Your Real Estate Investment Failed? Here Are 4 Steps To Take When Your Real Estate Investment Fails.

What did you hear? What were you told?

Has anyone ever told you that you can never ever lose your money investing in real estate?

That real estate investments are so safe, that there is no possibility of it ever going wrong?

Have you ever heard something like that? Maybe from a novice realtor anxious to make a sale or a sleazy developer eager to get you to subscribe to their project.

If anyone ever told you that it is not possible that you will ever lose your money investing in real estate, am sorry to say this but they lied!

I pains me to burst the bubble of lies you may have been in but to be totally honest and frank with you, real estate investments just like other forms of investments that exist, do go wrong.

By working with the right professionals and with the right guidance, you can minimize the chances of you losing money via real estate investments but you can never totally eliminate the risk.

It is not possible. All investments carry risk. Real estate belongs to low risk investments. Losing your money when investing in real estate is not a common occurrence but it does happen.

My mentor Dr Stephen Akintayo, multi-billionaire real estate developer and the chairman of Gtext Holdings, a conglomerate with various subsidiaries like Gtext Homes, Gtext Land amongst others lost ₦120 million Naira sometime in 2017 or thereabouts when he transitioned from his digital marketing business into real estate.

Adjusted for inflation this ₦120 million is about ₦300 million today. He lost it when he tried to buy some land. They took his money and he never got the land. To put this into perspective, Dr Stephen owns and is currently developing over 30 estates all over Nigeria.

I tell you this so that you will understand that this is not just a casual individual losing money investing in real estate, this is a developer losing money investing in real estate.

So if developers do lose money investing in real estate, why allow someone to tell you that you, a casual investor can never go wrong and lose a million or two?

It happens, I pray it never happens to you but what should you do if it happens? What steps should you take next? How do you navigate the situation?

When you lose money investing in real estate the first thing you should do is.

1. Don’t get emotional when your real estate investment fails. Be calm and rational.

I can’t stress this enough, first thing people do when things go wrong is react emotionally. They get angry, start making threats, cursing, shouting, blaming this person or that person. Taking out the frustrations on their kids, partners and all that but this actually is the wrong move.

When a real estate investment goes wrong, first thing you should do is be calm. Yeah, your hard earned money is on the line but shouting and making threats won’t do much for you.

Stay calm, this is where your realtor comes in if you got the property through a realtor but if you didn’t, that’s fine, get in touch with the company or developer directly and find out what exactly is the challenge. What exactly is the issue?

If you acquired a piece of land but despite the completion of your payments and others necessary fees, you are yet to get allocated, what exactly is causing the delay? You can’t access your land? Why can’t you access your land? You haven’t gotten your documents, why is that?

Whatever the challenge or issues with that particular investment is, find out the reasons behind it. If the realtor is not answering their calls or the developer or maybe they are answering but they aren’t giving you answers, then please by all means go to their office. If you aren’t in the country, get someone, a friend or family member who is in the country to go to their office.

First learn what the issue with your property investment with them is. That is the first step. Be calm, and found out the issues with your investment from the people you made that real estate investment with.

2. Don’t ask for refunds yet! Negotiate instead.

After you have reached out and learnt the challenges or issues with your real estate investment the next thing you should do is negotiate. Ask the company, what options are available to investors like you? What is the way forward?

Then negotiate for the most favourable option to you out of all the options they gave you. This is where many people get it wrong too. Another error many people make when real estate investments go wrong is ask for refunds.

This is not so wise, you should understand that whatever the amount in question, even if the real estate company agrees to bring out that exact amount and put it inside your bank account, the money has lost significant purchasing power.

For example let’s say that you acquired a property of ₦50 million with them then something went wrong and you asked for refund and get it, that ₦50 million even if it is ₦50 million in figures, no longer has the purchasing power of ₦50 million. Why? Inflation.

If however you do ask for a refund, please know that they may not refund you the full amount that you paid for that property and that your refund will take some time to be processed depending on the company and the terms on the contract of sales that you signed.

So taking a refund is not very wise, instead ask for a change of property. If that particular estate you acquired from them has issues and you can longer get your property there, then ask them to allocate you to another estate.

If it is a house then they should give you another unit. Here too you should be careful and vigilant, because they may try to move you to another estate or give you a house that is much cheaper than the one you acquired. Reject it.

Rather than be moved to a property cheaper than the one you paid for, you should fight to get allocated to a property more expensive than the one you paid for and add little money on top to make up for the different.

Negotiate for a settlement and compensation that best favours you but please don’t be too selfish and unreasonable. Just like in any negotiation, know when to acquiesce and when to stand your ground.

This is why you need to

3. Work closely with your realtor.

This is where the realtor, agent or property consultant that you bought that property from comes in. You need an ally in your communications and negotiations with the company or developer that you bought the property from.

This ally should be your realtor. This is because your realtor knows things that you don’t and can reach these developers when you can’t. They should be able to offer you genuine advice, insights and expert tips that will enable you make better informed decisions.

Most importantly they can negotiate for you with the company or developer, because they already have a working relationship with the company they can leverage to get you a better deal. This is very important.

This is why the realtor or consultant you acquire properties from matters. Here at Rose Garden Realty, we are client centric, meaning that it is you first.

So in your negotiations, work closely with your realtor as your ally to get a better deal for yourself. Don’t antagonize or try to bully them, unless they are very unprofessional and unethical, you won’t need to.

If however they are part of a bad bunch, well,

4. Go public with your story.

You should only do this, only go this route when all else has failed. If you have tried to talk with the company and they aren’t attending to you.

You have tried going through your realtor too and still not getting any good results or maybe they started attending to you then stopped despite the fact that you have made very reasonable demands for settling whatever issues or disputes.

Or maybe all parties have negotiated and reached an agreement but the company doesn’t want to fulfill its part of the bargain.

Don’t bother taking them to court. Do you know how many real estate cases that are in court? Some have been there for decades, while the court is dragging her feet, the company will be balling and doing whatever they want with both your property and your money.

So no, going to court is a waste of valuable time and money. Same as involving the police. The police won’t do much for you.

Most of these companies CEOs and developers have a lot of connections and political clout. As a matter of fact, the police will make empty promises just to collect money from you but they won’t do much.

So don’t go to court. Don’t go to the police, then what should you do? Go public with the incident.

Don’t forget that these real estate companies are a business. No business wants to see its name dragged through the mud because they know that they will discourage new customers from buying from them.

So go public with your story but before you do this, tell the company that if they continue you will publicize the story, if they still not giving you the appropriate response then by all means go public.

Assemble your facts and story and share it with bloggers and other public platform, pay them! Pay them to spread the story far and wide. Nothing will force the company to sit up and fix the issue better than bad press, so create a bad press.

So this is what you should do whenever a real estate investment goes bad. These are the 4 steps to take.

First be diplomatic, reasonable and try to get in touch to understand fully the issues involved. Negotiate with the company or developer to come to a favourable conclusion and make your realtor(if you have any) your ally, but if playing the nice guy doesn’t work, then be the bad guy.

Share your story with the world.

I am, Ugochukwu.