Starting real estate investment on a very small note


I got a text message from a friend recently saying, “The deed has been done.” I was almost calling to seek clarification about what he meant, but I suddenly remembered that he had told me his blue-chip company is downsizing due to fall in oil prices in international market. When we met the following week at our friends’ forum, he told me he was affected by the company’s decision not because he stepped on sacred toes but simply because “his services were no longer needed.” In fact, that was why he had wanted to see me and seek advice on what to do with the N27.3 million he got as severance payment.
I was initially confused, as a result of so many options in my mind, but promised to see him at home over the weekend. This is my candid advice for him when we met: “Ogbeni, now that you have so much money in your pocket, but do not know where to start spending it, my suggestion is that you buy an acre of land in Simawa, behind the Redemption Camp, at the cost of N1.5 million and start breeding all sorts of livestock ranging from pigs, ducks, guinea fowl, turkey even dogs.”
He thought I was only making fun of him until I made him to realize that he does not need to rush into real estate investment until he has convinced himself that such investment is worthwhile. I explained further that what I asked him to do is to serve as a bridge between his period of unemployment and the time of getting a new job. Or, possibly turning into a full time entrepreneur and sooner or later rub shoulders with the likes of Aliko Dangote, Mike Adenuga, Wale Babalakin, Jim Ovia, Wale Tinubu, Jimoh Ibrahim and several other high-merit businessmen I personally admire.
He drained his cup and looked into my eyes. “But what do I have to do about the pigs, ducks, guinea fowl, dogs and monkeys you mentioned.” “You see, period of unemployment could be a trying period for such a man of your status. More so, the money you got could ‘fly away’ if not properly managed,” I started. At that point, he adjusted himself on the leather sofa and became more enthusiastic to listen to me.
If you have an acre of land and start rearing livestock on it, there are three major advantages. First, the land you buy now will appreciate in value by the time you are ready to resell. I informed him that when Simawa was opened about five years ago, an acre was sold at about N500,000 but has gone up to as high as N1.5 million. It is expected that the price will continue to soar in view of increasing demand for land on the axis. A plot of land may eventually cost N1.5 million say, in another five years time turning your acre of land into a N9 million-investment.
Secondly, you turn livestock breeding into an immediate job and earn money selling them. Much more importantly, you leave home every morning to “resume on your new job.” You may decide to dress corporately and nobody will ask you if you are going to farm or office. The point is that you are leaving home and not becoming redundant. This period will afford you the opportunity of thinking, carry-out enough research and be convinced about the type of investment you will go into with the remaining money.
Apart from these levels of investment, you may decide to build personal house from the land you have acquired or buy another land in different location. Simawa is currently attracting more residents as a result of good road linking it with the Lagos-Ibadan expressway. Its proximity to the Redemption Camp is also a great advantage and what is being considered as a jungle today, will turn-out to be a befitting neighbourhood in a couple of years.
There is also opportunity for you to buy more land and build houses for people either to rent or buy out-rightly. Quite a good number of residential estates are daily springing up in the community and most of the owners of these estates are new starters who discover the goldmine here. There is nothing as good as having a large estate in your name and probably managed by your company.
In case you do not want to invest so much in residential estate, you can buy more acres of bare land; perfect the title and start re-selling to interested buyers for residential or commercial purposes. If you have enough expanse of land, you will attract buyers who want agricultural or industrial developments.
When you are convinced that you have mastered real estate investment, then you can allocate more money to investing in properties close to recreational facilities. For instance, location such as Lekki is growing at a very fast rate because of its proximity to various beaches, apart from its closeness to business districts of Lagos.
And, who says you cannot become a big-time property developer? With so much money, you can delve into mixed developments like shopping centres, hotels and offices which corporate organizations can rent and probably pay more than the residential buildings. There are some families and individuals who have land in very good locations and looking for developers; this can fetch you huge profit depending on agreed sharing ratio.
“Hun…Oro po ninu iwe kobo,” (So much good advice) he responded as he held my hand. “But, where do we go from here?” he asked, to which I replied, “The decision is yours. Call me anytime you think you need my services.”