The first chats between the Nollywood actress, Bimbo Ademoye and the founder of Middlechase Property Limited, Chudi Kalu on real estate and how to maximize the opportunities embedded in the industry left the audience in a state of extreme amazement and the wisdom coming from these speakers were like light of revelations dispelling their darkness of ignorance.
To further tap from the wealth of their knowledge, the audience humbly requested for a second edition of the chat. This time, the veteran actress did not just come alone; she came with a guest- her biological father- who is also a real estate enthusiast and whose business acumen has made him a fortune in the industry. The following questions were answered by the real estate investor and the king of rental income.
Related: MY REAL ESTATE STORY 1.0
What prompted you to go into real estate?
Independence! I had always wanted to be independent and free of financial instability. I didn’t want to be a tenant at all times. When my mates were buying cars, I diversified my own money into real estate. I have always been in support of real estate right from the day I knew the importance of it. Even if you don’t have money to build, you can buy landed property, keep it and watch it grow in value and appreciation.
Would you buy a property in your children's or wife’s name?
I would buy a property in my wife's name because whatever property we acquire is also for the sake of our children. If I want to buy for my children, I will discuss it with my wife and whatever will agree on, is what we’ll implement.
Buying a landed property or an apartment, which one would you advice?
Except you are a multi-millionaire, don’t buy land. I would rather advice that you buy apartments where you know people can easily subscribe to and take advantage of. if you are a beginner in real estate and you have a substantial capital for start-up, invest in apartments. On the other hand, if you don’t have much capital, start with landed properties.
Where is the best place to acquire a property on the mainland?
In order of their rental yields, locations like Surulere, Mushin, and Ikeja (Opebi area) are the top three areas on the mainland to buy a property. Then Gbagada and others can follow.
Is real estate only for the rich?
Real estate is not for the rich. It's for those who want to be rich. I went into real estate because I wanted to be rich and have a better life for my family. To achieve this, I made a research on the best investment that could generate me an unending cashflow and I realized it could only be real estate.
Is it better to invest in physical properties or hands-off properties using REITs as an example?
One thing about investing in physical property is that you can take control of it even if the property is not yielding cash. What gives people Return On Investment on a property is usability. If you have a property and it’s not usable, it’s called a lazy asset that cannot generate rental cashflow. One thing I love about real estate is that it gives you control.
Do you believe in selling off real estate after a few years, probably because of the location?
Depending on the location, I can sell off real estate for higher rental income. I once had 12 plots of land at Mowe with the intention of building a shopping complex. After watching the value of property appreciating slowly in that area, I decided to sell it off and invest the money in a location that commands high rental income. So, my submission is that before you invest in real estate, do your due diligence and if you eventually get a property in a very good location that could give you consistent cashflow, keep it.
How much is needed for real estate investment?
In terms of capital, no money is too small or big to invest in real estate. Your #50,000, #100,000 or #150,000 is not a waste. There is a system called fractional ownership- a situation whereby one or two persons can come together and invest. In order words, it is a method in which several unrelated parties can share in, and mitigate the risk of, ownership of a high-value tangible asset, usually a piece of resort real estate. Like I often say, wherever you start from is your platform.
In summary, the purpose of investing in real estate should not be geared towards entitlement mentality but also for cash flow reason being that the investment you make money is what pays over time. Cash flow is simply when you are enjoying consistent income for your investment.
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