Why Solly left the police to become a successful property investor
A portfolio of six mixed-use buildings in the Joburg CBD, a staff compliment of close to 100 people, a management book of 90 properties, plans to increase expansion to the rest of Gauteng and eventually reach national level. It’s hard to believe that Solomon “Solly” Ramalamula was a dedicated police officer less than two decades ago.
In 1996 Ramalamula was working as an inspector with South African Police Service (SAPS) when he bought a sectional title apartment in Hillbrow. He soon discovered that owning a sectional title property comes with a unique set of challenges.
“Those of us who were paying all of our levies and rates and taxes on time every month couldn’t understand why our services were constantly being cut,” he says. “So I investigated and learned that the problem was the management of the sectional title scheme: Some owners were months behind on levies.”
Discovering a natural passion
The owners of the 40-unit sectional title scheme began talking amongst themselves, airing grievances and looking to find solutions. This is when Ramalamula emerged as a natural leader and was elected chairman of the body corporate without knowing what that would actually entail.
“All I knew was that I didn’t want to stand in front of the rest of the body corporate and not know what I was talking about, so I developed this passion to learn, to understand what it was that I was actually looking at.” A consultant from then-Saambou Bank helped Ramalamula understand the balance sheets and bookkeeping involved with managing a sectional title scheme, and he attended short courses and training seminars through Paddocks.
Eventually the body corporate forced out the management company and just did it all themselves. One of the elderly owners was hired to do the admin and she was given a little office on the premises where statements and collections were done on site; and it was being done well.
“I was very proud of the cleanliness and security of our building. We actually auctioned three apartments and used the money from that to give the building a new paint job and upgrade and improve security and access control,” explains Ramalamula, adding that it was around this time that nefarious elements were taking over the inner-city residential buildings. “Our building stood out because of the good access control measures we had implemented, it was orderly and clean.”
It was around 1998 that Ramalamula, still working as an inspector, was called to investigate a robbery in Athol. He caught the robber and successfully returned all of the stolen goods to the owner, who, as fate would have it, was AHFCO CEO Wayne Plit.
It was while Ramalamula and Plit were sitting outside court to testify against the robber that they started talking. Plit mentioned that he had a building where he was struggling with tenants who were “hi-jacking” the property; essentially defaulting tenants not paying rent to the owners and then sub-letting the property to make an income.
“I told him he needs to come have a look at my building,” says Ramalamula. “See what on-the-ball management and the correct access control measures can do for an inner-city building.”
Some years later Wayne and his brother Renney, who had since joined AHFCO, contacted Ramalamula to offer him an exciting opportunity. “They said they wanted me to resign from my job with the police and come and work with them, manage some properties in Soweto and surrounds,” he explains. “I was nervous and afraid of leaving my job and completely changing careers. At this stage I knew more than I did when I was first elected chairman of my body corporate but I was under no illusion that I was going to take that world by storm; I knew I had loads more to learn.”
No turning back
The next year, in 2001, Ramalamula resigned from his police job and started working for AHFCO as a portfolio manager. He was eventually promoted to director and then realised he wanted more. All the while he had been running with applications initiated by AHFCO to TUHF for finance.
TUHF provides commercial property development finance in South Africa, as well as providing support, guidance and risk management for new entrepreneurs. “So I knew about them but never for one second thought about applying to them in my personal capacity.”
In 2008, when the markets were struggling Ramalamula became aware of a property in the CBD; a small four-room property that he had plans to expand on, if he developed the appetite to take the risk. He told his colleagues who essentially gave him the go-ahead to manage his personal portfolio on the side; he would need to apply for finance with TUHF and cash out his pension to afford this property. He was understandably cautious. He had seen first-hand how challenging the environment could be, even for established companies. So he didn’t make his move until a year later.
Not moving when the market was slow is what he now chalks up as his biggest mistake in this journey. “The property had so much potential and was on the market for an excellent price, I waited too long.” Nevertheless he eventually cashed out his pension, successfully applied for funding from TUHF, and with their guidance, renovated, and later let and managed the property.
“This is when I began to understand what the biggest mistake is young black property entrepreneurs make; they think owning one property and letting that out means that they are now set to live from the rental income,” says Ramalamula. “These entrepreneurs generally do not have an idea of how challenging the environment can be, with such a relatively small portfolio one defaulting tenant or unusually high vacancy rate can land a landlord in trouble. Then there are also the municipalities and their irregular, sometimes very high bills. It’s all things you have to account for. And once you’ve done all the sums I’m willing to bet that you’ll come up with less to live off than you are getting from your salaried job.”
Ramalamula says that the only reason he felt comfortable leaving his position at AHFCO to go out on his own was the fact that he was running a successful transport company on the side. “The one building was definitely not enough to look after my needs – I needed a steady income and thankfully my transport company offered me that.”
After leaving his job he founded Take Shape Properties which grew to include mixed-use buildings with some residential and retail spaces. Ramalamula eventually sold his transport company to expand his property portfolio further.
In 2015 the very thing that first got Ramalamula interested in property management changed directions for his business somewhat, to something he had never even thought of. TUHF had been seeing a problem with entrepreneurs battling to successfully manage their properties once it was in their hands. People just did not have the knowledge required, so they approached Ramalamula with an interesting proposal. Would he consider offering management services to these landlords once they had gone through the financing process with TUHF?
Take Shape Properties had by then reached a position where all capital was tied up, with Ramalamula being wisely cautious of more debt to finance further growth. The TUHF proposal represented an exciting opportunity. And so Take Shape Property Management was born.
Ramalamula and his team now manage close to 90 properties across Gauteng, with a small satellite office in Midrand.
The need for services like Take Shape’s is evident in the fact that the bulk of its business is not coming from TUHF; in fact a great portion of its client base consists of landlords that have approached it independently after seeing the way in which properties managed by Take Shape thrives.
The plan is to grow Take Shape to national level, with Ramalamula constantly on the look-out for the right opportunity and set of circumstance. Make no mistake though that this ex-cop is fully aware of how challenging the environment is going to remain.
“Bigger management and development companies are taking over the CBDs with the trend of converting unused commercial properties to cheap residential units. It is making the game very tough for the small guys with increasing vacancy rates. Defaulting tenants always remains a risk for any landlord and then there is the unpredictability of the municipalities,” explains Ramalamula, adding that he and Take Shape is, however, definitely here to stay.
“I’m incredibly passionate about what I am doing and helping young and small entrepreneurs make a success from their property ventures. In any case, returning to the police is not an option. All that running…”
So what is the little pearl of wisdom Ramalamula would like to pass on to young entrepreneurs with big dreams?
“Please stay employed until you have a sustainable property portfolio. Do not forget to take factors such as vacancy ratios and default ratios into consideration when working out your bottom line. And nowadays we as landlords are forced to make provision for surprise large bills from the municipality. These are all things you need to consider before taking the leap and leaving the security of your full-time employment.”