provided him with a reliable stream of customers.
“I used to supply sand, ballasts, stones from Ndarugu quarry and from the little earnings, I was able to raise Sh300,000 savings,” said Mr Kamau, adding that in 2009 a piece of stone was going for Sh36 and he would sell about 1,200 units in a good day.
Armed with his savings, Mr Kamau bought a two-and-a-quarter-acres at Makongeni, in Thika at Sh3.5 million. He paid Sh350,000 deposit and after sub dividing it, he sold the plots, paid the land owner the balance and made Sh3.5 million profit.
Buoyed by the impressive returns, he shifted gears and started buying land, constructing houses and selling them. His first housing project was near Kenyatta University where he bought half-an-acre and built 49 bed sitters on half of the plot and sold the other to finance the construction. The units sold at Sh250,000 each earning him over Sh12 million.
DUST TO RICHES
And at the age of 27 years, he built his first residential house, a two bedroom unit, which he sold at Sh1.6 million. Today, Mr Kamau, 31, is the brains behind Green View Apartments, Diamond Heights in Kikuyu, Mashariki Park Project, Mazuri site Apartments in Thika, Kajiado and a multi-million shillings 36 house units project at Thindigua on Kiambu Road.
At Dinara Developers Limited, the real estate company he started in 2009 that he runs together with co-director Francis Wachira Muguku, he says, apartment prices range between Sh2.5 million for a one bedroom house and Sh12 million for a three bedroom unit.
“I make between Sh20 million and Sh25 million per month. Real estate is the place to be,” he says. His tale can be best described as dust to riches story that has seen him set Nairobi’s thriving real estate business alight.
“I want to remove this notion among young people and the old generation that one can only be a millionaire and own a house at a certain age,” he said at his 2,500-square-feet office at Sound Plaza on Woodvale Groove, in Westlands, Nairobi.
Last year, when he went searching for land in Kiambu County to put up houses, he bumped onto a landlord who was selling a three-quarter acre at Sh70 million. However, he was shocked when the seller refused to accept his fat pay cheque.
“She looked at me and asked, ‘young man, when did you start working to amass such wealth?’ I was shocked,” said the alumni of Thika HIGH SCHOOL.
He says this is one of the most irritating question he keeps getting while transacting millions of shillings, especially with the old generation.
But where did he raise the Sh70 million? “The proceeds were raised from 169 apartments, which we constructed last year at Thika and sold at Sh2.5 million each. We raked in over Sh400 million,” said Mr Kamau. He said phase two of the project — where 250 units will be set up — is in the pipeline.
Mr Kamau attributes his success to having a stable family: “My wife, who was my client before I married her, has contributed immensely to the success of this firm. When I am faced with tricky business challenges she is always there to listen to me,” says Mr Kamau
Besides a strong family support, he says he has learnt that honesty is vital.
“If you say the size of the house is 100-square-feet, you must deliver that size because anything short of that is outright theft,” he said. So what keeps him going?
“Doing a clean business. Without being honest, you won’t last long and this is what I strive to achieve every day. I value my customers and their feedback.”
His future plan is to develop his office block within the city. “Our monthly rent is Sh400,000 but this will be a thing of the past in the next two years as we shall put up our own office block,” he said.
The developer is targeting Thika, Kikuyu, Gitaru, Thindigua, Ruiru and Kajiado to put up housing units this year. As it seeks to cement its presence in the real estate sector, Dinara Developers has set its sight on listing in the Nairobi Securities Exchange by 2030.
House buyers at Dinara Developers are not required to pay any deposit and it is this unique business tactic that has seen the entrepreneur build an empire whose current estimate value is in excess of Sh1 billion.
“The dream of many people is to own a house but what they lack is deposit. At Dinara Developers, if we are constructing a house within 18 months or any period, we ask you to pay whatever amount within that period and this is what has attracted many customers.”
Surprisingly, Mr Kamau said that his company has never sought a bank loans.
“We plough back our profits. We have deliberately avoided bank loans because of the high interest rates, which will obviously be passed on to the customers. In the past two years we have earned very little as a company because huge chunk of Sh300 million profits we make per year is invested back in our projects,” he added.
The firm whose name means rich in Russia also owns a fleet of lorries, which transport building materials from its quarries, further cutting down the cost of construction.
CHALLENGES
Like other players, Dinara Developers is grappling with inadequate skilled manpower. The company started with three staff and now has employed 40.
However, its biggest challenge has been impromptu change of policies by corrupt county government officials.
“One day a county official tells you that your lorry should not carry more than 20 tonnes of stones beyond a certain point. The other issue is the re-zoning, which has disrupted our building plans, costing us millions of shillings,” he added.
The most unique hurdle, however, is the lack of trust from land owners, who dismiss him as a young person not worth conducting huge business.
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http://bizna.co.ke/31-year-old-kenyan-who-makes-sh-20-million-on-a-bad-month/