Real Estate Developers Association of Nigeria (REDAN)

As a way to effectively handle the current huge housing deficit in the country, the government is collaborating with the private sector through reputable agencies and associations. One of such is the Real Estate Developer’s Association of Nigeria (NIGERIA), an agency tasked principally with the responsibility of facilitating the delivery of affordable mass housing in the country. The association has a membership strength of over 1, 500 members and is the brain behind any housing development or initiative that is organized and/or sponsored by the Federal, State & Local Governments, NGOs, private organizations, as well as foreign partners and investors.

The association, which was created in the 90s, has gained tremendous reliability and reputation through its ability to endorse the interests of its members by furthering the reformation process of the mortgage finance sector thus creating a conducive environment for the provision of mass housing at the National Assembly and restructuring the housing finance policies of the Central Bank of Nigeria FMBN, Primary Mortgage and Commercial banks. The association also partners with other associations in the Housing and Real Estate Development industry and works closely with the Federal Ministry of Lands, Housing and Urban Development since the ministry is a major provider of land.

The association’s National Secretariat is located at 32, Minna Street, Off Ilorin Street, Area 8, Section 1, Garki, Abuja FCT, while the South West Regional Office is located at Plot 1, Block B8, CMD/Jubilee Road, Magodo, GRA, Lagos State, Nigeria.

Although REDAN is backed and funded by the Federal Mortgage Bank of Nigeria (FMBN) – the apex mortgage lender in Nigeria – the association is presently trying to improve funding by branching out into the national and international capital market so as to make sure that the realization of delivering mass housing to Nigerians is not encumbered by an unsteady flow of funds.

With a strategic direction to create a platform where real estate developers can collaborate for the common good of Nigeria, REDAN seeks to ensure and maintain amiable relations with all stakeholders associated with the housing industry. It also collaborates with government agencies and parastatals involved in land administration, planning, infrastructure development, housing provision and administration. The association also actively promotes research studies for the improvement of building materials and systems, as well as setting a standard for the industry.

In line with its objectives, REDAN’s Vision Statement is “To be Nigeria’s most influential and credible voice in the real estate development and investment industry, a notable force in influencing industry policies and practices; with strong local and international recognition in all issues affecting the Nigeria real estate sector.”
Its Mission Statement is “To effectively represent the members to achieve their corporate objectives and to efficiently carry on their business as agents of development by ensuring public appreciation of the importance of REDAN, and efforts it is making to meet the housing needs of Nigerians. Ensuring balanced national legislative, regulatory and fiscal policy to provide the enabling framework and environment for effective housing delivery.”
Membership of this prestigious association however is not open to individuals but corporate organizations and is by application. Applicant must be an estate development company or be involved in business related to the housing industry or commercial real estate development including building of residential, commercial or industrial structures. This is inclusive of shopping centers, plazas or other commercial structures. Corporate organizations eligible for membership are Limited Liability Companies, Registered Societies, Partnerships, and Parastatals of State or Federal Governments involved in real estate development.

Some of the benefits of being a member are:
• Credibility and recognition as a developer.
• Access to information on developments affecting real estate development.
• Support for land acquisition, participation in the Public Private Partnership (PPP) scheme for infrastructure and estate development
• Access to finance under the REDAN Real Estate Investment Trust (REIT) scheme, or other local and offshore development loan syndication schemes under the auspices of the Association.
• Opportunity to access estate development financing from the Federal Mortgage Bank of Nigeria (FMBN) and sell housing units to National Housing Fund (NHF) contributors under the NHF mortgage loan scheme
• Access to NAHB resources through REDAN’s affiliation with IHA
• Access to customized and symposiums, such as the EDL workshop



CLICK TO READ HOW TO JOIN REDAN

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Hutbay Unveils Custom Webpages for Estate Agents and Developers

Lagos-based online marketplace for properties, Hutbay, has unveiled customizable web pages for estate agents and developers, to boost their online presence.

Hutbay made this known to TechCabal via an email conversation with company CEO, Owolabi Olatunji.

According to an official release from Hutbay, the customizable web pages, which has been in beta for some weeks now, will allow real estate agents create web pages, and curate their listings in a way that visitors to their pages can easily browse through.

“Real estate agency is primarily a mobile and offline profession. Information technology (IT), as it were, is not the forte of real estate professionals,” Hutbay says, “However, more and more real estate consumers are going online to find property and property-related services.”

Hutbay says the webpages are fully customizable and optimized for visibility, with customizable rich media, company information, dynamic listings and lead generation forms.

Formally launched in May 2013, Hutbay assists home buyers, sellers, renters, real estate professionals/mortgage institutions, find and disseminate important information about homes and real estate.

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Estate Agent dupes 56 people

A developer and four estate agents have been arraigned before a magistrate’s court sitting in Lagos for allegedly collecting a sum of N19.4m from 56 persons under the guise of letting out a self-contained apartment on Yusuf Street in the Iyana Ipaja area of the state.

We gathered that the accused persons – Chief Adeoye Ogundipe (70), Chief Wasiu Jinadu (62), Tajudeen Bamidele (54), Gbolagade Sanusi (58) and Tajudeen Idowu (40) – allegedly collected the money from the unsuspecting victims between September and October, 2014.

We also learnt that each of the complainants was duped of a sums ranging from N100, 000 to N250,000.

While the agents – Ogundipe, Jinadu, Bamidele and Sanusi made N7.2m from the ‘deal’, the developer, Idowu, whom residents in the area identified also as Bashiru, got N12.2m.

It was said that the victims paid the money after the defendants had taken them to the apartment, which they were individually promised to occupy as soon as it was completed.

It was also revealed that the syndicate’s antics blew open when two of the prospective tenants met at the apartment.

A police team was said to have gone after the suspected fraudsters after the case was reported at the Gowon Estate Police Division.

On Friday, when our correspondent visited the detached apartment with the inscription “Bashiru is wanted,” its window glass had not been fixed. Some parts of its roof were also yet to be covered.

The defendants were arraigned before the magistrate, Mrs. O.A. Olayinka, on three counts of conspiracy and fraud.

It was, however, learnt that the agents had been prosecuted in the court while the developer was at large.

The charges read in part, “That you Tajudeen Idowu, Adeoye Ogundipe, Wasiu Jinadu, Tajudeen Bamidele and Gbolagade Sanusi did between the months of September and October, 2014 at 27 Yusuf Street Iyana Ipaja in the Ikeja Magisterial District conspire to commit felony by unlawfully collecting a sum of N19, 478, 000 from one Ague Loveth and 55 others.

“That you did on the same month and place in the aforementioned magisterial district conspire to defraud one Agu Loveth and 55 others to the tune of N19, 478,000 under the pretence that you will secure a self-contained apartment for them.”

However, the defendants pleaded not guilty to the charges which the police said were contrary to and punishable under sections 323 and 321 of the Criminal Law of Lagos State, 2011.

While the four estate agents were admitted to bail in the sum of 1m with two sureties each in like sum, the developer was granted bail in the sum of N5m with three sureties who, according to the magistrate, must be level 12 civil servants working for the state government.

Olayinka adjourned the matter till December 4, 2018.

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Land Use Act: The trend of land acquisition by host Government

It is debatable that the Nigerian Land Use Act of 1978 has not absolutely transferred ownership of land to the Governor of states in Nigeria. In this article, we look at the trend of  Land Acquisition by host Government.

It is argued that the citizens have no rights or interest over the land in the country beyond their occupation because such rights or interest have been taken over by the virtue of section 1 of the Land Use Act, which provides that subject to the provisions of the Act, lands in each state of the Federation is vested in the Governor of that State and such land shall be held in trust and administered for the use and common benefits of all Nigerians.

No doubt, the procedure for compulsory acquisition requires adequate notice to be given to the owner, compensation to be paid and the acquisition must be for ‘public purpose’.

There is no land without owner; the ownership may be individual, corporate, communal or nation at large. Everything depends on land, houses are built on land, food comes from land, and the ultimate relationship between Man and land is that man’s remains are committed to land after death.

Hence, life’s basic needs are expressed to be food, clothing and shelter. Therefore it is true to assert that there is only one fundamental need of life and that is land because food, clothing and shelter are entirely derived from land.

The land comprised in the territory of each state of the Federation is the res over which the governor exercised ownership in trust in accordance with section 1 of the Land Use Act of 1978. It is an immovable property.

Going down memory lane, the Land Use Decree was promulgated on 29 March 1978 following the recommendations of a minority report of a panel appointed by the Federal Military Government at the time to advise on future land policies.

With immediate effect, it vested all land in each state of the Federation in the governor of that state (Federal Republic of Nigeria, 1978).

The Decree distinguishes throughout between urban and rural land. In urban areas (to be so designated by the Governor of a state), land was to come under the control and management of the Governor, while in rural areas it was to fall under the appropriate local government.

‘Land Use and Allocation Committees’ appointed for each state by the Governor, were to advise on the administration of land in urban areas while ‘Land Allocation Advisory Committees’ were to exercise equivalent functions with regard to rural land.

In view of the aforementioned, the following objectives are critical to the crux of this article:

(i) What are the provisions of the ACT relating to acquisition and compensation of rural land

(ii)  What are the stands of the ACT as regard valuation for compensation

(iii) Why compensation have been a subject of litigation

Compulsory acquisition or purchase is the process by which local and national governments obtain land and premises for development purposes when they consider this to be in the best interest of the community.

The process of valuation for compensation in compulsory acquisition of land takes place within distinct legal; cultural; socio-economic; political and historical environments which influence the delivery of the process by key actors in it.

The basic principles are perceived to be quite similar even though the practice may vary in different nations or regions, the assessment of compensation is usually influenced by local and national statutes, enactments or laws that provide the basis upon which existing professional standards and methods may be applied

The main statute governing land acquisition and the assessment of compensation in Nigeria is the Land Use Act No.6 of 1978.

Section 28 and 29, provided that:

(1) It shall be lawful for the Governor to revoke a right of occupancy for overriding public interest.

(2) Overriding public interest in the case of a statutory right of occupancy means; (a) The alienation by the occupier by assignment, mortgage, transfer of possession, sublease, or otherwise of any right of occupancy or part thereof contrary to the provisions of this Act or of any regulations made there under; (b) The requirement of the land by the Government of the State or by a Local Government in the State, in either case for public purposes within the State, or the requirement of the land by the Government of the Federation for public purposes of the Federation; (c) The requirement of the land for mining purposes or oil pipelines or for any purpose connected therewith.

(3) Overriding public interest in the case of a customary right of occupancy means; (a) The requirement of the land by the Government of the State or by a Local Government in the State in either case for public purpose within the State, or the requirement of the land by the government of the Federation for public purposes of the Federation; (b) The requirement of the land for mining purposes or oil pipelines or for any purpose connected therewith; (c) The requirement of the land for the extraction of building materials; (d) The alienation by the occupier by sale, assignment, mortgage, transfer of possession, sublease, bequest or otherwise of the right of occupancy without the requisite consent or approval.

(4) The Governor shall revoke a right of occupancy in the event of the issue of a notice by or on behalf of the (Head of the Federal Military Government) if such notice declares such land to be required by the Government for public purposes.

(5) The Military Government may revoke a statutory right of occupancy on the ground of; (a) A breach of any of the provisions which a certificate of occupancy is by section 10 deemed to contain; (b) A breach of any term contained in the certificate of occupancy or in any special contract made under section 8; (c) A refusal or neglect to accept and pay for a certificate which was issued in evidence of a right of occupancy but has been cancelled by the Military Governor under subsection (3) of section 10.

(6) The revocation of a right of occupancy shall be signified under the hand of a public officer duly authorised in that behalf by the Governor and notice thereof shall be given to the holder.

There are a number of observable problems associated with compulsory acquisition and valuation for compensation in different parts of the world. The land use act is silent on the question of “disturbance and injurious affection” which implies that dispossessed land owners are not compensated for certain losses such as goodwill.

The manner by which the governments in many developing countries exercise the rights of compulsory acquisition undermines tenure security because often, little or no compensation is paid, which then have negative impacts on equity and transparency.

Observations on the invocation of Public Land Acquisition and Payment of Compensation in Nigeria have resulted in controversies, lapses and disputes in the past, such as listed; inadequate revocation notices, inadequate compensations, illiteracy of the claimants, inadequate funding of compensation exercise, non-payment of interest on delayed payments, problem of conflicting claims, use of low rate for economic trees and crops, non-enumeration for some crops/economic trees, resistance to allow surveyors to.

The question is how do you justify using investment method of valuation for this house and other improvements on the farm land? Where are the comparables? Where is the rent? Even, undeveloped land here, how do you use market value here? Where is the data? Where is the market survey?

Of a truth, an amendment to the present Land Use Act of Nigeria to reflect realities as regard ownership and transparent methods of assessment for compensation has become imperative

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Why Governor’s Consent Hinders Real Estate Development In Nigeria

The Governor’s consent is a title document that establishes the consent of every Governor of the 36 states of the federation to all land transaction in the “said state”. Invariably, it is a means of perfecting the title on a land. Obtaining a Governor’s consent in Nigeria is a very herculean task. This article addresses the issue of the Governor’s consent as a hindrance to real estate development in Nigeria. 
The issue of getting a property can sometimes be very daunting if you have to think about the stress and many processes involved. First, you have to be sure what you’re buying is genuine and will not be sold to anyone else after your payment, except by you.

Then you have to obtain proper title if none existed before, or perfect the title it already has in your own favour.

The Land Use Act of 1978 puts all land in a State; town and rural area under the control of the Governor and Local Government Chairman respectively in trust for the people of the state.

Consequent upon this, section 22 of the Act then states that, “it shall not be lawful for the holder of a statutory Right of Occupancy granted by the Governor to alienate his Right of Occupancy or any part thereof by assignment, sublease etc without the prior consent of the Governor”

Simply put, even though a property has Certificate of Occupancy which makes the beneficiary the legal interest holder on the land for 99 years or the residue, if he decides to resell, mortgage or do anything with the property.

Since the land is held in trust by the state government, the Governor needs to approve to that transaction. Otherwise, the title that will pass is not perfected.

It is fairly certain that there would be very few people who have not been at the receiving end of the cumbersome process of obtaining Governor’s Consent in Nigeria.  The Land Use Act makes it a requirement that land transfers and land mortgages require consent otherwise the transaction is void.

But the process of obtaining such consent is truly herculean, tortuous and laborious. And unscrupulous vendors have tried to take advantage of this by attempting to go back on land transactions they concluded.

Happily our courts have seen through this, and in a rare display of justice have had to prevent injustice where vendors attempted to void land transactions on ground that consent, (which under the Act, they have a duty to obtain) was not obtained, or where consent comes after the transaction. even though a literal interpretation of the statute is that consent should precede the transaction, which is not practicable.

The point to be made here is that, there are enough contradictions in the Land Use Act for the unscrupulous party to invoke to avoid their obligation under important land transactions. This is why many Nigerians are calling for a complete overhaul of the Act, while some others have called for its abolishment.

The unvarnished truth is that the consent requirement compounds land transactions and increases the investor’s financial exposure.

What can be the possible justification for consent in respect of bank mortgages?

Under common law principles, the mortgagor possesses an equity of redemption such that a mortgage transaction is not contemplated in any way as alienation. Why then is a requirement for consent necessary?

While the above problems relate to the consent requirement and its arduous process, there are more fundamental challenges that the Land Use Act presents.  Before its introduction in 1978, at least in Southern Nigeria, persons were capable of absolute ownership of land, and the common instrument of transfer – Deed of Conveyance – was accepted as conferring title.

Unfortunately, under the Act, as pointed out, absolute ownership has been cancelled, and replaced with a mere right of occupancy. That is not all. It is settled today that the Certificate of Occupancy that is issued in favour of the person holding a right of occupancy does not confer title, does not create a right, but is merely evidence of title and presumes that one exists. This is just not preposterous!

The implications of the above are serious for commercial transactions. Most economic activities depend on two types of capital – their equity/shareholding capital, i.e. and loan capital, which is obtained from creditors.

In the very early times, the banker advanced his loan based on trust, and collaterals were very much de-emphasized.  These days, apart from being a fundamental banking practice, a number of our laws impose an obligation on the banker to obtain adequate collateral.

For real estate development transactions, invariably the banker looks at the subject’s land as collateral.  The transaction is however put at risk with the myriad of problems under the Land Use Act of 1978.

Governor’s consent, which really ought not be a condition because the transaction is not an outright alienation, is not readily obtainable, and when it is, it is at very heavy costs.  The original title documents here, the Certificate of Occupancy, which the banker carefully collects from the developer and places safely in his vault may turn out to be worthless.

This is very unacceptable, disturbing and it is a key constraint to the development of real estate in Nigeria.

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How To Do a Proper Land and Property Search in Nigeria – 2

This is the concluding part of the topic; “How to do a Proper Land and Property Search”. Just like this first part, in this piece, we will be discussing the act of Land and Property search; it’s importance and the processes involved.
Now, let’s examine critically a situation where a land owner who has done search on a property and discovers that it was free, suddenly realizes that he can’t erect a residential building on the said land.

How then can you check out uses for a land and how do you navigate your way around it?

The first thing we must note when it comes to the issue of land search is that Lagos state is already structured and planned. Asides having your survey plan and having confirmed that the land is free for you to use, you must understand that each sector or segment of land in Lagos is appropriated or zoned for specific land use. It could be industrial, residential or commercial

For instance, computer village in Ikeja, Lagos was basically designated for residential use but presently it has been turned to commercial. Now, the Lagos state Government is trying to revert it back to its initial plan for it, which is strictly residential.

What happens in cases like this is that you have to go to New Town Development Agency (NTDA), the agency in charge of the planning for Lagos state. At NTDA you will be able to search  the land use status of your land based on the land coverage.

In a situation where the land is confirmed for industrial purpose or use, meanwhile you acquired the land specifically for residential use, then the land owner might just have found himself in a fix. Because this present administration is hell-bent on sticking to the old master plan of Lagos state due to the clamour for a mega-city status for the city of excellence.

Therefore, even if you submit an application for a change of use, it may still be difficult to implement or process.

If you want to buy a property that has a bit of documentation like; Certificate of Occupancy, Government consent et.c and you need to conduct a search, you must first ask the property owner to produce some numbers like the registration number, the volume number and other details on the C-of-O. You can do this search at the Land Bureau where the exact name of the owner is brought out using the registration number and the volume number.

If you are armed with a copy of the C-of-O, the purpose of the land is usually written on it. It is often stated there if the land is for industrial, residential or commercial use, while some are actually multi-purpose. Moreso, one other thing a property search does for you is that if your former owner has pledged it for mortgage, that will also be stated in your search report

Anybody can actually walk into the Land Bureau or NTDA to do this search because it is a public document. It might cost some money and you may have to swear to an affidavit, but it is still your right.

Destiny Okpalaeke
MD/CEO Destiny King Homes

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Buy Now Pay Later: The Truth About Hidden Charges

This is the third and final part of the ‘BUY NOW PAY LATER’. In this final part of the real estate investment series I will be giving answers to frequently asked real estate investment questions.
The first thing area I will be looking into is the question of ‘How long it takes for a BUY NOW PAY LATER investment to mature and begin to yield returns’.

Ideally, patience is key. I usually tell my clients that it takes up to seven to ten years. It is why the BUY NOW PAY LATER scheme seem to be ideal for such investment. This is made possible because by the time you finish paying for the land, it would have appreciated enough for returns.

BUY NOW PAY LATER deal is a long term investment, and it also depends on what the developer is offering. A sight and service scheme usually takes longer. The gestation period is longer than a housing unit scheme. Ultimately, investment in this deal is not for quick returns.

The next issue I will address is the issue of Hidden Charges. A lot of people ask the question about hidden charges, and usually get angry when this issues come up.

While it may be true that some developers do not disclose hidden charges initially, it is also not all developers who do that. There is a human nature aspect of this. Actually, it is possible that the developer did not hide this charges, instead you were either ignorant of the ‘other charges’ or you were ill-informed by the marketer. But it is in your own interest to ask these questions right from the beginning.

In a proper sight and service scheme transaction, you make payment in four ways. The clearer these things are, the better for any developer. This is because if the payments are delayed, the development of the estate will be delayed.

In sight and service scheme, you pay for the plot first. You must then do the documentation; in sight and service, documentation normally includes legal and survey. Thirdly, you pay for infrastructure, and lastly, you pay for service and maintenance.

What I have discovered in the industry is that buyers wish that you never ask them to pay for the last two. But truth be told, if the last two are not addressed, you may just be on a wild goose chase. This is because the investment is at risk if those two aren’t paid. The payments are in the subscribers’ interest that these things get sorted out clearly.

Hence, when you are buying, ask thoroughly where and when these payments become necessary. If the developer doesn’t even plans for infrastructure and maintenance it means there is a question about his expertise.
The last two payments are what determines if the landed investment remains a bush forever or it develops into a livable and returns-yielding environment.

People usually want to evade these but they end up having to understand that they have to pay for documentation, due to the fact that it comes immediately after paying for the plot. There is no gainsaying that the last two payments are quite important  to the success of your investment.

There are no hidden charges, In fact there shouldn’t be, but there are ‘important charges’ which will determine the success of your investment.



Destiny Okpalaeke

MD/CEO, Destiny King Homes

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After paying for land, this company is asking for more money

Please help me.

After paying for land, this company is asking me for more money.

In 2015, I got a flier from a marketer for one of the real estate companies in Lagos here. The property on offer was in a good location, and the price was fair. So I showed interest by calling the marketer to give me more details. We arranged for a meeting where I asked all the questions pertaining to the land before I started committing funds to it.

Early this year, I finished paying for the property. But all I got after that was just a final receipt and a mail to congratulate me for payment. After two months, I had to call the marketer’s line to ask what happened. But to my surprise, it was another person that picked it. I was told that the lady – the original marketer – had resigned and that I would have to come to the office to discuss.

When we sat for a meeting with the staff of the company, they started telling me stories about how my money is not yet complete even after paying for land. And that I can’t get any land until I have made other payments.

I told them that the marketer did not tell me about any extra payments, but they insisted that if I want my land, I must make the other payments.

The problem I have now is that I really want the land. But they said I can’t immediately get my money even if I ask for a refund. The extra payment they are asking me to pay is also much. Now I am confused totally.

What should I do?

Response #1
I think you made a mistake by not doing your due diligence. You thought you did by asking all the ‘right’ questions but that’s not all there is to this. It was your money against a marketer’s word.
The marketer on the other hand was desperate to make sales and that was why she made paying for land a priority over everything else. What you should have done was to come down to the office. This, you did later but that was after the problem had occurred.
Since what you are looking for now is a solution, ascertain properly whether the real estate company is credible, to begin with. Then, ask for what you need to do. This situation is one that would get you angry but really, there is nothing you can do more than express your agitation. Hopefully, the customer service of this mentioned company is on point to help you navigate through.
This time, be patient and now follow through properly.

Response #2
Firstly, it is not advisable to go into a real estate transaction without employing the services of a solicitor. That was where the initial mistake was made.  It is always good to bring in a 3rd party; better safe than sorry.
At this point, it is still not too late to involve a lawyer/solicitor so they will know how serious you are.  Then together you can have a round table discussion where the history of your transactions with them will be laid bare and possibly bring in the marketer in question. For now, it is still their word against yours.

Response #3
 You didn’t do enough due diligence before paying for land. Every buyer should search for more information beyond the words of a marketer when buying a property. A quack marketer is often looking to just sell and earn commission. It doesn’t matter if the buyer suffers later for anemic information. That’s the situation you now find yourself.
I’m sure there must have been a product FAQ for the land your bought. Taking time to read it may have saved you a lot of stress. But now, you will have to sit with the company and understand what it takes. If you can go on with the transaction, please do. If you can’t, you can wait for a refund.
Please note that this segment of the site is called ‘REAL ESTATE PALAVER’. It is a segment where you get to send in your real estate related issues or concerns. We have respondents who will offer advice that can help you find solution to the issue.
Kindly note that the advice offered is not sacrosanct. It is just an opinion which you are not compelled to follow. You can still seek further perspectives to your issue. This will just be a guide.
To send in your concern/issue, please send us a mail at md.destinyking@gmail.com
Thank you.

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How To Get Finance For Your Real Estate Business

Finance is very essential in every business venture and real estate business is no exception. If you are considering finance for your real estate business then this article is for you!
A lot of people believe real estate business requires a huge capital, while that is somewhat true, I am about to show you some of the ways you can raise the financing required to actualize your real estate business.

All businesses are set up for one of two reasons or both; making profits and growing the business and real estate business is not an exception. Without money or with the shortage of money, businesses, real estate business inclusive, will be threatened.

If any business will stand the test of time and gain clients as is the goal of all global real estate businesses without folding up, getting finance will be required at some points in the life of the business. It is therefore an advantage to know how and where real estate businesses can get possible financial backups.

I will be dealing with where the funding can come from in this article and leave the job of “how” till some other time.

Getting finance for your real estate business can be very easy and smooth to go by, depending on the possible channels available and the conditions stringed to them.

There are several processes that guarantee financing a real estate business and the possible sources of such grants. Your real estate business can be financed from some of the following;

Bank loans
Bank loans are expedient in a situation that you own properties that may be pledged as collateral for the sum you wish to borrow. In this case, the real estate business must have been in operation for an acceptable length of time or you have cognitive experience in the particular area you are intending to carry out your investment.

Proper financial records must be in place.

This means have been embraced by real estate companies that have their grounds strongly built and have assets that is worth more than the sum of money they are sourcing for as loan.

This process can be as frequent as a business refunds back the sum loaned to them in regular installments as signed and agreed.

There are also loads of disadvantages stringed to this means of getting finance through bank loans which includes a possible delay as a result of the bureaucracy bank’s credit request approval procedures require.

The bank wants to ascertain that the firm or rather real estate business meets with all their requirements and without any shadow of doubts will be able to keep to signed agreements.

The banks may not be the place to go for new entrant companies without cognitive experience and/or bankable collateral for the amount being borrowed, etc.

From Friends and Family
Another means and one that is more flexible is getting finance from friends, family, colleagues and people that are generally within your sphere of influence. A good percentage of personal businesses get funding this way.

The fact that this is a more personal fund raising arena comes with its challenges.

While credibility will help your funding raising prowess here, sympathy plays a bigger role and naturally limits the amount (size) you can raise.

People give mostly out of empathy, not strict consideration and justification of the proposed business. Their expectations are not so high too where it exist at all and that limits what people can and will be willing to give.

Whatever can be raised can however help in the business project. Many real estate businesses have been able to leverage existing relationships and obtain a sure way of finance either in form of a loan, grant, etc.

More so, these transactions are most times done with little formality and without written agreements.

With this advantage, it does has some inherent problems as you place the relationship in jeopardy if things does not go well as expected and the business defaults.

Through Angel Investors
An angel investor is a wealthy individual or group of individuals that invest in businesses that may not meet with the current requirements of banks and other forms of funding a business but could meet their requirements with a capital and management influx.

A real estate business can get finance through an angel investor. There are many angel investor groups who focus mainly on financing real estate businesses because of the advantageous peculiarities of the real estate business sector.

Through this channel, many real estate businesses have attained to the crest of their endeavours with gross satisfaction and appreciation to those angel investors.

Through Partnering
Finance can also be gotten through merging or partnering.

Another possible way of getting finance with little stress is by this means. One critical requirement for the success of this type of funding is to have a clearly documented and communicated agreement.

Issues of the share of responsibilities and rewards must be clear.

Also, it may not take the form of an outright partnership but means, systems and initiatives like Investment Clubs, Associations & Societies, Joint Venture (with a party providing the land while another provides the finances needed for construction), Co-operatives, etc can also serve in providing good funding for your real estate business.

Getting Finance Through Clients
Ever heard of Other People’s Money (OPM)?

Sometime ago, I had a chat with a friend of mine working with this very prosperous company and he shared how their clients make down payments well in advance before they get products supply.

That is a classic example of using OPM to fund your business. Your real estate business can also utilize that approach.

It takes a little while, consistency and good demand for your products/services to maximize this means of raising finance. This usually happens during real estate booms or where housing demand far out stripe supply like in the case of Nigeria. A number of developers use prospective tenant’s money to complete an apartment the client will be renting.

If your aim is getting finance for your real estate business, I trust the ways offered here have given you a light on the possible means and ways to go about that.

To your success!

DESTINY OKPALAEKE
MD/CEO, Destiny King Homes


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Take The #SackYourLandLord Test

When it comes to finding the right apartment to reside in on lease or permanent basis, many of us misplace our priorities. And due to the excitement of finally getting a place after months of rigorous search especially in a densely populated place like Lagos, we fail to ask the right questions, now that’s just a part of it.
There are some questions a landlord will never ask a prospective tenant or wouldn’t even want a prospective tenant to ask. These are facts that when exposed to a tenant will take him/her on a soul searching trip, and at the end of it all, reality will dawn on the tenant.

In today’s article, I want to share with you questions your landlord will wish you never answered!

Let me start by saying this: have you heard this expression-that a lot of people cannot afford what they want… and they don’t want what they can afford? Hmmm… what a tragedy!… and that has been the bane of many people remaining as tenants throughout their life time.

Well, in this article, I am going to present to you a set of questions which if well understood and appropriately answered, will enable you speed up your journey to becoming a landlord.

How do I mean?

These set of questions and answers will help you get real fundamentally. They will also help you identify what you can afford while leaving you with the choice of wanting it. Plus, I feel good within me because the fact that you are reading this piece suggests to me that you are already interested in seeing where you’ve missed it… so let’s move on.

In our modern day society, especially Nigeria, for you to legitimately own any property, you need to be above the age of 18(eighteen). This makes you an adult by law and I want to work on the assumption that I’m communicating with those that have legal right to own property.

However, before I get into the nitty-gritty of today’s work, I would urge you to get a pen and a pad to scribble down your answers because you will be needing those answers in subsequent questions that will come up as we go on. You will also need to do some minor arithmetic work in the process… so question number one goes thus:

Hold on a sec…just before that, again I encourage you to provide your own real answers to the questions. I will use hypothetical answers to enable you better understand the questions and be able to offer your own real answers.

Now to the crux of the matter:

QUESTION 1: How old are you?
For the purpose of this article, let’s use 30 years as a hypothetical age to answer this question.

QUESTION 2: Where would you like to live?
Is it in Lagos State? If Lagos, where in Lagos… is it Ikeja, Okokomaiko, Ikorodu, Epe, Lekki, Mushin, Agege, Surulere, Victoria Island,Ikoyi, e.t.c. Where exactly would you like to live?

QUESTION 3: What size of property would you love there?
Let’s say for instance, Isolo is the preferred location of my place of abode. What type of property would I like to live in there? Is it a flat, a bungalow or a duplex? What size of house would I really want? Is it a room, a room and parlour or a self-contained apartment? You need to specify the size of the house. Let’s say, for a certain Kunle, a flat in Isolo will do and don’t forget,…the age in retrospect is 30 years old.

QUESTION 4:(a)What do you think would be the cost of your type of house? (b)Are you going to buy or build it?
At this stage you may need to do some research if you don’t have the answer at your fingertips. How do you go about this? Just go to the internet and log on to any property search engine such as: www.findnigeriaproperty.com, that’s one option.

Another good option is a newspaper, preferably the Monday edition of The Punch or Guardian. On flipping through, you’ll see some property ads. On the other hand, your best bet could be a well populated property journal. If you can lay your hands on one, run through it and see what a flat in Isolo is being advertised for.

This gives you an idea( and an idea is all you need at this stage) of what price it may go for if you are to buy.

Now, let’s assume that our hypothetical case of a 3-bedroom flat in Isolo is selling for N8.5m; this statement portrays that Kunle is buying the house instead of building it. And that answers question 4(b),

That leads us to the next question …

QUESTION 5:What is your expected total earning this year?
Since this year is still running, let us use last year as our guide. So let’s rephrase the question; What was your total earning last year?

Let’s take a look at this scenario; Kunle is a salary earner and his total emolument in 2016 came to about N6m which is a total representation of everything that he took home from his salary as well as every other venture that he dabbled into.

To answer this question correctly, you should be able to identify the other streams of income that you have and how much each of them fetch you annually so that you can add this up to your other sources of income and get a total inflow of what comes in for you every year.

With this in mind, let N6 million be the answer to the question of what Kunle’s hypothetical earning for the previous year was.

QUESTION 6:What is the 33% of what u have in question 5?
Simply put, the question here is the 33% of Kunle’s total income? Remember, we are working with a hypothetical case of N6.0m per annum.

Therefore, 33% of N6m is:
N(6,000,000 X 3)= N1,980,000

Having answered this, my next question goes thus:

QUESTION 7:How many years do you have left to work before you clock 60 years?
We are using 60 years for our analysis because that is the retirement age. Now at 30 years which is our hypothetical age as stated in QUESTION 1, how many years do you have left to work before you turn 60?

These questions are very vital because they will help determine certain things in this process.

Therefore; (60 – 30) years = 30 years.

So, for instance, Kunle is 30 years away from 60 and this answers QUESTION 7.

QUESTION 8: Multiply what you got in QUESTION 6(N1,980,000) by the answer in QUESTION 7(30 years).
That is:-
N(1,980,000 X 30) = N59.4m

Now, this is where we are going…

By these simple steps, I have just determined the limit Kunle can achieve in terms of property by any legal and reasonable means currently. That is to say that even if Kunle can access mortgage and borrow to the maximum limit that he can, and that maximum limit is a figure that would not take more than 33% of his earnings to pay for his loan over the rest of his estimated work life before he retire.

Note that we’ve not worked in interest here, because if we work in the interest element, of course, the total figure will increase. But the limit of N59.4m that we got is really the cap and so interest must be inclusive in such a price for it to fly.

What this simply says now is that the property Kunle can buy with his earnings if he has to take a good mortgage now should not have a loan repayment that is more than N165,000 per month. Otherwise, he won’t be able to pay within his present means.

The 33% limit is because the internationally accepted expenditure on property is put at a maximum of 33% of an individual’s income.

Overall, these calculations and deductions translate to say that getting a 3-bedroom flat for N8.5m in Isolo(which was our hypothetical case) should be child’s play. Kunle should be able to achieve it with his eyes closed!

I am quite sure you found our discussion interesting and very simple, however, the value must not be lost in its simplicity. The earlier you settle down for what you can afford, the better for you because as you advance in years, your age determines your chances… and where your earning potential is not increasing at a progression that is higher than the rate which you add on years, then your affordability rate may be dropping.

A lot of people reach a peak in their earning at a particular age; and if they’ve not secured property at that particular age, it implies that as they’re going forward age-wise, what they can secure as property using any possible legal means will be diminishing in value.

I hope and wish that you study and apply these steps sincerely as these are questions that your landlord is praying to God that you do not have to answer. Why? The answer is simply because if you can and start to answer these questions, you have started on your part to SACK YOUR LANDLORD TM.

This is why this question and answer procedure is called the #SackYourLandlord Test. It is the first stage of your house ownership dream…SEE YOU IN YOUR OWN HOUSE!!!

DESTINY OKPALAEKE
MD/CEO, Destiny King Homes

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Bargain of the day: The Real Deal in Real Estate

You want to know the best business decision you can make in 2016?  That will be investing in real estate through Realty Point’s “Bargain of the day” offer. This piece gives useful insight to this off-the-hook initiative.
It’s a new year of new beginnings, new opportunities and new innovations. The Pendulum swings forth signaling another chance at taking that step from tenancy to becoming a landlord before it swings back.

As part of their contributions to the problem of mass housing deficit in the country which stands at 17 million units, as well as their commitment in helping tenants become landlord, one of the foremost real estate companies in Nigeria, Realty Point limited launched a programme on the 12th of December, 2015. The programme which has being tagged, “Bargain of the day” offers an opportunity of a lifetime to people who hope to invest in land. Bargain of the day features discount offers on any one of Realty Point’s products at some specific period of the year. This laudable initiative by the Maryland based Real estate stalwarts is projected at selling plots of land on a daily basis at mouth-watering discounts at least four times in the course of the year.

This can be done easily by visiting the company’s website; www.realtypointltd.com where you can start to buy plots of land at a bargain through the coupon codes that will be generated during every edition.

The incentive is aimed at giving new reasons to members of the public in their bid at becoming landlords. Bargain of the day will spring to life at the end of the first quarter of 2016 beginning from the Easter Edition in April which will set the stage for the Summer Edition in June. By the time the country celebrates her 56th independence anniversary, their customers would have enjoyed three editions of Bargain of the day. And if you are still found wanting by the independence day edition in October, the yuletide edition at the tail end of 2016 will ensure that you get a final chance at being a land owner.

Invariably, the yuletide edition which will come up sometimes in December will be the last “bargain of the day” for the year.

So, do you want to buy land to build or invest? Then, don’t let this golden opportunity become a relic of your imaginations sometimes later in life when the hair turns grey. This is your biggest real estate discount offer. Invest in your future and reap the fruits of your investments when its all said and done!

If you read this piece to the very end then you just got one step closer at achieving your never-ending dreams of becoming a landlord and Real Estate just got better!

So that’s the deal as regards Realty Point’s bargain of the day largesse for the year. If you still don’t see any reason you should be your own landlord after this huge discount offers on their various products, then you need more than just this piece to make that turn around. Remember, procrastination is the thief of time, collar him

Bottom line; It’s your turn to sack your landlord in 2016. Never do tomorrow what you can do today. Don’t let this once in a lifetime opportunity pass you by.

Last year’s Bargain of the day which started in December and was the first by the company offered a 30% discount on plots of land at Roseberry Estate Alapoti-Agbara. This opportunity is open till 31st of January, 2016.

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Things You Should Know Before Building A Duplex

Just like every real estate property, building a duplex is a great investment for homeowners and landlords, albeit it still comes with its unique advantages and disadvantages. This article highlights the things you should know before buying or building a duplex.
Duplexes are houses that are divided into two separate units, but essentially share the same building. Building a duplex can come in different forms and for different reasons. Most people go for duplexes, whether they are buying or building with the intention of living in one of the units and renting the other out, while some other people just rent out the whole lot. We also have other instances where the owner leaves in one unit then keeps the other furnished as a guest house.

The aforementioned premises make owning a duplex a viable option of investment in property. The possibilities of its ownership are quite flexible. However, just like everything in life, it is not all rosy with any investment in duplexes. Though the basic understanding of what a duplex is tends towards good, that doesn’t mean you shouldn’t still weigh the pros and cons of owning a duplex before you hurriedly put your signature on the dotted lines

Here is a brief of what you know before buying or building a duplex;

PROS

1. You recover money expended
By renting out the second unit, you will be on your way to recovering your finances, especially if you had to break the banks to invest in the property. Money gotten from rent will help in your recovery phase and help you plan ahead. Though, you may not be able to permanently count on that income.

2. Duplexes are cheaper
Duplexes are generally more affordable than a lot of houses in the same area. Considering that a duplex is basically two houses, the fact that they′re cheaper than most single family houses is worth thinking about.

3. Rent to a friend or family member

A duplex may just be the best option for you if you need to be close to a friend or family member yet still need your privacy either as a single or married person.

4. Future benefits

When all is said and done or at that time of your life when you’ve attained full stability, you might decide to move out and rent both sides of the duplex for an even bigger boost to your income

 CONS

1. Rental income not guaranteed
If the only way you can afford building a duplex is to rent out half, then you might want to consider something else. This is due to the fact that rental income from your tenant is not a sure bet. A tenant may come into your property with good intentions only to become your greatest nightmare a year later when his first rent expires.

2. Less privacy

You should also consider the fact that privacy is not guaranteed in duplexes. Only a wall, which is probably thin, or a partition in some cases will be separating you and your neighbour. Actually, you will be sharing close quarters with this tenant cum neighbour. In fact, you would know some of your tenant’s life’s challenges and most of his daily routine that it will be so difficult to feign ignorance when trouble comes knocking on your door. If you are not cautious enough some of your secrets may even get to your tenant. Also, in some cases you may virtually become too close that asking for the rent when due could possibly become difficult, especially when the tenant is going through some financial difficulties that you are aware of.

Again, your tenant may like to keep late nights or he’s usually not the quiet type which goes contrary to your lifestyle. So, you would have to be pretty sure the person you are offering tenancy is someone you will be comfortable living next to and not some misfit.

3. Potential lack of tenants

What happens if you do buy or build a duplex with the intention of renting out the other half, but can′t find a tenant? Finding a tenant isn′t a sure thing, and if your post-purchase finances is dependent on your income being supplemented by rent, not being able to find a tenant could be disastrous.

Though there are some obvious downsides to owning a duplex, it still doesn’t change the fact that many people still find it easy and profitable living in one area of their home then renting the other half to a good tenant. If you admit the right kind of tenant, it will save you the drama. A good tenant will not only support you in the maintenance of the duplex, he will also be cooperative and possibly become your best buddy

Do you own a duplex? If so, what are some of the biggest challenges that you’ve faced in dealing with the property and with tenants?

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How Tenants Can Maintain a Healthy Relationship With Landlords

Most of us speak ill of our landlords like we do not aspire to be landlords someday. And I want to believe no one wants to remain a tenant for the rest of their lives, or are there exceptions? This article talks about how tenants can build or maintain a cordial relationship with landlords
It is so easy to castigate Nigerian Landlords who own residential rental property for the mismanagement of their properties and insensitivity towards the plight of their tenants, but do we sometimes try to put ourselves in their shoes?

More often than not, tenants and landlords want a well-maintained property that is well secured. No landlord will want to run a business with no return on investment, hence they do what they deem fit to ensure that the property fetches them income, even if it is at the detriment of the tenants on the property.

That notwithstanding, landlords want to be treated courteously and with some form of respect. Tenants must put into cognizance that no matter how insensitive, irresponsible and clumsy a landlord seems, they are still lords over the property that was leased to them on a temporary basis.

Because a property was leased to you for a year or more doesn’t make you sole proprietor of that property. That must first be established in your subconscious if you are to enjoy a cordial relationship with your landlord

Here are four tips on how a tenant can maintain a healthy relationship with his or her landlord;

1. Remember that nothing is resolved with anger
Just like in every relationship on earth, there are times you will have heated moments with your landlord. These are times when your ability to sort your differences or manage the situation will make or mar the relationship you’ve established with your landlord.

Sometimes things will go wrong with the facilities within your apartment or within the premises of the residential rental property and worse still, repairs may take longer than expected. There will also be instances where the landlord might want to be unduly excessive with his communication with you. Regardless of the situation you have with a landlord, even if you are aggrieved by the situation on ground, communication is key!

Communicating calmly will help both parties resolve issues faster. In conversations over potentially contentious issues, try to maintain a level tone and be polite – basically, being adults.

2. Mutual respect goes a long way
No tenant should be dragged into a situation where he or she has to disrespect or humiliate the landlord. As a tenant, where possible you should show consideration for the owner’s investment. Don’t go handling facilities within and outside your apartment like you don’t live there.

No matter what you think of your landlord, it is only appropriate that you imbibe an ownership mentality because you will someday become a landlord too.If you show disrespect to the property by mistreating it, like walking away from water flow from the filled tanks of a borehole or messing up the compound and constituting a nuisance generally in the premises, remember that you will one day reap what you sowed.

3. Keep your expectations in check
Everyone is busy. Realistically, you can’t expect the owner to be at your beck and call for every issue, no matter how small. It’s likely the landlord has other work commitments, and property managers are usually dealing with hundreds of properties at any given time. High expectations can create a frazzled relationship that induces a sigh or a frown from the landlord every time they see a name pop up on their phone.

4. Get everything in writing
The first rule in all of this is to forget the ‘handshake’ agreement, and get everything in writing. This will protect you with names and dates if a promise or action goes unfulfilled.

Bottomline: A healthy tenant-landlord relationship thrives on good communication, sincerity, mutual respect, and an ownership mentality. If you understand that your landlord is human and has needs too you will approach issues with your landlord differently other than being driven by your emotions.

Landlords try their utmost best to build a conducive environment for their tenants and business, it is only fair that you keep them happy in your attitude towards them and their business

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