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Ultimate Guide To Real Estate Investment in Lagos, Nigeria

I have done a lot of videos online about investing in real estate, cash flow, land banking, rental income and so on. But a lot of people still find it a bit scary, risky and also a lot of people are still ignorant about a lot of things about real estate. So in this episode of Meet The Property Guy, I'll be doing a guide on real estate investment for beginners.

This is for people that have not bought or invested in real estate at all before. After watching this guide for beginners on real estate investment, you can also go to our channel, we have a lot of videos on real estate investment, rental income, short lets, land banking and so on. There's a lot that you can learn.

And also if you haven't learned a lot from our videos, from our episodes, this is a fantastic opportunity for you to subscribe and also join the Meet The Property Guy property family. So now let's go into the topic, real estate investment guide for beginners. For a lot of people that are looking at investing in real estate, they are likely investing or they have likely been investing in other channels, in other investment models, crypto, forex, stock, dividends, shares and so on.

So coming into the real estate sector as an investor, as the first time you want to invest, want to buy the property, the first thing you need to understand is that real estate investment also have a security. For every real estate purchase and investment that you are making, there's also a security on that investment to ensure that you are not losing your money and not losing your fund. And security on a real estate investment, particularly if you are doing that here in Lagos or here in Nigeria, is the document on that property.

Because the moment there's a defect or there's an issue on the documents of the property that you are buying, that you are investing your money, it's very likely that you are going to lose that property and also it's also very, very likely you are going to lose your money too. So that's why you need to pay a lot of attention and also do a lot of findings, digging deep a lot about the documents of the property that you want to buy. And also, that's why it's also very, very important and very, very advisable that after you have also bought the property, you also need to do a lot of work on the documents of that property and transferring it to your name.

So that at this time around, the previous owners that you have paid cannot no longer lay claim to that property or access to that property. You have paid them, so it's yours. So you should also try to also work a lot on also perfecting the name or the title of that property now to yourself.

So the security of every real estate investment is the document on it, the title document on it. And that's very, very key and that's very, very important because if there's any issue on that title document, there's any issue on that document, your property is at risk and your property, your investment is no longer secure. As a beginner, another thing that you need to understand about real estate investment is that real estate investment is a solid asset.

Yeah, we know a lot of talks and a lot of ads, a lot of ads online about people telling people buy assets, don't buy liability, real estate is an asset and so on. But real estate is a solid asset, which means that your money and your funds that you are putting into a real estate investment is solid. You can't just convert that investment to cash based on you need money in a hurry.

No. So you need to also find a way to first liquidate that asset before you can now get your cash. And that's why it's never advisable that you sell a real estate investment in a hurry because the more desperate you are, the more likely that you're going to sell at distress.

And if you are selling a property at distress, you are likely going to make a loss or not going to make enough return on investment as you should. So the very, very important thing is very, very important. You need to take note of it.

Real estate investment is a solid asset. I need to first find a way to liquidate this asset before I can have an asset, I can have my cash. Yeah, I'm going to see a lot of adverts online about a property that was like $900,000 before it went to $2,000,000.

A property that was like $500,000, $5,000,000 before it went to $10,000,000. A property that was like $60,000,000 before it went to $80,000,000 or went to $85,000,000. And you feel like intimidated, like, wow, I can do this to have my funds here, just put it into this and let's convert it.

Yeah, it makes a lot of sense. Now, you can have three properties, fantastic locations. You can, two can get sold out in maybe weeks, a few months.

The last one can take you three years to sell it. That's just real estate for you. As long as you are not desperate, you are going to sell it.

As long as your title is secure, your document of that property is secure, you are going to sell it and you are still going to get your money back because real estate is demand driven and real estate doesn't depreciate. So this is what you need to understand about a real estate market. Real estate market is very, very unpredictable in terms of when you want to convert your investment from solid assets to your cash.

Now, as a first timer in the real estate investment sector, you are investing in real estate right now. I've been talking about converting your real estate investments into cash for a while. Then I also need to explain to you how you can convert your real estate from a solid asset to cash.

Now, you bought the land, you bought the house, you've invested in certain locations, how can you convert what you have bought there for you to get your money back, which is returns, obviously. Now, one of the easiest way or the most common way is to sell. You buy and then you flip.

You buy a property at so-so amount, okay, look at the market, inflation has come in, the exchange rate has gone up, the property is at so-so value, then you also flip yours too and then get your money back with your return on investment. Now, another way that you can also convert your real estate investment from solid assets to solid cash is also to do lease. You have a very prime property facing the expressway or facing the road, you can lease it.

A company can lease it from you, a church can lease it from you, a school can lease it from you, a farm can lease it from you, depending on whatever they want to use it for, five years lease, 10 years lease, 15 years lease, a warehouse can lease it from you, then that's also another way to convert your real estate investment from a solid asset to solid cash. Another one is rent. Rent and lease are almost the same anyway, just that lease is a longer rent.

Instead of when people pay you for rent, maybe per annum, for lease people are paying you 5 years, 10 years, while short lease people are paying you per night. They're all the same basically. Now, another way which you can also convert your solid assets to solid cash is by doing what we call financing.

Now, a lot of people are doing that right now. For example, for a lot of land in Ikeja, Surulere, Chevron, Lekifeswa, so what you just do is, I have this prime property in this particular location and look for developers, people that have the funds, they have the capability, then you go into an agreement with them. Okay, my land is 1,000 square meters, it's 2,000 square meters, you guys are going to come in, build on this property, develop this property, then you sell.

After you sell, these are sharing ratios since it's my land. Everybody smiles. Or, okay, you guys are going to build eight units of duplexes on this, my land.

I take three, I take four, you guys take four too. I take three, you guys take five. I take two, you guys take six.

Then everybody smiles too. So financing is also a very fantastic option when you have a prime property. You don't even have to spend your money to develop it.

So people, someone else will spend their money to develop it for you and still get your money, still get very high return. Because you are selling the property, selling the land, maybe at maybe 120 million or 100 million. By the time you do joint venture, JV, and then they develop that property, and they give you maybe two duplexes, can sell those two duplexes at maybe 180, 200, or even 220, and even make more for me too.

So that's also another opportunity for you where you have a solid asset for you to convert it. If you don't have developers that you can talk to to finance or to develop that property for you, you can also just use that property to get some financing at the bank. As long as your document is complete, you have this particular fantastic property at social location, and you need an urgent funds, just take the document to the bank, present it to them.

They assess the property, okay the property is 200 million, okay you guys should give me 150. They are going to give you a fund because they know that property is actually worth more than the amount that you are asking for. That's also another way for you to convert your investment from a solid asset to solid cash.

For every real estate investment that you want to go into, you need to ask yourself three questions. And this is also what I usually do for my real estate investors too. Now the first question is, you need to ask yourself, this investment, this real estate purchase, this property I want to buy, I want to invest.

If everything goes wrong in this investment, if everything goes wrong, what am I going to lose? Now you're about buying the property for maybe 4 million or 5 million, that means if anything goes wrong on this property purchase, I'm losing 5 million, or I'm losing 4 million. Am I fine with that? Can I survive with that? Now the second question you need to ask yourself is, if everything goes right in this real estate investment, I bought, property is genuine, the title is genuine, I bought, I got my documents and everything, matter of years I sell, what can I gain if everything goes right? Everything goes right in this investment, what can I gain? And it's simple, invest in a property for 4 million, 4 or 5 years later, that property can worth 10 million, 12 million, depending on the location, and you're looking at like 6 to 8 million dollar return on investments. Everything goes right.

Yeah. Now the third question is, if I do nothing, I don't buy at all, I don't put my money there, is there anything for me to gain, and is there anything for me to lose? What you gain is, you still have your money, you still have your 4 million untouched in your account, and what you tend to lose is that, particularly if it's Nigeria, your money is losing value, because what you can buy at 4 million, with 4 million 3 months ago or 4 months ago is not the same thing as what you can buy with 4 million right now, not even the way things are getting more expensive in Nigeria. So that's just what you need to, those three questions you need to ask.

If everything goes wrong, what am I going to lose? If everything goes right, what am I going to gain? And if I do nothing, am I going to gain something, am I going to lose something? So you can ask these three questions comfortably on any real estate investment, you need to guide your decision, and also guide how you can protect yourself, and how you can protect your investment.