How To Start Real Estate Business In Nigeria With Zero Capital

How To Start Real Estate Business In Nigeria With Zero Capital

These days, real estate is considered to be one of the most profitable and growing businesses. In the Nigeria of today, you can make a lot of money by starting a real estate business, whether as a real estate agent or as an investor.

Starting your own real estate business is a good carrier option that comes with a lot of difficulties and challenges. The market is a well established one with tough competition from numerous new and established players. However, do not be intimidated by the competition rather focus on building a unique brand that stands out amongst the rest.

What is Real Estate?

Real estate is a property (consisting of land or buildings) or a huge collection of properties. On the other side, real estate business is the process of buying, selling or renting a property, building, home or land. Real estate agents assist homeowners, businesses and investors buy and sell all four types of properties.

The real estate business can be divided into further parts like loan servicing, residential and commercial properties etc. Examples of residential real estate include undeveloped land, houses, condominiums, and townhouses; examples of commercial real estate are office buildings, warehouses, and retail store buildings; and examples of industrial real estate include factories, mines, and farms.

Real Estate in Nigeria

Real estate in Nigeria is serious business. As a matter of fact, one of the longest-standing industry in Nigeria is the real estate industry. The industry has become a gold mine over the years, and many smart entrepreneurs have tapped into it and are making tons of profit.

Nigerians are always in need of residential apartments, office building, and commercial outlets. They look to either buy or rent buildings and structures of their choice, and they sometimes need to consult real estate agent or expert before making their choices.

This explains why the real estate industry abounds with business opportunities and has been ranked as the 5th largest contributor to the GDP of Africa’s largest economy.

How to start a Real Estate Business?

However, In order to be successful in this industry, one should have good knowledge and information in this field. This basic guide will equip you with the knowledge and information you need to acquire to start your own very successful real estate business in Nigeria.

1. Have a strategic business plan

You need to strategically plan your business to be able to conquer this market. Real estate investing is just like starting any other career in which you can’t start on a whim without having a specific business plan in mind.

A business plan is vital for any real estate investor, and one of the best advice you’ll get in the housing market is to start out small and plan, plan, plan! This step is especially important if you’re planning on becoming a real estate investor for the long term. In this case, you want to grow your real estate investment portfolio strategically.

2. Build a unique brand

Brand credibility is important in building a successful business in Nigeria especially when it has to do with the investment of millions of Naira. Branding is all about creating a perception about your business in the minds of people.

To turn your real estate business into a trustworthy brand, you need to give your customers more than enough value for their money and build a relationship by engaging with them on a personal level. Also, set your real estate business apart from the competition by investing in premium branding identities such as logo, website, adverts and more.

3. Legally register the business

If you really want to make this business to the highest level possible, then you have to legalize its existence by registering the business with the Corporate Affairs Commission (CAC). Registering as a Business Name with CAC is enough at this stage if you can’t afford to register it as a Limited Liability Company (LLC).

Also, watch out for the rules and regulations guiding professional real estate bodies in Nigeria to ensure that you are not operating against the law. Some of the popular real estate professional institutions to watch out for include; Association of Estate Agents in Nigeria (AEAN), Real Estate Developers Association of Nigeria (REDAN) and Nigerian Institution of Estate Surveyors and Valuers (NIESV).

4. Raise the required capital to start

If you did your business plan research well you must have known the minimum amount of money it will require to get you started depending on the scale at which you choose to start. If your savings and financial capacity are not enough to start, you can source for alternative fundings.

Real estate business is very capital intensive and requires a huge amount of investment. If you do not have enough it is important that you seek investors. You can look for equity investors that can give you enough leverage at the start and accelerate growth.

5. Get Started & Get Working

The last step to starting a real estate holding company is execution. Execute on everything that you’ve developed in your business plan. A good number of Nigerian businesses fail due to very poor execution. Execution comprises of your day to day activities in the business. This includes the closing of deals, marketing, networking, client orientation, human resources etc.

Starting a real estate business ain’t for the faint of heart. So, to be successful in the real estate business, you must be prepared to face the challenges. At a personal level, and as a business owner, nurture your ambitions and become a goal-oriented and organized person. Keep in mind that the real estate sector is not about achieving instant success. Instead, it is a long game, which requires a lot of patience.

How To Start Real Estate Business In Nigeria With Zero Capital

cc, in this conversations with JOY ANIGBOGU, talked about the real estate business and how people can start the business without initial capital, among other issues. Excerpts:

Can you talk about your business?

We are into real estate. We rent, lease and we are hoping to become developers in the future.

How To Start Real Estate Business In Nigeria With Zero Capital – How To Start Real Estate Business In Nigeria With Zero Capital

I worked with a real estate company for about seven years, but before then I had interest in real estate because I had a forester father who was a civil engineer.

I used to be with him and most times they do transactions in my house, and that was how the interest came.

I should have opted for a course in building or civil engineering, or even architecture. I started earning commission when I was in university. When I got into the real estate company I worked in the entrepreneur school. We later got into marketing and business negotiation. After seven years I felt that it was time to launch out and start my own business.

I partnered with other real estate companies. We are in partnership with Pertinence limited and Wealth-Island Properties Africa limited.

How profitable is the real estate business?

It is quite profitable, despite the economic challenges in the country because there are two things that are very essential in life and they are food and shelter.

The issue of house deficit that we have in the country is overwhelming. There is still a wide opportunity for people to launch into the business.

In spite of the fact that we have a lot of real estate companies, we have not been able to solve housing problems in the country.

This is because every day the population is increasing and as it is increasing the demand for housing will also be increasing.

There are so many areas one can go into the business. We have commercial real estate. There is agricultural real estate. We have hospitality real estate, where people engage in the construction of hotels. We also have recreational real estate, where people buy land and use it for gardens.

There are other aspects of the real estate that a lot of people have not even explored, like the real estate for preparing a final resting place for loved ones like the Ikoyi vault.

It is a branch of real estate. You know that it is not everybody that will want the general cemetery. Someone can just opt for the private cemetery for his or her loved one.

The person who is operating in that branch of the business has carved a niche for himself. In reality it is a branch of real estate that people have not really explored, and that is to tell you that the sector is very wide.

What does it take to go into real estate business?

When it comes to real estate people will say that it is very expensive to go into.

Yes, it is expensive to start a real estate business, but there are other ways that one can get into the business. I started my real estate business with zero capital.

I leveraged on relationships, and that is why it is very important to have good relationships with people wherever you find yourself. When it comes to business generally it is not all about money.

The first thing that any entrepreneur should be looking at is the human capital, and that is the major resources needed. If you have a very good human capital, I can assure you that you can start any business.

I leveraged on human capital, because of my relationship with the chief executive officers of some of the real estate companies, I was able to get plots of land from them for free. When I get the land, they give me reasonable prices; I mark up and sell at competitive prices. Through that process I was able to raise money to buy land in my company’s name and market to my clients. If you don’t have that connection with big real estate business owners, you can also decide to work as a realtor.

You can be an agent, sell land and earn commission. People start that way. I also started like that. I sold for several companies, earned commissions. When you sell and earn commission, you can keep your commission, buy a parcel of land, build on it and put it on rent, which is also a real estate business.

The business is lucrative and also comes with some challenges. If you are not ready to work and you are not energetic, then you are not ready to go into the real estate business.

It takes a lot of time. You have to be energetic because you have to go on-site inspection. You also need to have a good knowledge of the property that you are selling. You need to advise your clients properly.

People naturally don’t know what they really want and you need to assist them. You have to know what they want especially when it comes to the real estate business.

As a realtor you have to help your client understand what their needs are. If you don’t have a good knowledge of the property that you are marketing, you cannot advise them well. So you are not just a realtor, but also an adviser.

If you give your client a very good deal they will come back to appreciate you, because most of the time you get referrals through these customers. It is for this reason that you must be professional about what you do and have a good knowledge of the whole sector. Know about the documents involved, and be sure that the properties that you are selling are credible properties, with genuine documents to back them up.

As a realtor, you must be transparent enough and when there are issues let your clienteles know that there are issues. If the land is wet let them know. Don’t try to be cunning in what you do. Let integrity guide you in your dealings.

Talking about housing deficiency in the country and bearing in mind that a lot of the people are low income earners. How can they go about owning their own houses?

Most real estate operators don’t do mortgages because they are in the private sector and they don’t get support from the government.

Recently, there are few companies which do mortgage for a seven year payment plan, Pertinence Limited which I partner with, does mortgage for a seven year plan, and by the time you pay 50 percent, you will have access to the house and then you continue with the payment.

I know that a lot of people may not be able to pay monthly for these houses, but they can partner with real estate companies, become agents.

A lot of people have contacts in their phones but they don’t know what to do with them. You can send messages to your contacts, market the properties, earn commission and when you do that consistently for three years, you should be able to get at least a quarter plot of land. You can raise a structure on a quarter plot of land. People are also beginning to key into apartments; you mustn’t have the whole space to yourself.

A consistent agent in a real estate company can also approach a CEO of a real estate company and tell him that you want to subscribe for land with your commission, and ask him to extend the payment plan for you. You must have knowledge of the product before you think of production.

You must first of all get the knowledge of the needs of the customers and produce to their specifications.

What are the challenges in this business?

Most of the challenges that we have is in the area of documentation. Sometimes to do documentation for a property will take forever. That is where the government will need to come in.

People want to buy properties with genuine documents. We need the government to help us and hasten documentation for real estate companies when they file their documents.

The government should also do something in the area of infrastructural development. We had to construct a bridge recently somewhere in Isolo to be able to market our property, and that is the job of the government. We spent over N40 million to construct the bridge.

The government should also improve the state of the roads. They can even help sand fill water logged areas to help real estate sell their land at reasonable prices.

What is Real Estate?

Real Estate in Nigeria