The TIME it takes to SUCCEED in real estate business

It’s been ten years coming for us in the real estate business. Looking back, I won’t say it’s been a jolly good ride, as it is with every real business there are bound to be hiccups, pitfalls, wrong turns, steep roads and of course a time of harvest. We’ve experienced it all and it’s been worth the ride.

However, there are people who are spectators in your life’s quest with keen eyes yearning to see the icing on the cake. They would say; “Debo you can’t be breaking the banks and yet your lifestyle and earnings are on parallel lines”. Friends often times don’t understand why you would have projects abound yielding immense profits yet your lifestyle over a period of time remains unchanged; that’s not excusable, right? How else can you prove you are making cool cash for yourself and not for others?

Some would even ask if I’m running humanitarian services. It gets me pondering how people view real estate business; a get rich quick scheme that puts an abrupt and permanent end to your financial misery? Well, it won’t be so much of a puzzle If that’s what you think real estate is or if your line of thought is not so far from this.

My reason is not far-fetched; during the course of this business, I have seen people venture in and out of real estate and for those who tarry on; what’s the first thing that would drown your thought when out of the blues fortune suddenly befriends them. A guy who was next to nothing before embarking on his real estate business, then he launches a product, mother luck smiles on him and its cloud nine all the way. He drives round town in the latest range and begins to live a life of luxury that the low-income earners yearn for and the rich would love to better, so why will someone think otherwise about real estate business?

However, how long does this really last? Is that one breakthrough or big deal in the fella’s real estate business a sure passport to a steady stream of income?

I have seen this trend happen severally and with my wealth of experience in the real estate sector, I can tell you that it’s a huge red flag!

That brings us to this week’s discussion; how long does it really take to succeed in real estate business? If we look at success only from the perspective of the spectators; for those who view it on the outside – after all seeing is believing – then we have not answered that question fairly and justifiably.

To answer that question, I would say that it takes as long as it takes because real estate is like any other business that is real, knowing fully well that we have businesses that are only fronts to scam honest Nigerians.

Now, time is relative; how long it takes for that real estate business of yours to succeed is dependent on you.

Don’t fret! I will drive home my point in a jiffy.

By way of analogy; Debo, Emeka and Hassan are Real Estate investors with a starting capital of 50million naira.
Debo is a man with big dreams, his philosophy is to expand his real estate business till there will be no further room for expansion.

Assuming the three of them made 70 million naira net each on a project they embarked on. Debo then takes the whole net profit (70million naira) and re-invest in the business. Emeka on the other hand has a different standpoint; he takes 10 million Naira out of his net profit to lavish and then re-invests the remainder in his business. While Hassan, squanders the whole net profit he made from his business and only re-invests the 50 million naira capital. The beauty of these is that the trio can all beat their chest and say they are successful, but that depends on their vision; what they have earmarked for the business, how far they want to go in the business.

Therefore the length of time it takes to succeed in real estate business absolutely depends on the individual involved, how he sees his business in his mind’s eye, his philosophy, his vision and above all how much money he wants to make in the business in relation to his long term goals for the business.

This is your drive for success.

For workaholics, there is no amount of success that can actually be termed success. So pardon them, if they say literarily that they will never achieve real success in the entire life span of their business career because for them success is synonymous to death. Success will mean dying; no amount of money made will be tagged “too much” to stop being in business. While for some others, few years in the business could mean reaching Eldorado.

However, Real estate can be tempting; sometimes, part of succeeding could mean not always stuffing all your money back in the business. You will at some point have to soften the pedals, especially if you are overly goal driven. It will be foolhardy not to take out time to enjoy some or a huge chunk (as the spirit leads) of the profits from your real estate investments.

Taking a look into my facts and figures, on the average it takes about 24 months to turn around that real estate business of yours. It simply means that, if you invested X amount of money in your business and you make a tad more than 20 percent of the money you invested, yet you made efforts to put back about 20 percent of that money in your business. What that means is that, it will take you an average of 10 years to probably double the X amount you invested in the business. For instance, you invested 100 million naira and no matter the profit made you always endeavour to re-invest 20 million naira into the business; that is, you have another 120 million naira to plough into the business in your first 24 months business cycle. This will ensure that in the next 24 months cycle which will be 4 years after you started, you will have returns of 24 million naira to add to 120 million naira which will add up to 144 million naira.

In addition, if you run another cycle, you will have 28.8 million naira to add to 144 million naira six years after; that bring you to a total estimate of 172 million naira that you are doing business with, isn’t that laudable?

And if you decide to also set aside a part of that, you will have 34 million naira that you would be adding to your 172 million naira estimate. This gives you approximately 207 million naira in total, which was achieved by setting aside just 20 percent of your profit and adding it to the amount you invested in the business, within a four months cycle. Consequently, in 8 years you would have doubled the amount you initially invested in the business and if you stick to your guns, the time it takes to double what you have becomes reduces steadily. However if you want to grow faster, you may want to raise the bar depending on how much profit your business brings.

In summary, if you consider doubling your funds as success, then it means you will be successful in eight years.
Let’s quickly highlight the points I stated in this discussion as regards the length of time it takes to succeed in real estate business.

The length of time needed to succeed in real estate business depends on;
1. Your philosophy; How do you view success? What do you term success? Is success a destination or an ever evolving journey? Your answer to these question sums up your philosophy.
2. The percentage or the amount of funds you are willing to re-invest in the business determines the height you will get to, in the business
3. Your proficiency will determine your returns because if you make bad returns you may not be able to re-invest as a result you will be starved of funds for your business which invariably means falling short of the mark for success
For the purpose of this discussion, note that your timeline for success varies on all of these factors that I have enumerated; How you succeed, what you see success as and the level of expertise available for you to do business with.

As for me, I’m still a long way from success no matter how much of it you see exuding from me or how much money you think I’m making from the business. I’m the man wearing the shoe and I know where it pinches.

I’m a re-investor; I plough my earnings back into the business. I’m a team player; my real-estate business is not just about me, it’s a multi-home joint venture business, meaning net profits don’t end up in the account of a single individual.

Someone once said, if you want to move fast then go alone but if you want to go far, go with people, I ‘ve opted for the latter in my push for success.

Debo Adejana
MD/CEO Realty Point Ltd