Let me first start off by saying that it takes great vision and foresight too be able to spot and identify high return real estate deals, but before we get into that, tell me….
If I had the ability to see the future and could tell you with 100% certainty and accuracy what will happen 10 years from now, what question will you ask me?
What would you like to know?
Lottery winning ticket number?
The price of Bitcoin in 2035?
Will WW3 break out?
Am no genie so let’s come back to reality, imagine knowing how to identify and spot very lucrative real estate deals in the Lagos market.
Undervalued properties and locations that you can get in on early that guarantees you 10X, 50X returns on your investment. What difference will such knowledge make in your life and your investment? That’s what I am here to talk about today.
Paul Adefarasi acquired about 60 plots of land at Lekki Peninsula, that’s Phase 1, in the 2000s for just ₦25 million and now the land he bought then for just ₦25 million is worth over ₦5 billion.
Am sure that you must have come across successful real estate investment stories of people like this and wondered how they did it.
How did they spot such a deal? What made them buy? How can you yourself spot such deals going forward?
If these are some of the questions you have been asking yourself, then congratulations because in this article I will be answering all of them.
The truth is that successful real estate investment stories like that of Paul Adefarasin don’t just happen by chance.
They’re not about luck or stumbling upon a gold mine. They happen because someone knew how to spot the right deal at the right time.
To get the best returns on your investment, you have to not only have the vision to see opportunities before others even perceive it, you also need the boldness, ability and willingness to take actions quickly.
A delay and hesitation is very dangerous and can lead to millions lost in capital appreciation.
With that said, the secret to finding high return deals in Lagos varies. It depends on your needs and purposes.
Are you looking for capital gain properties or cashflow properties? Are you looking for a stable low maintenance property like land to seed, preserve and grow your wealth or are you looking for a cashflow property like houses or apartments you can acquire and let out?
Before embarking on any real estate investment it is advisable to know exactly what your purpose for that particular investment is.
If you are looking for capital gains, then no doubt what you should be investing in is land.
How to get the best deals on land real estate investments
To find and get the best deal on land you need to look at emerging locations. The money, the high ROI is in the emerging locations.
When Paul Adefarasin bought his 60 plots at Lekki Peninsula, the place was still far, far from what it is now. That is why he was able to buy his 60 plots as cheap as he bought them.
This might surprise you but Lekki Phase 1 has not always been Lekki Phase 1. As a matter of fact, as at 1989 the place was a slum called Maroko.
It started its journey towards its christening from Maroko the slum to Lekki Phase 1 the high end neighbourhood on the 14 day of July 1990, when the then military governor of Lagos state, Colonel Raji Rasaki forcefully evicted the occupants with a precise and decisive military force.
So in the 2000s when Paul Adefarasin acquired his land, the place was just a marshy land with only hints of development, yet he went ahead and bought his 60 plots. Today that ₦25 million investment is a ₦5 billion nest egg.
Now your next question should be, how did he know that that location is a good place to buy and hold?
The answer is quite simple but before we get to that, please tell me, how do you know that a woman is pregnant?
The sign is in the belly. Just look at the belly.
Same goes for real estate locations. To know the place that will be the next big thing, look at where all the new development and government infrastructures are going.
Follow the government money.
Whenever and wherever a government or a big corporation is investing in, that is a clear and unambiguous sign that the prices of land in that location will skyrocket depending on the size and scale of the projects being done there by the said government or corporation.
The bigger, the better.
When looking to get the best deal on a land investment. You need to be early in emerging locations and you need to be patient. Give the investment time to properly appreciate and compound.
Apart from the fact that he bought very early, the other reason Paul Adefarasin’s ₦25 million investment is ₦5 billion today is because he waited. He has been patient, otherwise he would have sold them off a long time ago.
When making land investments think long term. Think 10 years. Think 20 years because that is the timeline that will give you the best returns.
If you acquire a plot or more of land in an emerging location and 2–3 years down the line you are already talking about liquidating it, you aren’t going to make any returns.
If you do, it won’t be anything substantial, just peanuts.
So for best deals when investing in land properties, go to emerging locations not already developed locations.
When you finally buy these emerging locations, don’t be in a hurry to sell. Be patient and give these locations 10 to 20 years to develop.
Another thing you should bear in mind when investing in emerging locations that will help you maximize your investment is this — Buy in bulk.
If you are investing in emerging locations and you are buying a plot, is that for garri or for eba?
Minimum investment should be 6 plots. That’s an acre, anything less is not a good move on your part. Remember, one of the main attractions of emerging locations is that they are cheap, very very cheap so you can’t really say that the money is too high for you to go big.
Think about it this way. The more you buy, the more your investment will be worth later. If you buy a plot for just ₦2 million now and 15 years later you sell it for ₦90 million.
It simply means that if you had bought 6 plots now, 15 years later your investment will be worth ₦540 million. Instead of a paltry ₦90 million, you will be making ₦540 million when you resell.
So that’s it on how to get the best deals when buying emerging locations.
If you know that, like me, patience is not one of your virtues then to be honest with you, you have no business investing in emerging locations. Increase your budget to hundreds of million of Naira and go into fully developed locations like Lekki, Oniru, Ikeja, Magodo, Omole and the likes.
These are places that you know that when you buy the land now, a year or 2 from now you will be getting offers on your land.
That is how big the demand for land in these locations are. The only thing you should bear in mind is this, don’t expect to make the kind of returns you would have made in emerging locations.
Emerging locations can give you 50X returns. 100X returns even more, but well developed locations can’t do that. That is because they have peaked in their appreciation. Of course when you resell, you will make returns but nothing like 10X.
For example, someone bought land at Ikoyi in 2020 for ₦1.2 billion/sqm and 6 months later he resold for ₦1.8 billion/sqm. A 50% return on his investment.
That is a well developed location. That is the kind of returns you should expect when you invest.
The pro is that there is much less risk involved than in emerging locations.
This is for when you don’t have the patience to buy and wait for your land in an emerging location to develop and appreciate.
To get the best deals in well developed locations you should keep an eye out for lands and estates that are being sold pre-launch.
Pre-launch is the best time to buy because the developers in order to raise much needed funds to start constructions and infrastructures development always offer the cheapest price during pre-launch sales to encourage and incentivise investors to get on board and buy.
A typical example is Makarios Luxury Place by Pastor Matthew Ashimilowo. When he launched the estate he sold pre-launch at ₦50 million. Today the same plots are ₦150 million.
The last tip I will give you here and this applies to whether you are buying in an emerging location or buying a well developed location, is this — get your land documents right.
I will repeat it, get your land documents right. Before buying any piece of land, make sure that the land has a registered title document be it C of O, Gazette, registered deed, registered court judgement, Government allocation. Name it.
I can’t really go too deep into land titles here. Already talked about some of them in my previous articles.
No matter how lucrative a land investment is, if the land is no longer yours after you have paid fully for it, then even if you bought it for ₦1 and later it is now worth ₦1 billion, you actually lost in that deal.
You actually lost money in that deal, and that is the money that you paid initially for the land and whatever you later spent on lawyers if the case went to court.
I can’t emphasize this enough, before getting any land, make sure it has a good title. If however the land is a virgin land in the sense that it is a freehold and there is no title on it yet, immediately after buying the land, start the process to perfect the title to C of O.
Even when you buy a land that has a C of O. Still work on it and perfect the title on your own plots to Governor’s Consent.
That’s it for how to get the best deals when investing in capital gains real estate properties, that’s land.
Real estate deals – how to get the best deals on houses.
Now let’s talk about cashflow real estate properties like houses and apartments.
To get the best deals when buying houses or apartments, buy them off-plan. Nothing beats off-plan. Nothing.
In 2023 we launched a project in Ikate Lekki, the project consists of six units of 4 bedroom terraced duplex with BQ.
Immediately after we started the project, we offered 2 units of these 4 bed terrace duplex off-plan at just ₦135 million each. Not only that, we offered these units ₦135 million on a 12 months payment plan.
Fast forward to today, the project is fully finished and guess how much these 4 bedroom terrace duplexes are selling, ₦250 million. So imagine if you had acquired off-plan at ₦135 million on a 12 months payment plan and now reselling at ₦250 million.
To get the best deals on houses and apartments, buy them off-plan. You will be getting it much much cheaper than the price it will be when fully finished, not only that you can even complete the acquisition without the immediate financial strain because you will get it on a payment plan. So the money will be broken down for you into bits and you can pay monthly.
The number of months you can spread your payment depends on the stage of the project as at the time you key in. If you started from the time the project was launched you can get as much as a 12 or 18 months payment plan but if the project is already nearing completion then you will either get a 6 or 3 months payment plan.
Alternatively depending on the developer, you can arrange and negotiate to pay per milestone as opposed to monthly basis.
Now compare this to buying a house or apartment in its finished stage where you will be required to not only buy at the finished, higher price but also you will be expected to pay everything outright.
Which one is better for you?
Nonetheless this does not go without saying that buying off-plan properties do have their own risks. Everything in life comes with risks.
There is nothing without risk and the highest risk of all is not to do anything because you are afraid of the risks involved. Intelligent measures can be taken to eliminate and mitigate risks.
Which is why I will advise you to be careful about the companies and developers you are buying off-plan properties from.
What is their track record? What have they done before? How well were those properties delivered? What is their standing in the market?
These are all vital questions that you should be clear on before proceeding to get any property off-plan.
When you work with the right companies and developers, the best decision you can ever make as regards your property acquisition is to get it off-plan.
That’s it.
This is how you get the best real estate deals in Lagos whether your need is capital gain real estate investment or cashflow real estate investment.
I am Ugochukwu.
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