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Entrepreneurs
Q
uiet, efficient and purposeful,
Wayne’s expertise in building
and Renney’s meticulous at-
tention to financial detail scaling up
projects have proved to be a winning
formula.
The Plit brothers readily acknowl-
edge the huge contribution that the
NHFC has played in Afhco’s success
and that without funding, from the
state owned entity, they would not
be where they are today.
“NHFC was the only one willing to
fund developments in the ‘red-lined’
inner city of Johannesburg 16 years
ago,” says Renney.
Partnering with the NHFC and be-
ing clearly focused on the financial
model, the business, the process of
accessing a plethora of projects and
making a judgement call on each, has
allowed Afhco to create its portfolio
of social, rental, rent-to-buy, instal-
ment sale, and, of course, to repay the
NHFC loans. The Plit brothers didn’t
waste time approaching commercial
banks, as they would not invest in the
often dilapidated inner city precincts.
Renney says that Afhco delved into
Joburg’s inner city and the city blocks
were indeed under attack from slum
lords, hi jacked buildings, and they
developed, he says, “where angels
feared to tread”.
Afhco is only one of a long line of
developers who built a strong foun-
dation through theNHFCandassisted
national government in delivering
on its housing mandate with afford-
able, social and rental housing. Even
through difficult periods Afhcomet its
financial obligations to the NHFC. Plit
cites one examplewhere the brothers
had planned to develop 3 500 units
in Protea Glen, Soweto. After a short
time on the project, they experienced
political interference, the culture of
non-payment and general dissension
and decided to walk away with only
60 units complete and absorbed the
entire loss. Of course, this built a great
deal of trust between Afhco and the
NHFC, as they serviced their debt to
the state entity. This was small fry in
the end as the brothers continued
to work hard and smart to create a
sizeable portfolio.
Plit shares much about their jour-
ney with the NHFC and Afhco’s hum-
ble beginnings, renovating buildings
and selling sectional title units to the
end user market. This however came
to an abrupt halt when the com-
mercial banking sector red-lined the
inner city. “We then started our own
fundingmodel, instalment sales, sold
units and funded end users ourselves.
We created a substantial book and
retained the title deed until such time
as the purchaser paid off the debt.
Only then did transfer take place.”
The Plit brothers were also in-
volved inGatewayHomeloans project
before the NHFC came on board and
the state-owned entity bought Afh-
co’s instalment sale debtor book. The
capital from the debtors book sale
enabled the Plit brothers to continue
developing. Afhco continued to pro-
vide NHFCwith batches of instalment
sales at a discounted rate and Afhco
continued to collect the debt, and
settle with the NHFC. In those days
the instalment sales were over a five
year period, of course, affordability
was always an issue and eventually
extended to six years and finally a 12
year instalment period.
Afhco was also registered as a
social housing institution and this en-
abled the purchaser to tap into a state
subsidy of R16 000 per unit, which
was credited to Afhco, plus the buyer
paid a R10 000 deposit and owed
Afhco approximately R30 000. The
end users who bought apartments
Afhco developed in the early days for
between R40 000 and R50 000. Those
same units today are worth between
R250 000 and R500 000.
Renney says, “It was a good way
of building a capital base for the
low income earner.” Adding that
subsequently Afhco stopped selling
off units, “As we felt that the rental
market was the growth area and we
Inner city housing specialists, Wayne andRenney Plit, founders
and until recently co-owners of Afhco, were trail blazers in the
sector and together created a sizeable housing portfolioworth
R1,7 billion over the past 20 years.
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