Shaffykay Calls for Improvement In The Real Estate Sector.

Shaffykay Calls for Improvement In The Real Estate Sector.

LAND is a finite resource. People need a place
to live, work, shop and play, so even in a bad
economy, real estate investment usually fares
better than stocks.

It is really just a matter
of supply and demand.
What’s more, real estate continues to
appreciate despite occasional slow-downs in
the economy.

In fact, it’s proven to be the
best way to create wealth, and an investor in
real estate need not be a genius to succeed.

Following are some tips for entrepreneurs on
getting started and succeeding in real estate

Plan financial goals
Before you buy that first property, or do your
first analysis, determine what you expect from
your investments.

What are your financial
goals? In the “time vs. money” concept:

more you have of one, the less you need of
the other to reach your financial goals.

means that you shouldn’t shy away from
taking the time to understand your goals and
make sure each investment is a step
toward achieving them. If you are
unsure exactly how to create financial goals,
meeting with a financial advisor is an
excellent first step.

Act on information
You absolutely do need to learn some basics
before venturing into investing. So, be sure to
do some studying, but don’t let “buying and
collecting” information become your

Again, having goals in mind will
make the process much more straightforward.
It’s easy to get so tied up in the “research”
phase that you never actually take action.

Instead, write down specific questions you
want answered or goals you want to meet
before delving into the latest book/seminar.

Consider many options
Don’t just grab the first property you look at.
Too many investors buy properties because
they “look nice,” or the investors don’t want to
put the work in to look at what’s really out

Remember, you won’t be living there, so don’t
make your investment decision based on your
personal preferences.
While you shouldn’t fall into the trap of
analysis paralysis, make sure you are thorough
in looking through properties. Give yourself a
wide range of options, and then narrow them
down based on the criteria (goals) you have
set for yourself.

Don’t wait for perfect deal
Many rookie investors suffer from “a-better-
syndrome. This can backfire in a big way, and
you could potentially let a great deal slip just
because you’re holding out for something

Your task may feel difficult if this is your first
property, but you must realise that the
“perfect deal” rarely exists. Better to execute
on a deal that meets most of your criteria than
wait for another that may never come.

Thorough financial analysis
Be realistic. Look at different alternatives to
determine which makes the most financial
sense. And never buy property at a higher
price or on less attractive terms than what
makes sense.

Be wary of sellers that try to over-estimate the
value of the property through pro-forma
(estimated) data. While you can certainly use
a pro-forma to start the conversation, make
sure you know the real numbers before

The most important figures you should know
are: Net income; Cash flow; Return on
investment; Cap rate (net income/property
price); and Cash-on-cash return (cash flow/
investment). In each case, “investment” refers
to how much you invest in the

 ”Debt financing” refers to any loans
you may have to take to buy the property.
And “total return” refers to cash flow, equity
accrual (i.e., equity gained from your tenants
paying their rents), appreciation and taxes.

Once you have understood these figures, you
should have enough information to determine
whether or not acquiring the property fits with
your financial goals.
Target motivated sellers
If the seller is motivated to sell, you’re not
likely to get the price best aligned with your
financial goals.

So, how do you know if a seller
is motivated? Look at the asking price.

For example, if the property has been on
the market for a year for, say, N20 million with
little-to-no price reduction, the seller is clearly
not very motivated to move the property.

However, if that same property has been on
the market for a year and has had its price
moved down considerably, the seller most
likely wants to do whatever it takes to get the
property off his or her hands. Of course, this
raises the question of how to find motivated

There are many approaches, and not
all of these will work for you, depending
on what property you want.

Differentiate investing from business.

As an entrepreneur, you already have a
business, and real estate investing is best
used to support that business, not replace it,
unless that’s your intention. In other words,
don’t get so caught up in executing
transactions that your core business falters.

If that happens, you’ll be facing a bumpy road
to get back to stability. Unless your business
is itself real estate or you’re looking to get
into the business full-time, always remember
that pursuing these deals is a means to an
end, not an end unto itself.

So, if you’re interested in staying ahead of
taxes, inflation and the economic downturn
while building security for the future, investing
in real estate investing may be your best

For The Best Property Investment,You Can Reach Shaffykay Properties Through:

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