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|Beware Of Real Estate Scam Or Land Banking Investment Scam! by backspace07: 2:09pm On Apr 26, 2020|
Many investors prefer dealing with real estate companies than customary or individual land owners ,while this might appear to be true, unfortunately, I have discovered that many real estate developers are worse and some of them are into land banking investment scam or what I can called ‘corporate scam’.
First of all, it is important to define what land banking is in general terms. It is the process of buying and holding (banking) land for development and sale. In other words, it is a real estate investment scheme that involves buying large expanse of undeveloped land and dividing it into plots for sale. It usually involves holding the land until the price goes up considerably in value before selling it. Many self-made billionaires have made fortunes using this business model and for this reason many people are going into real estate business without adequate knowledge. Unfortunately, at present in Lagos State, these schemes are often unregulated and there is little or no protection for you if something goes wrong.
LAND IS NOT FREE FROM GOVERNMENT ACQUISITION AND DO NOT HAVE APPROVED LAYOUT.
Some developers offer land for investment without knowing whether the land is free from government acquisition or not and they do not know if they can get approval for layout. I have realized, while conducting land verifications for investors, that most of these real estate companies with various sites in many locations in Lagos state don’t have land titles like Certificate of Occupancy, Governor’s consent, villages excisions or approved layouts. Whenever I request for their title documents, they usually come up with phrases like “excisions in progress”, “file number is this..”, or “call our contact in Alausa”. As a matter of fact and to the best of my knowledge, government has not published any gazette for over four years and recently in February, 2020, Lagos state Ministry of Physical Planning and Urban Development published a list of estates without layout approval from the state government. The requirement is that an estate land must have a title to be eligible for layout approval. If the land does not eventually get a title document and development approval, your investment could be an investment ‘go wrong’.
IRRESISTIBLE MARKETING STRATEGY
Beware of offers promising unbelievable high return on investment and convincing you that the investment is real, and the risks are low. Some have devised using celebrities to market their estates, unfortunately most of these celebrities are only after the money and don’t even border to investigate the developers. The intent is to use their public image and reputation to lure fans and create an impression for buyers, that for a celebrity to have acted as an ambassador for the estate, it must be genuine. Most of these ambassadors don’t even know anything about the land they are advertising.
LACK OF MEANINGFUL PHYSICAL INFRASTRUCTURE.
Let us take a look at some of the real estate companies in Agbara, Ibeju-lekki especially Elerangbe and Okun Ise that were marketed aggressively in 2013 or about 5 years ago, when you visit these sites now, the only thing you will see is a signboard, gate ,security house and probably a wall fence on the front side of the land. The question is this, “if you had bought land then, based on the infrastructure the advert promised then ,how come there are no buildings or infrastructures 8 to 5 years later?” Since some people must have bought some plots, why are there no buildings or any ongoing construction? These are salient questions you should ask.
LAND BANKING CAN COLLAPSE
Land banking schemes or real estate companies can collapse without.......
Visit : https://crystalproperties.org/2020/04/17/beware-of-land-banking-investment-scam/ to continue with the article.
|Re: Beware Of Real Estate Scam Or Land Banking Investment Scam! by backspace07: 3:02pm On Apr 26, 2020|
LAND BANKING CAN COLLAPSE
Land banking schemes or real estate companies can collapse without the promoted development coming to reality due to many factors. Processing land documents to make it free from government acquisitions, getting a layout approval from government and building infrastructures involve a lot of processes, money and could take years, and there are others issues involving land disputes and mismanagements of funds. This can cause insolvency and finally make the company to file affidavit of bankruptcy.
For some reasons, we hardly hear about some real estate companies that reigned 5 years ago and new ones are cropping up now and then with new marketing strategies. Sometimes, it is not that these companies set out to defraud investors but along the line, somethings went wrong and there is little or no protection for investors.
While some are genuine and have delivered excellent services to their subscribers, some have failed woefully. and shattered the dreams of investors. There those whose investment offers exist but the money you give do not go towards that investment. There are those who from the onset is to create a steady inflow of cash through a land banking scheme to sustain a lifestyle.
Getting a land verification exercise at the time of purchase can save you from a lifetime tragedy.
Contact us for your land and property verification exercise today!
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