Why Now is the Best a Time to Invest.

(A practical guide on how to create real estate wealth in a slow market.)

Recently an old client shared a story about how he had bought a property at the height of the real estate downturn. Less than a year later when the market started regaining momentum, he had a property that was essentially worth three times what he had paid, and even received numerous offers. He refused to sell, subsequently building his dream home on the more than two acre property in a choice part of Ikoyi. In future, this investor will extract more layers of value from the same property by developing a multi unit luxury apartment block. Even in today’s sluggish real estate market, you’d be hard placed to find that same sort of value in a similar location. His story is not unique. Investors understand that money is made during tough market times. We have definitely seen an increase in investors specifically looking for “Discounted Properties” and where better to find these than the prime residential market in Ikoyi and Victoria Island where many sellers are getting more realistic.

BENEFITS OF BUYING DISCOUNTED PRIME PROPERTIES NOW.

1. FEAR FACTOR : Every investor in what ever asset class knows that the real gains are to be made when the market is sluggish, when the ‘average, sensible and mostly fearful investor’ is holding back investment decisions. Most serious investors know this is the best time to pick up bargains in all real estate categories, especially prime residential real estate in Ikoyi and Victoria Island and indeed in several other locations. However, if you can afford it, it makes sense to go for the top of the cherry sticking to prime locations or as close to it as possible at this time because that’s where the deals are to be had mainly.

2. CAPITAL GROWTH. SOLID ASSET . Appreciation tends to happen faster and at a higher margin in prime real estate especially when you buy at a discount. Buying at this time in the economy essentially guarantees you immediate capital growth if done right. You could buy it to use as an owner occupier, therefore having a great asset and collateral if needed in future. Alternatively, you could invest as a buy to let investor. Many multinational corporates and top executives who make up the bulk of tenants in this space continue to require good quality rental properties but their budgets have largely been adjusted downwards, so by buying at a discount, you can attract them with a good value market related rental unlike those investors who over capitalised and have a tough time adjusting to reality. Always do the math to see that the numbers stack up and there’s a real discount and upside.

3. MOTIVATED SELLERS/INVESTORS : To supersize your returns, look for motivated sellers in the current market who want to move their property stock because of high interest rates and slow sales. There are also opportunities for buying off investors who bought at the early stage of an off plan project and who may no longer be in a position to complete due to change in financial circumstances. Where the transaction was denominated in dollars, it may also be possible to negotiate a further discount with both the seller and the buyer for cash investors and end up with an exciting investment property with high rental yields and immediate capital appreciation. These type of opportunities present a gold mine for the investor with a keen eye and ear to the ground. Even if you already invested in a project, which is still under construction, if you have holding power and perhaps an ability to buy more, this might be the time to ask your broker for more opportunities. You never know. (We have a couple of these types of opportunities on Fine and Country’s books currently and it’s interesting to see how keen investors are to find great deals.)

4. SAFE HEDGE AND STORE OF VALUE AGAINST INFLATION : For those with mid to long term funds, investing in real estate is a great bet and a good protection against inflation and low deposit rates. With the equities and bond market going through its own upheavals, and rising inflation, it’s clear that this is not the best time to leave cash in the bank, unless it’s emergency funds, or short term funds as real estate is fairly illiquid. That said, it’s probably best to invest in a discounted property opportunity with a large upside and take a short term loan in an emergency situation rather than erode the value of your money daily by leaving it in a low yield investment that gives you a negative return against inflation.

5. FOREIGN CURRENCY ADVANTAGE : And a word for those with foreign currency….wow, do you really need convincing? Now is definitely the time with your currency (USD and GBP at an all time high, why not look for Naira denominated transactions and get real value especially if you have long term ties/plans to Nigeria and can either use the property or lease it.).

Possibly the biggest reason to invest now is that when everyone is playing it safe, the big boys and girls come out to play, picking up the best deals, creating massive wealth, the proverbial rich get richer while the safe stay well, safe and jumping back on the band wagon when everyone else is, and usually paying too much when the market rebounds.

NO MONEY? NO WORRY! BE CREATIVE WITH FINANCING.

Here are 3 quick tips if you are thinking of looking at discounted property opportunities but don’t have enough immediate cash.

• FLEXIBLE PAYMENT TERMS . Remember that real estate investment is really about terms. Are you able to close quickly or do you want to put a deposit and negotiate a longer time to pay, and in some cases without incurring interest whether for off plan or already completed properties. Don’t be afraid to ask questions. Get the best payment terms possible.
• CASH IS KING : Remember that cash is king. Your ability to conclude with full payment upfront could make a massive difference to the discount you get.
• PARTNER/LEVERAGE : Remember that you may not have all the cash, but you could partner with another/other investors to take advantage of discounted properties, if the opportunity is really great. You might even consider a bank loan if your future cash flow supports it and the opportunity is really great.

GET REAL. PERSPECTIVE MATTERS.

Finally, everything depends on how you view things. Your perspective makes all the difference. You can see the sluggish real estate market as a reason to stall, stay safe and miss opportunities or you could seize this market opportunity to grow your real estate wealth. As two great biblical investors I know (Joshua and Caleb) said,” Let us go up at once and occupy, for we are well able to overcome the land. It is a very good land”. The question is which land, which real estate will you take over this season.

KEEP CALM AND BUY REAL ESTATE.
Udo Okonjo
Ps. Are you interested in exploring some discounted opportunities? Check out this great top grade investment buy or contact us with your specific requirements.

Commercial real estate according to Wikipedia refers to buildings or land intended to generate a profit, either from capital gain or rental income. Commercial real estate includes office buildings, strip malls, restaurants and any other real estate in which people conduct business. Investing in commercial real estate just like any other business decision, has its risks and benefits. There is the need for expertise and careful strategizing before a well informed decision can be reached on whether or not to purchase or lease a commercial real estate.

There are some basic steps to take before you purchase a commercial real estate and they are outlined below;
1. Analyze the risk and benefits of purchasing commercial real estate:
When making the decision to purchase a commercial property, it is important to take into consideration the potential risk and benefits that a purchase may hold for your business.
Some of the risks/benefits involved in investing in commercial real estate are as follows;
• Buying in to commercial real estate may be more beneficial than leasing if you are buying to maximize return on investment.
• Owning your commercial property adds to your asset appreciation over time, which means that your company’s equity grows.
• It is critical to buy commercial properties in the right location. The right location ensures that your business is at the heart of select target audience and is easily accessible by your clients, key suppliers, and associated businesses. The right location also conveys a certain kind of impression to your target audience which in turn benefits your business. It is also important to note that the locations that are “hot” today might not be so tomorrow and vice versa.

• Buying of commercial real estate when the finances to do so is not readily available can lead to loss of liquidity.
• If you intend to put up your commercial real estate for lease, it is important to understand that leasing is not always the best option for cash flow. Tenants can default with their payment date, or even out rightly decide not pay at all, and if you are depending on the income it can turn out to be very disappointing.
• The income that a piece of commercial real estate produces is directly related to its usable square footage which leads to higher yields.

2. Seek advice from a team of experts:
When considering the option of buying a commercial real estate you need knowledge and experienced advice before you go ahead with the purchase to enable you make the right decisions. Your team should be properly selected based on their track records and working styles. The team should consist of a Real Estate Professional who specializes in commercial real estate to help select suitable properties in preferred location within the budget and also facilitate negotiations between buyers and sellers; an Attorney to conduct due diligence on the property, prepare formal offers, reviewing all documents, and ensure contracts are sufficiently detailed, and structured to your maximum advantage; an Accountant to help figure out what your business can afford and analyze the tax and operating budget benefits; an Insurance Agent to insure your assets; a Business Advisor to provide solid perspective and advice in the financial process; and/or a Mortgage Broker/Lender to provide finance if required.

Overview of Victoria Island, Lagos

3. Choose the property wisely:
Some of the things to take into consideration when choosing the right commercial property for your business include location, accessibility, sale/lease price, size and layout of space, type of building, construction, available facilities including administrative support and meeting areas, car parking, security, opportunities for expansion, and lots more. Once you have shortlisted the commercial property that best suits your requirements, work with the owner on the right price.

4. Get financing for the purchase of the property:
Make sure before you apply for any mortgage (if needed) you already have the down payment covered, as well as proof of income to cover the monthly payments. Commercial properties generally attract a higher down payment than residential properties.

At this point, you need to have your lawyer explain every detail of the sales/purchase agreement (SPA) so that you know exactly what your rights and obligations are.
Commercial real estate like residential properties is also affected by the law of demand and supply. There is no one-size-fits-all strategy for purchasing commercial real estate. That decision must be weighed by individual businesses and their specific requirements and goals. Investing in commercial real estate is a long-term affair and it is important you get it right from the start.

Following the highly successful REFINED INVESTOR SERIES which held in November 2015 and feedback from stakeholders, Fine and Country International (W.A) in collaboration with the Institute of Real Estate Excellence (IREE) are pleased to invite you to participate in this mid-year Training/ Conference specifically designed for Real Estate Developers and Investors.

Target Audience? 

• Real Estate Developers – Niche, Mid size to Premium Developers and Individual investors looking to Position, Create and Sustain substantial profit from their developments in a challenging market.
• Anyone responsible for creating and delivering results in a Real Estate Organisation.
• Anyone planning to get into real estate developments or struggling to achieve results in a tough and changing market place.
• Top real estate professionals and brokers.

Please contact Nkechi Chikwendu on 08096000027 or nkechi.chikwendu@fineandcountryng.com for more information and to confirm your attendance. Also visit here for more information.

People increasingly value properties that offer “extraordinary moments and experiences.” That, we can confirm, admirably and accurately describes Eden Heights when it is fully completed later this year.

With unique features such as its Asian theme spa,  fully fitted fitness centre and entertainment room, Eden  Heights  offers 1-4 bedroom apartments and 5 bedroom penthouses (180ft in the sky on two floors). These units are 80% SOLD OUT

Fully fitted gym and Asian theme spa

Traditionally, there are a few ways to make serious money as an entrepreneur. They include business ownership; securities investment and speculation; and, perhaps the most personally rewarding, real estate entrepreneurship. As the market continues to buckle with  decreasing purchasing power and investments losing their value, there is need for a hedge against the effects of devaluation. Like gold, real estate tends to retain its intrinsic value even during periods of inflation. It holds its value and purchasing power during inflation.

Fully fitted kitchens and well designed en-suite bedrooms

Early investors are already befitting from their investment in Eden Heights as its growth has exceeded inflation and beaten the currency function risk with 50-75% increase from the initial off-sales price.  The rental prices currently have a higher yield leading to an increase in the Return on Investment (ROI).

With contemporary and modern technological features, Eden Heights is both a dream home and an astute investor’s top choice. It is also in close proximity to leading schools, financial institutions, business districts, restaurants and entertainment centers.

To view its well designed show apartment or for more information on this development, please contact us on 08096000024 or 08096000049.

Iconic, Innovative and of International Standards are some of the words that describe the Nestoil Tower

This sixteen floor development  consists of office spaces, multi-storey parking, recreational facilities and world-class security features strategically located at 41-42 Akin Adesola Street, Victoria Island, Lagos.

The open plan commercial space at Nestoil Tower. Constructed by Julius Berger, Nestoil Tower is of quality build and maintenance is guaranteed.

Its strategic location at the intersection of Akin Adesola and Saka Tinubu streets with unmatchable accessibility, convenience and to top governmental organizations, financial institutions, 5 star hotels, recreational centres, leading schools and the Eko Atlantic makes the Nestoil Towers easily accessible and in the heart of the commercial business district.

The view of the Eko Atlantic from the 8th floor of Nestoil Towers

Constructed by Julius Berger, Nestoil Towers has attained the LEED standard Certification (Silver) making it an energy efficient and environmentally friendly development and also an indication of Nestoil’s commitment to a culture of innovation and environmental consciousness.

The presence of a helipad makes for quick and convenient transit for any location directly to your work place.

FEATURES OF NESTOIL TOWERS

• Raised flooring and dry wall partition systems in all office spaces  to allow for flexible configuration of office spaces.
• Dedicated, state-of-the-art restroom facilities(with special consideration for the disabled) for every general office space in line with the British Standard Code.
• Central  canteen facility for the entire building
• Covered roof terrace which may be used  for top executive to host private functions.
• Special facilities for people with disabilities.
• Automated Access Control facilities  throughout the apartment levels in order to maintain very high level security
• Central atrium with water features to enhance the ambience of the Residences. • Ducted cold water chillier air conditioning system
• 24hr Security and electricity with 3nos. generating sets and 2.5mVA dedicated transformer
• Generous car parking space

The Nigerian real estate industry experienced a breakthrough at the start of the year with the launch of the Nigeria Mortgage Refinance Company (NMRC). This has brought a welcome change to the industry that has a housing deficit of about 17 million units (with additional 2 million units added each year) and would significantly improve access to housing finance this year.

What is Mortgage refinancing?
A mortgage refinance refers to applying for another mortgage to replace an existing mortgage on a property. This situation is common in times where there is a fall in mortgage rate. For example, if mortgage rates happen to be lower at the present moment than when the home was originally financed, or if the homeowner decided upon an adjustable rate mortgage accompanied with a lower interest rate than the current rate, the monthly payment will actually go down. Even an interest rate reduction of one-half of a percent can make a difference in the payments that is quite noticeable.

Type of Mortgage Refinance
Depending on your situation, different types of home mortgage refinance will be better suited to address your needs. Common ways to refinance your mortgage include:
Fixed Rate – With this refinancing option, the homeowner is given a fixed rate interest amount. This gives them peace of mind, because they know that ten or fifteen years down the road, their interest rate is going to be exactly the same as it is now.

Adjustable Rate Mortgage – The opposite of the fixed rate mortgage, the adjustable rate would allow individuals to experience seriously low rates. It’s a bit of a gamble, but if interest rates go way down, individuals will be able to enjoy the break. There is always the risk that the rates will increase, though.
Cashing-out Equity with Refinancing – This option allows individuals to cash out their equity and use it for major purchases, improvements, bills, etc. Individuals who decide to go this route can often still choose from a fixed or adjustable rate mortgage and can sometimes increase the term of their loan, making payments smaller and more affordable.

Creative Terms – Some companies offer creative terms for refinancing, such as interest only refinancing and more. The refinancing company should work with each individual to determine what kind of creative terms would best benefit their situation.
Mortgages are refinanced as it;
• Shorten the term of the loan
• Lowers interest rate and payment
• Provides an opportunity to refinance from an adjustable rate mortgage to a fixed rate loan
• Provides an opportunity to cash out home equity

Understand the Reasons for Refinancing
Homeowners often have different reasons for refinancing. Some simply seek to reduce their rate of interest. However, that may not always be to their advantage, as the related fees may end up being more that the gains from the rate reduction. In order to make the best decision, it is important to have an understanding of their reasons. It could be for consolidation of debt, home improvement, or for a major purchase. It could also be for other personal or financial reasons, perhaps taking a loan for cash to purchase a car. Some purchases may be used for deductions on interest payments on the tax return. It is always wise to consult a tax attorney, accountant or financial planner prior to making those decisions.

Benefits of NMRC
The foremost objectives of the NMRC is to bridge the funding cost of residential mortgages by promoting the availability and affordability of good housing through increased access to liquidity and longer-terms funds in the mortgage market.

Mortgage financing through NMRC would also extend maturities for Nigerian home-buyers to as much as 20 years. This means that a longer period of payment would result in a lower amount in repayments on a monthly basis.
The NMRC is also expected to help push down the interest rates for mortgages in Nigeria, from 20 percent currently, to 13 – 14 percent, helping to make mortgages more affordable for prospective home buyers.

What to be aware of when refinancing
Borrowers need to be aware that some mortgage companies may include pre-payment penalties in the loan contract. Offered as a clause in the contract, they may require a penalty payment if the property is refinanced or sold prior to a specified date. While most lenders do not insert penalties for pre-payment in the contract, there are some less than reputable lenders who impose excessive penalties – sometimes as high as 85% or six months of interest on the original balance of the loan. It is important to learn what penalties may be in the contract prior to signing. Employing the services of a professional real estate consultant would ensure that your interests are protected.