To understand timing in real estate investments, I have to relate a story. Growing up my father told me a story about an old man who was famed and regarded in his town as the wisest man alive.
He had an answer to every question, and had incredible knowledge about everything in existence.
One day some kids decided to test him and finally prove that he is not as wise as people claim. So they took a live chick and went to him.
When they approached, the kid with the chick put the chick in the palm of his hands and asked the old man, ‘this chick inside the palm of my hands, is it alive or dead?’
The old man looked up from the wooden basket he was weaving.
After regarding them for a couple minutes he simply replied, ‘the fate of the chick is in your hands. If I say that the chick is dead, you will open your hands and allow it to fly away thereby proving me wrong’.
He said, then with a sideway twist of his head he continued, ‘at the same time if I say that it is alive, you will close your palm tightly for a few seconds thereby killing the bird then open it, thereby proving me wrong. So the chick in your palm at the moment is neither dead or alive. Its fate is entirely up to you’.
The same thing applies to time in real estate investing because when it comes to real estate investing, time can either be your best friend or your deadliest enemy.
I know what might be going through your mind at the moment.
How does time become your friend or your enemy as far as real estate investments is concerned?
From the moment you buy a property, time is your best friend. The reason is that time is what makes the property you buy appreciate through a process called capital gains.
Paul Adefarasin, the founder and Overseer of House on The Rock church bought about 10 acres of land at Lekki, Peninsula in the late 2000s for just N25 million.
Today that property is worth over N5 billion.
What happened? What role did time play in his real estate investment?
Time played the role of a bestfriend in his real estate investment because he bought that property when it was very cheap and held it for long, because of this simple fact, time was his best friend.
This is how time plays the role of a best friend in a real estate investment.
Now let’s consider another scenario. The other day I told the story of my client who missed the opportunity to buy an acre at Lekki for about N10 million. Then Lekki was underdeveloped and water-logged.
According to him. One of his friends told him that buying land in a water logged is a foolish venture, so he missed that opportunity.
What role did time play in this real estate investment situation?
Time played the role of a villain. An enemy, because he missed a once in a lifetime opportunity. If he goes back to that property now, and tries to buy it, N2 billion might not even be enough.
This is why you don’t wait to buy land. You buy land and wait.
What did you learn from these stories above?
Taking action, a positive action will get time on your side while inaction or delayed action will put time against you.
Real estate investment believe it or not is a very time sensitive affair.
The reason is that any land you are seeing now, any property you are seeing now is at its cheapest now.
If that property is selling N20M now, 6 months from now it might be selling for N25M or N30M.
That property will only get more valuable, and more expensive with time.
By acquiring that property now you put yourself in a position where time will be your best friend because with its passage, your property appreciates more in value.
On the other hand, by delaying and over-thinking and over analyzing just like my client who missed an opportunity to buy an acre at Lekki because the land was waterlogged then.
You put yourself in a position where you will have time against you and years later you will wake up and be like, ‘Why didn’t I buy that property then? If I had known I would have bought that land oo’.
You will be saying this because by then the land is worth 20X, 50X the amount you were asked to pay for it years ago.
Time passes no matter what, sun rises, sun falls and rises again. Investing in real estate is a choice. Whether you invest or not, time passes either way.
But by investing you align yourself with tomorrow, you align yourself with the future. You align yourself with time.
Investing in real estate is a way of guaranteeing that no matter what happens, the future will favour you.
Your business could fall tomorrow( God forbid. Amen). You could lose your job but your real estate investment will still be there. Your land will still be appreciating.
Mr Femi Otedola faced a challenge many people rarely face, let alone bounce back from.
In 2008 he lost about $1.2B and was in debt, one of the major things that helped him clear that debt was the liquidation of his real estate assets.
You can google and confirm this story right now.
His real estate investments saved him. That is the power of investing in real estate.
Investing in real estate is like entering jail with the key to your cell because the truth is that the future is uncertain and unknown.
You can’t predict it. But you can secure it.
You can act in such a way today that no matter what happens in the future, you will be fine because you provided for your future by investing in real estate.
You aligned yourself with time. You made time your best friend.
On the other hand, if you delay in taking action or God forbid, fail to take action entirely.
Then you have aligned yourself against time. Don’t be like my client who missed the opportunity to buy Lekki.
Invest in real estate so time can work for you and not against you. Always remember that it is your choice.
I am Ugochukwu.
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