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YOU only have to look at the turbulent times of high-profile US property bigwig Donald Trump, who has flirted with the "billionaire" and "bankrupt" titles in the space of two decades, to understand the significance of cash flow.
By 1993 Trump had accumulated more than $900m in personal debt and more than $3.5bn in business debt as he attempted to grow his property empire. As the debt pile grew, he was forced to restructure much of his lending. By October 2007, Trump's wealth was estimated at about $3bn.
Closer to home, South Africans have similarly enjoyed boom and bust cycles with the global financial crisis.
According to Eton Price, head of property private equity at Sasfin, the majority of South African millionaires have achieved this milestone through property.
Speaking on the Fin24.com entrepreneurs podcast, he however warned that the last few years had been tough on property developers, who found themselves constrained by cash resources.
For local property entrepreneur Steven Carpenter of Jozi Apartments, one of the attractions of his business is that it is repeatable and can grow with the entrepreneur.
But he cautions that it is important for property entrepreneurs not to overextend themselves, and to maintain a good relationship with their funder or bank manager.
"Real estate is one of the best set and forget investments there is," US-based entrepreneur and business coach Brad Sugars points out in an interview with Fin24.
However, emphasises Sugars, there is a huge difference between investing and speculating.
"Remember, real wealth comes over a full investment cycle of around 10 years - when your brother-in-law who knows next to nothing about property is suddenly going into property development, you know you're in a speculative stage."
For Sugars, a key factor when considering investment in property is cash flow. He points to the recent financial crisis, when many property entrepreneurs found themselves short of cash to complete their investments and were ultimately forced to sell at a loss.
With low interest rates and market commentators expecting at least one more rate cut, property developers and entrepreneurs will be eyeing access to cheaper financing for their projects.
While the opportunities are there, investors need to remember that interest rates move in cycles and be sure to plan and manage their cash flow accordingly.
- Fin24
By 1993 Trump had accumulated more than $900m in personal debt and more than $3.5bn in business debt as he attempted to grow his property empire. As the debt pile grew, he was forced to restructure much of his lending. By October 2007, Trump's wealth was estimated at about $3bn.
Closer to home, South Africans have similarly enjoyed boom and bust cycles with the global financial crisis.
According to Eton Price, head of property private equity at Sasfin, the majority of South African millionaires have achieved this milestone through property.
Speaking on the Fin24.com entrepreneurs podcast, he however warned that the last few years had been tough on property developers, who found themselves constrained by cash resources.
For local property entrepreneur Steven Carpenter of Jozi Apartments, one of the attractions of his business is that it is repeatable and can grow with the entrepreneur.
But he cautions that it is important for property entrepreneurs not to overextend themselves, and to maintain a good relationship with their funder or bank manager.
"Real estate is one of the best set and forget investments there is," US-based entrepreneur and business coach Brad Sugars points out in an interview with Fin24.
However, emphasises Sugars, there is a huge difference between investing and speculating.
"Remember, real wealth comes over a full investment cycle of around 10 years - when your brother-in-law who knows next to nothing about property is suddenly going into property development, you know you're in a speculative stage."
For Sugars, a key factor when considering investment in property is cash flow. He points to the recent financial crisis, when many property entrepreneurs found themselves short of cash to complete their investments and were ultimately forced to sell at a loss.
With low interest rates and market commentators expecting at least one more rate cut, property developers and entrepreneurs will be eyeing access to cheaper financing for their projects.
While the opportunities are there, investors need to remember that interest rates move in cycles and be sure to plan and manage their cash flow accordingly.
- Fin24
