Hey, hey, good num folks all wherever you are listening from Legos,
the US, the UK, Canada, welcome to another spaces with me kalu
Aja. I call it the money spaces. And here we're talking personal finance,
the economy and of course how that all relates to your personal wallet.
We want to make it personal to you when we talk about economic topics,
just how does it affect you and how can you take advantage of it?
So a real great trick this week. We've got the guys from AM Realty.
They've been here before and essentially what they do is they have this unique
take on real estate yield right how they have a real investing interesting take on
realists and investing in Legos. That's where they're basically running the operations. So
I've talked with them. I said, hey, we've done the first chat.
They pitched something. Let's bring them back see how that has gone.
See how we can also learn quote unquote copy from them. If we're outside
legals, I want to do this or how we can also partner with them
and essentially gives us an idea into how else we can invest in Niger.
You know, if you know the market right now the dollar is basically getting
valians getting weak and fixed in comrades are also dipping Downwardso any investment that gives
us an outlet where we can end more yields, we want to talk about
it. So great place to have am Realty common guys are on mute.
Say hi and let's get speaking. Hi. How are you? How are
you doing? So you're very shy. You did the mute real quick.
Wanted to introduce yourself, tell us about the company, tell us what you
guys do. Then I have a few questions. Then I of course the
audience will want to ask you some some crisis as well, so you've got
to closer or thank you very much. Call um everyone, and of Realty
that the Realized Development Firm indigos. We specialize UM and they're developing properties and
then showing that our investors optimize every penny spend. And one one problem that
we realize before firm about three years ago was we realized that resent investment in
Mageria was was more will developers markets you know, developer you know used property
and sales to investors or clients, they really don't pay attention on Most developers
will pay attention to how much returns that the depayer gets overtime, right,
and that was the loople we discovered, and we decided to start the roaders
to develop met company and at the same time pay so much attention to the
returns. So we transitioned into asset management. So after development, we have
declined to maintain, manage and market the apartment to ensure that they get optimized
returns monthly, culturally or yearly. So that's the summary, gotcha. So
you basically take over the property and you're able to squeeze out more rentals from
that property in legals because the background is this, right. If I was
to invest one hundred millions and to build a property in legals, and I
basically went ahead and I gave that property out as a rental unless that guy
pays me ten million nina a year, Really I'm doing less than ten percent
yield return on that property. But if I did the same investment par takul
the same hundred none and I've bout to say a government bond is that naira
or even dollar, I'm making more money. But realsies seem to be this
thing that's supposed to give us, you know, returns and also beat inflation.
So this is why this topic is very very interesting that how else can
we if we're investing reality and how else can we squeeze revenues? So tell
me, let's let's going to knots and boats. How do you guys do
it? Give me the knots and boats? What do you do? You
get the building? Who owns? The building is owned by? If I
have a building, I own it, I give it to you guys.
What happens interesting about what we started? Yes, I can. Yeah.
So when we started, like three years ago, we're building for rents,
you know, like everything got apart or every lowlad wants to do right.
So this beauty property putting it out for rent, and I get like,
I'm all right out. We realized take a last time, the booming shoplet
markets. That was after the COVID camp. Yes sorry it cale came in
that I had to heah. So so we didn't realize that the COVID nineteen,
you know, give birth to a new markets. I mean that was
the shot that markets. We realized that people could make even for X what
it would make on I'm not rental by doing shoplets. But The problem is
shotlet has a lot of it has like higher printing expenses, so you're not
like managing multiple shoplets. You're really not optimizing um whatever you're spending to manage
or maintaining properties. So we decided to like two model the baits with being
like twenty five twenty six units of studios and one bit of a partlets.
So we started two in it and turn the entire facility to shop that right,
Yeah, and we ensure that the prising and very competitive. So a
lot of our clients would usually go and pacternize your hotel like Police three Sta
Hotel in Leaders for like thirty thousand and we were offering a rumor de part
of fully service Netflix Wi Fi. You have a kitchain, you have a
barn, door, you have you know, you have basically everything for twenty
five thous and it was it was good business for us because we were managing
about twenty flats, so we're buying hundred K diesel e serving the entire flats,
so we're optimizing expenses, running the place efficiently, and of course delivering
returns to investors. So the business with it was simple. We pitched the
Vaga to run investor, you know, to buy up multiple units, so
you have twenty flats, twenty investors who own different facts. You know,
we didn't manage into building as an entity. As a business entity, you
know, ensure that the operating expenses is divided infinitely across all the units,
the manager doctor all operating expenses, the doctor management fee, and sending their
returns monthly. So for the past three months, I think the last time
we were on this space we were back launching, So this is like a
third month and we are paid dividends consistently every month since we started launch.
So um and the rent O Youths has been as fantastic. I mean,
I really an investor is making between two fifty k two three fifty k monkey
without doing everything, without lifting the finger where we are doing the entire marketing.
The last month we had like five percent all two pouncy rates. And
when I look at the data last night, I realized that a lot of
our clients typically would pactronize and retail room. I was I was starting to
requiring three days ago a gift and he said before he started patronizing us usually
would go to and turn around the catch when when it flies into the datas
for thirty five thousand, and it's seeing better value for money a room and
the panel you know has everything and you're paying twenty five thousand. You know
you're paying for ten nights and getting ten percent discount. It's it's good value
for money and a better substitute to convention our preast hotel. And because of
that we have to like scale up more projects because where a hotail would work
is where this would work. We're not getting the lodgery vacation, the naki
or uterial an. We're solving the real demand, a real need. People
fly into legals need a hotail. People fly into the drial need and hotail,
and we see our properties as better alternative to painted five thousand for a
single room hotel. So the model has been grellier. Vessels have been smiling
because we running smugly sentily started. So if I could summarize, it's just
more like you take an existing building that's a four bedroom flat and you're able
to convert that for bedroom flat to save four income ending spaces. More or
less you you are. We take down to what we do is we go,
we go and meet lands that are we go to meet landowners that have
properties that are under developed and under utilized because we don't have money to buy
the land out tracking right, So good medium and say you know what this
land is generating your five hundred up? You have twin flats giving you five
two paper more when you saw everything up in a year, you're any like
five hundred kid, and not this building off. I will develop it,
but I own that building for the next twenty five years, so I'm not
that building en off any five hundred kid. I'll triple your return. I'll
give you up on five millions a year. But I want to build my
own type of structure and manage everything because we have to you know, return
back dividends with verson. So we're not down the building rebuilt from the scratch
because you know it has to compute ourselve when it comes twenty four hours electricity,
we have that invert the stands. We have like an undrective genera.
So we're like funding livercing the entire structure. So we take down the building,
um list the land for say twenty five years, you know, triple
what the previous owner has been any of that land every year. You know,
during the period of the lease and then um some lease to the investors
that you know contribute from some biet of the property. Then will we start
operations. We then share dividends to all of them, every mounts. So
if I own the land, if I own the land, I get dividends
plus the rental. So what do those in landowner get? You pay me
the lease. You pay me a lease, so we pay them lease right,
So um, so it depends. So there's a work to do the
financing and the structure and the due structure. So look at what what what
you are bringing to the table. So what's the value of that lease?
So the property is what say on drive musion right for twenty five years,
we departies were twenty five years as the value of that lease. So we
then structure payment plan you know across that twenty five years you know, with
the owners of the land them yearly. The we operate on that on that
on that land for that period of gotcha. Gotcha. So then the investors
that added the ones that end the return. So if you have got the
land that's between you and the owner of the land. I come as an
investor and then earn the rental returns from investing in that particular project. Yes,
excellent, excell what else is there for? So how much in terms
of returns? And I didn't know more to ask about APIs? But if
I was to invest give can you can you give me figures? If I
did the community to break it down for me, just maybe I should Okay,
yeah, right, thank you very much to my names that you am.
Also, I wrote this to get on my wa um. Basically,
let me probably pro just break down what you know you haven't persons you look
out for when you are making sort of like a really estate investment generally and
investments in nature. But I just poat it down to rest. So this
is it you ask Carly said that you have a riskless government where the government
can just print money and pay you seventeen percent you know, fifteen seventeen percent
risk free right for five ten years depending on the you know, ten ten
of the bond. Right. So you as an investor, you see something
like that, right. So now if you want to take extra risk to
invest in something else that's not that's bond, right you you you request a
premier. Now you look at the inflation rates in the country currently. If
you have rate. The inflation rates for probably like over the past five years
moving average probably are like nineteen percent. Current one is like ten two percent,
right, but you still want to use like a moving average what has
been obtained for like past three five years. That's like nineteen percent then,
so that's like an extra four percent premio mode or less. It's like two
three percent premiome already on the government bond that you request. Then Also because
it's real estate, you need another extra liquidity premium on it, right,
because real estate is not you know you depending on how you where you're buying
that if you're buying the property out right, for example, you know you
are you are you have like upside in the capital gains of the property whether
right, So if it gains value over time, you can say it and
you know what a hard price, right, But for a lease, as
my wife's talking about. So I'll go into that now, but let me
just you know, so it means that when you are looking at these percentages
at the end, you're probably looking for something in the range and render youth
of you know, twenty one, twenty two, twenty three percent, you
know, around that range by year for that investment. To actually makes sense
to you that cash you youth by year. So that's that's let operating incommoditive
and the revenue that's going to the let operating incomar what you go into your
pocket because you know you have like operating costs, you have all of those
courts, you have taxes that are going to play the men. You have
all of that. So after you do that, you are looking for that
twenty three percent. So that's what you should be looking for right as an
investor you're going out, anybody wants to take your money should be able to
show you, like, oh, a mathematical way of you to generate or
for you to you know, generate the amount pay before they can deign to
take a money. So what we do year now is that because we are
less, you have no access to capital gain. So it means that every
catch flow at that property you're produced during that period matters. Every NIRA from
that place, you need to find a way to optimize it. So now,
because with the way we do with where data is working out at the
occupant syid, I can tell you that annualized, with what we've been able
to deliver to our investors, we are doing around two in five twenty six
percent before you enter. You now, because it is a lease for you
know, fifteen twenty years. The rate of return, that's the I the
rate of return or that is a part of thirty percent because it's for a long