When Opportunity Knocks… Three Times: Rael Levitt

It all started when I was 17.

My mother was an estate agent who schlepped me along with her to show houses from a very young age and I loved it, so I sat for the estate agents board exam and began selling houses on the Cape Flats.

Two years later, in 1990, I bought my first house for R17 000 while I was studying law. I was in the process of renovating it when a sheriff of the court stopped to ask me for directions. I’ve always believed that by helping people it comes back to you, so I took him to the venue he was looking for and discovered he was going to do an auction sale. I was transfixed. For the next three years I attended every auction I could, even planning my lectures around these events. By my 20th birthday I had clocked up about 100.

By this time I had realised that property is an illiquid investment that gobbles up cash flow. I needed to find a way to make money to pay off the bonds for the properties I started purchasing. At the same time, I wrote my thesis on the effects of foreclosure and repossessions on the Cape Flats community.

I am a great believer in building relationships. I had met many bankers at all the auctions, so I went to visit them and told them I could auction properties for them. This was one of the first lessons I learnt – if you see a gap, jump in as quickly as you can. There was a huge oversupply of real estate at the time, and the interest rate was sitting at 25% – the opportunities were enormous. I approached Absa first, making contact with the then regional general manager’s office. Because people in high places are difficult to get to, you have to befriend the gatekeepers. I bought flowers and chocolates for his PA on her birthday and she got me an appointment. At that stage, Absa was losing serious money on foreclosures. I presented him with an idea that I had come up with on how to do auctions differently and to minimise the bank’s bad debt provisions.

Auctioneers had always been seen as the undertakers of the business world – sheriffs who would sell people’s homes for nothing. My challenge was to give the industry a more corporate and professional edge. It didn’t happen overnight; it takes time to change a market and an industry.

I did it by moving auction locations from the sidelines into the mainstream. Auctioneers always had offices in draughty warehouses in industrial areas; today our offices are situated in prime locations such as Melrose Arch, at De Waterkant and at Umhlanga Ridge. Many of the innovations we introduced all those years ago have become accepted practice. We have given the industry respectability.

I taught myself to chant in the shower by counting the tiles on the wall. Because I was shy, it was a challenge for me to become a public speaker. It taught me that opportunity often lies in the things you find difficult to do. In 1990 I took out a student loan of R4 000 to fund my auction house, which I named Levco, and I did not draw any money out of it for the first three years. I ran it on a shoestring and I constantly reinvested; that’s something I still do today. As a result, the business became completely self-funding by 1994. By then, my new approach had made me quite a well known figure in the industry and I started to do some high-profile sales. When Allan Boesak’s bookkeeper Freddie Steenkamp was jailed for stealing from the Foundation for Peace and Justice, I sold off all his assets.

I believe that you become who you associate with. In 1995, I was approached by Lawrence Seeff, who was busy listing Seeff Properties on the JSE and wanted to buy Levco. I thought this would be a great learning curve, so I sold out for R1,5 million and joined Seeff as MD of its auction business. I absorbed everything I could during my three years there. It was a dynamic organisation. The fact that I was able to interact with experienced, senior people at the age of 25 gave my career a huge boost. Seeff delisted in 1998, and I did a management buyout of the auction business. I applied for funding from Boland Bank, which knew me well, and created Auction Alliance. Within 10 months, I had paid off the loan.

By this time I had been in the industry for eight years. I contacted all my connections and told them I needed help to build the company; in addition to that, I literally walked the streets looking for business. When 2000 rolled in, I realised that the business was solid and stable in terms of revenue and cash flow. The next chapter was to build a management team, which had become critical. Up to then, Auction Alliance had been an egocentric business based entirely on my personality.

Unlike relationship-building, marketing and innovation, managing people and operations does not come easy to me and I needed to find people to make up for this deficiency. I actively headhunted and sold people on the concept, often going for younger individuals who were ready to take more risks. I looked for people who were evangelists, who wanted more than just a job.
One of the best things I did was to appoint a CA to be the financial director. Come 2001 I had built a strong management team in Cape Town; just three years after launching the business, I decided that the next step was to go national. I moved to Johannesburg and repeated what I had done almost a decade earlier – I hit the streets of Gauteng looking for business and selling my auction concept to the city.

http://www.entrepreneurmag.co.za/article/h/?a=1515&z=161&title=When+Opportunity+Knocks…+Three+Times:+Rael+Levitt