Money for Homes

Kunle Ogunbanwo, Real Estate Enthusiast: “I lost all my savings after buying six plots of land in Badagry”

I would rate developers not more than 2/10 if you compare what they promise to what they actually deliver and the time it takes to deliver. But if you think in terms of the ease of financing, I would rate them 6 or 7. With developers, you pay a bulk sum like 5 to 10 million naira to buy into a deal and pay the rest over a year or two. For a lot of salary earners, it could be impracticable to come up with 23.5millon at once to acquire a home. 

When did you arrive in Lagos?  

I was born in Lagos. I attended Federal Government College Minna, Niger State. After that, I proceeded to the University of Ilorin in Kwara State. I served in Kano with Army Day Secondary School, Bukavu Barracks.

What did you do after NYSC? 

I came back to Lagos in 2003. Six months later, I got a job at a bank. I worked there for about a year and left to join a consulting firm.

Please, tell us about your first apartment. 

I got married in 2007 and moved out of my parents’ house to a rented apartment. My first rent was ₦250,000 per year for a 3-bedroom flat at Olowo-Ira, around Ojodu Berger.

When did you buy or build your own house? 

I bought a terrace house in South Drift Estate around Ajah, from a developer. I moved into the house in September 2018. But that was not my first house. We finished our first house and rented it out.

Did you also buy your first house?  

For the first house, we bought the land at Otunla (Next town to Lakowe) and built it. But that was not my first land. I bought my first land in 2006, about a year after joining a consulting firm. It was at Badagry. It was six plots of land for N30,000 each, then I paid another N10,000 for survey, another N5,000 for receipt per plot. So, it was about N45,000 per plot. About a year later, I couldn’t find the land. I couldn’t find the people who sold it to me. The entire land was gone. I lost my savings for a year. I was hoping that I could use the land for cattle rearing at some point.

What did you learn from the experience?

 Of course, I learnt a great deal from the experience. I know that if you want to buy land and build, you have to start building immediately. So, when I bought my second land in Otunla in 2008, shortly after getting married, my wife and I agreed that we should start building a house. The plan was to move in within five years. So, we bought the land in 2008 and by April 2009 we started building. The plan was to finish in 3-4 years, but we couldn’t finish it on time. Along the line, my work situation changed.  I left second job, which was on the Island, and moved to another firm, which at that time was on the mainland. We couldn’t move to our house in Otunla as it was too far from my new job on the mainland.

From whom did you buy the land? 

From a family friend, who was my dad’s childhood friend. His family realised that their parents left them a parcel of land in Lekki area, so they suddenly became land-sellers. So, we bought from them. We paid 1.3 Million naira for the land.

What kind of property did you build on the Lakowe land?  

We built two flat – two units of two-bedroom flats. The initial plan was to build a simple bungalow on it, just to take possession of the land. When we started the foundation, I showed my dad the plan, and he said “if you are building a bungalow on a land of N1.3 million, it is a waste of money. Decking is probably cheaper than the land, so why don’t you just deck it and put another one on top?” And that was what we did. We modified the plan, reinforced the foundation and decked the first floor. It was a two-bedroom flat, so we decked it and put another flat on top. I still have a massive space in front of the house. The plan is to build either a twin 3-bedroom duplex or 4 flats on it.

How much did you spend building the Lakowe house? Do you see yourself using it as a country home?  

It cannot be a country home, because it is not in a countryside. The plan is to finish it up and let it out. And how much did I spend on that place? Sincerely, I wasn’t keeping records, but I know that at some point after I had done the decking and roofed it, I asked my dad (who was supervising the construction) if I could finish the house with 5 million naira. He said yes, so I took a loan of 5 million naira from the bank. We had built the entire house, roofed it and plastered it before I took the loan. The 5-million-naira loan was not all it took to complete the house, though. We eventually spent about 6.5 million.

What influenced you to make those decisions, to buy land early and build early?

My dad would typically tell you that he doesn’t know what he would have done with his life if he didn’t build his house when he built it. My father bought his first land when he was quite young.  Three years later, he started building. He built eight flats. His business started to fail a few years later. So, he just stopped worrying about the business and became Baba Landlord, earning rent and using that to survive while hustling on the side. He believed that if he hadn’t made that investment, when his business ran down, he probably wouldn’t have been able to survive. My older brother has a different view, though. He says it was around the time that he started building his house that his business went down, that he diverted all the funds from his business to the house, and that it was the house that killed the business. If you reflect on these things there is a lot of life lessons. I think my dad’s experience motivated me. When I started my first Consulting experience, I became close to one of my seniors – a very smart guy. I think he had only worked for 5 years but had built his own house and moved in before he got married and that was remarkable for me. So, I knew I couldn’t build my own house before I got married but the story of this my senior gave me the idea that I should start working on getting my own house early. My wife agreed to this.

But you will agree that compared to many professionals, you got your own house a bit early? 

Yes, somewhat. I was 27 when I bought the six plots of land in Badagry. When we bought the one we built our first house on I was 28. When we started building it, I was 29, and I already had a wife and a child. I completed that house in 2015. I was 36 years, so it took more than 5 years. By the time my office changed from the Island to Mainland, we agreed to slow down.

So how do you compare your last rented house in Olowo-Ira to where you live now?

For commuting to work, where I was living before was 32 kilometers from work, where I live now is 23 kilometers from work but it takes us about the same time to get to the office on a normal day. But in terms of convenience, you can’t be as convenient in somebody’s house as you will be in your own house. I mean it is my own house, so that brings satisfaction, convenience. Beyond that, we took our time to put the kind of fittings we wanted. So, it is a much more pleasant environment.

How does Olowo-Ira compare to South Drift Court in terms of infrastructure (drainage and roads)?

My estate has fantastic roads compared to where I was coming from, but the estate is not yet complete because of developer issue. So, the house was bought off plan. They were able to deliver the shell and then we finished it ourselves. The developer promised to deliver the house in 2016. We bought into the project in March 2016 when it was at the foundation stage. This was shortly after we finished the first house. The developer promised to deliver in 9 months. Now, we have been living in the house for about 1 year but the estate is not yet fully delivered. The drainage is not complete even the sewage is not complete, they just did it half-way. The treatment plant is yet to be done. In fact, what the residents did recently was to lock out the developer, insisting that they can’t come into the estate again until they finish the infrastructure. The developer was supposed to do all infrastructure, water, drainage, power, sewage etc. So little has been done. The estate has 102 apartments. The developer is saying that they have been affected by the state of the economy. The Naira value of the Dollar had risen from 160 when project started to 360 today. At some point, they were trying to make us pay more. But we told them that they wouldn’t have had to deal with problems such as the fluctuation in the exchange rate if they had delivered the project on time.

So, how would you rate the infrastructure in South Drift Court?  

For infrastructure, I will rate it 2/10, and 2 is what we did by ourselves. I paid for power, some of the residents came together to buy a transformer and other things. I spent over ₦500,000 on power, I did my own borehole, water treatment and everything for water. The water treatment plant and borehole cost ₦600,000. According to the contract, all of this was supposed to have been done by the developer. I also spent ₦450,000 to do the concrete floor of my compound. To do the infrastructure, I spent my own money, now I am begging them to come and do the main road in the estate and leave my close for me, the residents are already discussing how we will fix the road on our close. But they should at least come and fix the main road in the estate.

And everybody has paid for all these things? 

I paid ₦23.5 million. My contract says that the infrastructure – roads, water, drainage etc. – will be provided and delivered with the house after 9 months. Three years down the line, so little has been done in terms of infrastructure.

How would you rate the experience of Nigerians with developers over 10?

Not more than 2/10 if you compare what they promise to what they actually deliver and the time it takes to deliver. But if you think in terms of the ease of financing, I would rate them 6 or 7. With developers, you pay a bulk sum like 5 to 10 million Naira to buy into a deal and pay the rest over a year or two. For a lot of salary earners, it could be impracticable to come up with ₦23.5millon at once to acquire a home.

Does the financing make it attractive?

 Yes, it makes it very attractive. It is more convenient to pay. In fact, I have paid to acquire another property from another developer. This time around, I took a loan from a bank and paid the full amount at once.

How much and where is the estate?

 The estate is around Third Roundabout in Lekki, opposite Freedom Way. The duplex I paid for is ₦32 million. The developers promised to deliver the house in December 2019, that is this month. I was there about a week ago and some of the buildings were still at foundation level!

Does the industry need regulation – the businesses developing off-plan houses?

Yes, I believe so strongly. Perhaps if we have a very strong regulation in real estate, things would get better. Clearly, there is a need for regulation.

Would you deal with your developer again?

Never! It’s clear, I mean the only thing I found attractive at the initial stage was the convenient financing. So right now, I have my house and also a second house. I don’t need the convenience anymore. I will take my time, put my funds together, buy my land and build my house.

Where will you be looking to get a house later? Do you see yourself also buying to let, and would you for these reasons be willing to take a loan from a bank?

Buy-to-let is inevitable. I had let out the two flats that I built before moving to my own house. The rent I was earning from my house was more than the rent I was paying for the last two years that I lived in a rented apartment. The kind of work I do, I can’t invest in companies, I can’t buy shares. So, I said to myself the only viable option is real estate. Surely, I will buy to let, to sell, to rebuild. When the developer delivers the house that I have paid for around the Third Roundabout, my plan is to move there because it is closer to work. I would then let out where I currently live in or sell. I am also slowly building a country home around Ibeju Lekki, past Dangote Refinery. It is a small parcel of land. We are building just a flat. We will roof it soon. The plan was to finish it before October this year in time for my father-in-law’s birthday. But the man didn’t stay, he left us in March.

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