How To Fund Your Real Estate Investment Projects in Nigeria using these 6 key concepts

-

 Real estate development in Nigeria can be a lucrative business with the right funding and strategic thinking.

There are six key ways to fund your real estate investment  in Nigeria:

1. from your own savings

Most of the time in Nigeria, if you want to start a real estate business, you can fund it from your savings. that is if you have the capacity because it's not easy to get loans

2. flexibility from Payment Plans

You may not be able to shell out millions immediately out of pocket but there are different payment plans you can take advantage of.

After putting down a stipulated payment — a fraction of the cost, you can spread the remaining payments, for a month, three months, six, 12, 24, or even 2–4 years.

Most times these come with a little interest attached after the third month, but some are even interest-free, up to 4 years! like Landwey’s development at Oworonshoki.

3. Loan from financial institutions

Maybe not so popular with individuals but lots of Real estate developers and companies take advantage of this method. It’s all about OPM (other people’s money) and channelling it to Real Estate projects.

Banks even in this part of the world that are usually not poised to give people and businesses loans gladly bring their chequebooks out for Real Estate developments and projects.

The interest rate might be a conversation for another day, but most companies meet up, even after taking profits from their Real Estate Investment projects.

4. Cooperative societies

This is very popular in Lagos, as groups of individuals, companies, and organizations come together to pool funds together and fund real estate projects. There is flexibility in the payment terms and as a group they can purchase land in bulk, start development simultaneously and secure the land, rather than doing it as a lone ranger among so many wolves!

A popular co-operative in Lagos is the Chevron cooperative — with a long list of investments in their real estate portfolio namely; Nicon town estate, Chevron Drive, Northern Foreshore estate and a couple of estates in Abijo GRA and opposite Fairfield Apartments Abijo.

5. Sponsorship deals

some people with a bulk amount of land usually don’t have money to develop so every now and then when they want to raise money for themselves, they partner with developers and sponsors to develop and sell their land.

This method is called sponsorship.

In turn, they offer you plots as compensation, commensurate to the volume of land you do work on.

This is how big companies like Landwey, Pwan, Veritasi, Revolution Plus and other companies get bulk land in Ibeju Lekki and Epe.

6. Joint Ventures 

Joint Ventures are another way to fund Real Estate Businesses and investments. They are usually two, three or more parties involved;

The owner of the land, the developer is interested in developing and putting infrastructure on the land/property and The investor; most times the developer and investor are the same, but other times, the investor pools funds together to either implement the project or contribute to the project for an expected return when the property is sold or rented.

Comments

Post a Comment

Popular posts from this blog

Cost of reinforcement in Nigeria

-
  Reinforcements or Steel bars are important structural components of any building which are mainly used to receive and transfer loads from one point to another. They come in different sizes, sometimes the  structural engineer  may recommend the  12mm ,  16mm ,  20mm ,  25mm, 10mm ,  8mm , or others depending on the  strength of material  and other  design specifications . There are four  steel bar types  used for load bearing purposes. They include  Cold Worked Steel ,  Prestressing Steel ,  Hot Rolled Deformed Bars  and  Mild Steel Plain bars . The type commonly used in enhancing the tensile strength of concrete in beams and columns in Nigeria fall under the  Hot Rolled Deformed Bars  category and that is the most popular of all Rods types. In case you are going to the  building material markets  soon, these Reinforcements are commonly known as  Iron rods  by tr...
Read more

Recent Price of Dangote Cement In Ghana

-
The rising demand for cement is attributed to the boom in the real estate sectors across many African countries. Ghana as one of those countries has seen a tremendous increase in cement demand, resulting in people demanding the real time information regarding the cost of this building material. Dangote Cement is among the popular cement brands in Ghana. The company has been operating in Ghana since 2011. This cement is shipped from Nigeria and finally bagged in Ghana at the company’s terminal in Tema. How Much Does 1 bag(50kg) Of Dangote Cement Cost In Ghana? Each bag of Dangote cement is currently being sold at GHS50( $4.81) while other cement brands cost ranges from GHS48 ,GHS47 and GHS45 per bag. 
Read more

How To Choose The Right Real Estate Investment Strategy in Nigeria

-
Image
   Rentals: Rentals are one of the safest and most steady sources of income from Real Estate. In Rentals, you buy a property to put on the market for monthly or yearly rental. It has a lot of upsides like; regular cash flow, asset appreciation, collateral for loans, and property that can be sold afterwards for a profit. The downside is that just like in many numerous Lekki and Banana island apartments, you may experience non-subscription of your apartment for long periods. A company like First World Communities handles rentals in a prime place like Abijo and a 3-bedroom flat there goes for NGN1.2m per year with a property worth 25m. Dangote has taken out a lease for over 50 units and you can make a guaranteed rental income of NGN800,000 per annum by buying these properties as a rental investment.  Flipping Also referred to as land/property banking — you purchase a property to sell in the quickest time possible for profit. A company that works well with this strategy is Gr...
Read more