David Karau: Young people can own homes with zero deposit

David Karau resigned from the army to explore his passion in real estate. He is the CEO and chairman of Kings Pride Properties Limited which he founded in 2008.

When did you discover your passion for entrepreneurship?

I believe it is in-born. When I was young, I used to play games that involved trading or making transactions. Then when I joined the army in 1994, I took a loan and used the money to buy a photocopier so that I could do some business. Entrepreneurship has always appealed to me.

Did you develop an interest in real estate while in the army?

Partly, yes. While there, I saved my money with the Sacco, rented a spacious house in South B and then sub-let it to other tenants. From this, I earned Sh80,000 every month, paid Sh60,000 to the landlord and pocketed the remaining Sh20,000. 

Later, I used my savings to secure a loan, then I bought a plot in Embakasi and built a guest house. A few months afterwards, I heard about two plots of land in prime locations that were up for sale. I wanted to buy both parcels but I did not have the money to pay the owner immediately, so I asked him to allow me to pay him in installments. The money I got after selling one of the plots was more than what I had spent to acquire both pieces of land. This was an eye opener. The deal proved to me that I could make money from the real estate business.

Did you develop the other plot?

My bank was willing to support my vision of becoming a property owner, so they offered me a loan which I used to construct residential units. In 2008, I finally resigned from my job and started my real estate company.

What specific managerial skills do you live by?

I am persistent when it comes to pursuing my goals and when something is not working, I always encourage myself to be patient. I cherish the advice my father gave me a long time ago, that you should do whatever you set out to do properly so that nobody needs to go back and re-do it.

I always seek to understand my client’s desires, and to offer them a product that suits them well. This is how we came up with the Own a Home at Zero Deposit programme in 2015. After listening to Kenyans’ housing needs, we realised that many of them dreamed of owning a home, but they couldn’t afford the amounts required as deposit before being considered for a mortgage, so they ended up staying in rental homes.

How exactly can one own a home with zero deposit?

You start by paying some money before the construction begins such that even as the house is being built, you already own part of it. The remaining amount is then spread over time. The banks have adopted this model, as have many property developers.

What challenges have you faced so far?

Sourcing for capital to fund the projects is a difficult task that requires diligence and a good business model. To meet the needs of your clients and still make a profit, you need to be very creative. The real estate business, just like all other businesses, gets affected by changes in market trends.

What is your vision for your company?

I have always wanted to come up with a home-grown, independent mortgage franchise that is modelled to meet the needs of young Kenyans. We hope to enable young people buy homes through mortgages, as opposed to renting for life.

How can we encourage young people to join this business?

The public and private sector should forge a partnership programme where real estate experts can share their experiences with the young people. This way, the youth may finally stop shying away from getting into this business.

What is your advice to those looking to get into entrepreneurship?

Many people usually throw in the towel at the very beginning, simply because they have encountered some challenges. Before you get discouraged by the negative stories you hear from those in business, do your research, get familiar with the success stories, and focus on the positives. That is how great entrepreneurs are made.