Residential flats, How to get financier + ensure financier doesn't screw you!


Slightly Long Post, Lakini Nisaidiwe tafadhali…
You have Land at a prime place, you are thinking of developing it to residential flats so that your kids and probably your kids’ kids can go to decent schools and have a meal on the table, like a retirement plan or just so you can stop waiting for 39 Days for Mhindi’s Peanuts, that will allow you to eat chapo dondo extra and make headline like that woman who got arrested for defecating on Her Boss’s Desk, Show up in crocs, shorts and a vest to deliver the Resignation letter or just show him the 2 finger peace sign and tell him its been real…
the for hard bit, getting a Financier + Contractor, you need about 70-150M for the project that will take say at most 2.5 years to complete, You want the bank to collect rent for the lower 2 floors to repay the loan and leave you with the upper 4 floors to survive with your family and be a respectable sponsor. Doable?

Q - How do people navigate this bit successfully? Which Financial Institution? which pool of contractors to choose from? Hii ni Nirobi, staki kuchanuliwa…

if worst comes to worst, how do you ensure the Banks don’t screw you like Matiba? Like if you get to the edge and cannot make the repayments, how can you ensure that from the onset of the project the financier will not Send auctioneers or repossess the land.

At the end of the day, that you don’t lose that Land, you want to keep Ancestral land untouched.

Maoni? What to do? Who to talk to?

Mbisha in my head

Good plan but the plan in your mind, photo attached is lousy .
Jaribu a better house plan, I mean 70-150m can usually build you something better.
Apartment style, will look more presentable , as you say you on prime land. Act like it , wacha hizi house design za dandora.
Uplift the face of the neighbourhood, it’s already scattered with trashy looking designs and buildings.
I always thought it’s the architects who were useless bringing up crappy designs , kumbe ni requests kama hizi.


But i had the same thoughts. As far as banks go, nowadays some arent taking title deeds as security. They want you to come up with at least 20% of the total cost of the project. They finance the other 80%…and you will start repaying back almost immediately even though you are still digging the foundation.

Also, why is your contractor taking 2.5yrs to complete the project? Kwani anajenga Two Rivers?

Buda, Issue hapa si design… issue ni kuget financier na kumake sure financier doesn’t screw you + contractor ata deliver ata akiiba, aibe kidogo sana

You introduce another angle i had not seen… How immediately are you required to start repaying? Can it be after its done na watu wanalipa rent?

Following keenly

You can negotiae for a moratorium. Interest will be accrued on your loan balance but no repayment required.

Is this possible? can banks accept such an arrangement?

cc @uwesmake

can they do that really? give you cash and not collect anything for 1.5 - 2yrs…or is interest just accruing on the loan but you just dont pay the bank for that period?

Theres a grace period but will vary with the bank.but be cautioned.this shud not be your only source of incom.banks can screw u big tym.kuna marental hukua doomed ivo tu.kama kasa na around hapo trm zimejengwa kwa swampy areas zinakuanga na baridi wazimu zinakataliwa sana

aaah… Could try negotiate that…

Yes. It happens. You pay nothing for two years. The technical term used is moratorium period. Nearly all these commercial and big residential projects you see around have moratorium periods.


what if the houses don’t get tenants?
no bank would take that risk what i know is that you must produce another security rather than that flat coz installments must be met

My 50 cents: kama shaky ni kubwa more than 1acre, kata nusu jenga io nusu ingine na io ndoh bila stress. just in case the project bcom doomed

Anza pigsties kama za wakanyama

In a bid to save costs, a bulk of low end clients choose to consult cheap quack architects and contractors…They end up losing way more than going with a professional.
When you get it wrong at the architect level…you get EVERYTHING WRONG! Your architect is not just the design guy…He’s the one who’s supposed to manage the entire construction project, tendering, and follow up contractors and stuff wasifanye kazi ya ujinga na kuiba pesa.

A house like that haiwes fika 70m plus shamba ni yako

@choclatemonk Ever heard of something called joint real estate ventures? Well, I’ve never been an advocate of rentals, especially when you’re relying on secondary funding. It usually 10 years plus just to break even on your rental unit investments, when you use standard concrete and stone building materials. The only advantage here is the security attached to rentals.

If you have a prime plot somewhere, my best advice would be hooking up on a joint venture with financiers like Shelter Afrique and Fusion Capital. They’ll inject hundreds of millions, and possibly even billions on a feasible project, sell and give you your cut (which is usually the appreciated cost of land+Cost of land as a contribution to project cost on the final profits made). You can then take your cash and reinvest again in another joint venture not only as a land owner, but also as a partial funder. Ultimately, you’ll be able to build your own rental units…but by then, I assume, you’ll be addicted to developing and selling

Again, mimi mahali naskiaga loan naskia kua mgonjwa. They are very expensive. What do you want an asset or cash flow every say end month? There are other investments huku inje which pay better and less hustle, infact you work in terms of hour per week. Na ata izo hours it’s not you who do it. You purchase something for say 1m and by the third month, pesa imerudi sasa ni wewe kukamua pesa kamu kamu, but niggaz just don’t know!

Lakini izo ni chini ya maji, wakenya mnaeza haribu kitunguu yangu ya future.