Lets digress a bit, I will like to share on how to invest in real estate without cash …….using partnership.

This is something very useful and important in an economy like we have now. Just like I said in one of my blog articles, the time we are in calls for our thinking cap and as entrepreneurs we must wear it securely on every transaction.

Partnership, if properly harnessed can yield great dividend and where you have a real estate project at hand but no money, there cannot be a better time to partner with the right team with the required resources.

Partnership is defined by the Oxford dictionary as the state of being a partner in business or a relationship between two people, organizations etc.

It is a common feeling in Nigeria that partnership has not really been a success here. The reason can be traced to certain loopholes that are probably created while constituting the partnership. These usually come back later to hunt the partnership arrangement. Close study reveals that partnership always would have a chance of succeeding but for the loopholes; something that is not counted as significant, may become very – very huge, in terms of affecting the whole structure and the direction of the business that the partnership is out to achieve.

You may want to ask why we still sometime find ourselves opting for partnership in this part of the world if it’s dotted with many challenges. Why go for partnership; why not try other ways and means of getting things done? Well, it is simply because partnership provides serious leverage for the lack of cash, know-how, time, contact etc. What I mean by this is that usually, people go into partnership to be able to fill a deficiency via complementary efforts or skills. That is actually the hallmark of successful partnerships. The challenge is finding the partner you can click with. Somebody must be able to provide what the other parties lack. In that regard, a good partnership can evolve. In real estate, you can partner for so many reasons; part of which I have listed earlier. But largely, people partner for lack of cash. For example, I identified a project and I understand the project but I don’t have enough money to jumpstart the project and probably, I can’t get financing from any other source or to even get financing from another source, I need maybe, a take-off an equity to show as my contribution and evidence of commitment and or believe in the project. I can then walk up to a partner, to get this provided. The person would now collaborate with me, offering his own cash in return for profit on the business. This particularly, is a very good way for real estate entrepreneurs to sort out their investment issues in the kind of time that we are in because there are a lot of transactions out there that people are not doing and they are not looking at simply because, they don’t have the money. It could as well be that I have all the money but I don’t have the know-how as to how to go about executing that transaction and the transaction cannot wait for me to get the know-how and still come back to execute the transaction. So in this circumstance, I may probably be looking for someone who has the know-how, to partner with.

It could be that I don’t have time to go around; it could be that I don’t have the contact that can make the project happen. Any deficiency can be the reason to seek partnership. So, I would implore entrepreneurs to look at partnership, if they think that they lack any of these things that I have raised, in executing their real estate transactions, particularly, at times like this. However, in doing all these, I would like that you borrow a leaf from the things that have always bedeviled partnership, especially in this part of the world. There are instances and examples of people who had gone into partnership and have had to dissolve it because the other party or both parties can no longer continue under the terms and conditions earlier agreed upon. I would say that one very- key thing about partnership is that partners should have a clear-cut, written, well, documented and almost exhaustive, agreement that would cater for the following things: What the parties intend to enjoy How profits would be shared The responsibilities of all parties Exit, how the partnership can be dissolved, how one party can exit the partnership, if he is no longer interested, right of first refusal, etc. You must state all these things and other important ones. What are the parties expected to bring to the table; what is the time lapse for these things that are expected; in what way are they supposed to come? These issues must be identified and spelt out for the partnership to be clear. How do you distribute profit? If a partner dies unexpectedly, God forbid, what happens to the partnership; how should it be continued or dissolved? How can a new member be admitted into the partnership? These are the areas, you need to look at and have a clearly stated common understanding on. In doing these things, you would have helped yourself to be able to make sure that you are in a partnership that can survive, that you are in a partnership that can last and like I always say, real estate involves a lot of money, but all the money does not have to come from one man’s pocket. So you can explore the angle partnership in taking on your real estate investment. We do that a lot in Realty Point. In fact, a number of our initiatives are driven this way. Yes, we have heard to learn certain lessons, some ugly others not too bad, by and large, it has been a better route than any other option available. I would advise you to explore this opportunity, especially in a so called down economy.

I understand you can choose to participate or not, so for us in our organization, we have decided not to participate in recession also like I read a notable figure say in one of the national dailies.

 To your success!

I was told a tale when I was quite young in business. I had a very wise man say something that I’ve kept very close to my heart since then. He said we are in business to think; that business is for thinkers. If you don’t think, they say you would stink. That is why I would like to point you in that direction.

Business is about solving problems. If there are no problems, there won’t be businesses or business opportunities and the truth is that we are in business to solve problems. And the way problems are solved is by engaging in deep thought as to how they occurred, why they occurred, then you research into how thy can be solved. The man, who would always ask why, is the man who would always find out how. So I would like to encourage us that challenges would come in our businesses this year, no doubt; we would face challenges, up-hills; we would have difficult tasks. That is why we wake up in the morning and come to the office. When we leave our homes, we tell our folks we are going to work. Work is not play. Work is a task. It is a burdensome task and the most difficult aspect of work is actually being able to sit still and think out the how to. I would like to encourage you that no matter the challenge you are facing in your business, particularly, if you are in real estate, I know that it is capital intensive; I know that there could be challenges of documentation, there could be challenges of meeting deadlines on site, material prices, people issues and all that. So if you have such challenges, what I would encourage you to do is to engage the tool of thinking. You need to gather your thoughts together, and think through these problems. You need to ask yourself the question, why is this happening to me? How can I resolve this? And then you begin to discover ways by which you can resolve things, ways by which you can approach things and solve problems. In an economy like this; in a recession, it is people who think that would make a head way. The truth of the matter really in an economy like this is that the lazy people would fall behind and the people who think would get the bigger share of what they have always had. People who are stereotyped, who would always say, “This is the way we’ve been doing it from ages past, this is the way it will continue”, such people would run into difficulties and challenges at periods like this. But people who would always ask the question, “how can I do it better? How and why should I do it differently now to get a better result? They are the ones that would get it. Remember the saying that it is insanity to continue to do something the same way and expect a different result. So if the results you are getting now are not good enough, what you need to do is to change the way you do things. To change the way you do things I would encourage you to first review your processes, review your ways and ask yourself, within the limit of your thinking room, “how can I change these things? Put pen to paper, write your thoughts, express them; share them. Ask questions and research situations. Research difficulties and then you will be able to discover how you can solve some of these problems and make a head way.

I wish you the very best in 2010, I know that it would be challenging, but I commit you to the power of your thought because I know, therein, lies great solutions.

I would like to see you in the next edition and before I drop my pen, probably you are in real estate and you have difficulties in moving your business forward, one advice I have for you is that you should look seriously into attending our School of Estate. The Entrepreneurial Class(EC) lectures start 20^th of February 2010. The programme is designed to answer your most basic and important real estate questions. You still have a great opportunity to join the class that will be starting 20^th of February. It is most ideal for lawyers,  real estate investors, agents, enthusiast  or just a student of investment.  You want to improve on what you are getting, you want to know how to attract and seal the big deals, I would encourage you to look at the website: www.schoolofestate.com  download your form and join the class. It would be highly beneficial to you and I’m sure you would live to ever be grateful for the opportunity to hear about that program. In that school, we break real estate down for the entrepreneur. All you need to qualify is that you can read and write. Courses are taken on law, mediation, property management, property maintenance, project management, estate agency as a business, business of consulting, survey and construction and these are the vital things you need to take your real estate business to the next level. There are experts in the house; renowned lecturers like Mr. Akin Olawore who is the school’s Director of Studies. I am around to take some seminars and case study class(es) as well and there are other lecturers that are richly endowed and practicing with wealth of experience. How can you market in difficult times like this? All these things would be exposed to you and I encourage you to be a part of that session for February. If you cannot make it, maybe by way of distance, or time, pick up the home study pack instead. It is packaged just as if you are there. You would stand to lose nothing and there is a one day participatory certification exercise for those who would buy the home study packs. You can latch on to that opportunity; study it from the comfort of your home or office and benefit immensely doing that. I will see you on top.

To your success!

I would like to welcome the readers of this column to 2010 officially. I know that it is a little belated but then courtesy demands that I say happy, new, year in arrears. I want to believe that you have started to have a bite of the year already; seeing that the first month is virtually gone.

However, if I may ask; how has it been for you? I hope your hopes for 2010 are already materializing? I want to believe that we’ve all done our budgets; we’ve done our projections for the year and one would wish and hope that we are getting there or the figures are looking like we had thought they would look; otherwise, I would advise that you take the advice I want to give in this particular article to heart.

Before I go on to do that however, I would like to acknowledge the fact that the face of Prime Assets Plus has changed. It is now on-line. Suffice to say that we are no longer going to be having it in print as we used to and of course, in the world of business you know that change is the only thing that is constant. We reviewed our positions in the previous year and realized that we would be better of reaching our target market with somebody like you via this on-line approach and that is why we’ve simply taken this step. I court your feedback to know whether this is a better option as far as you are concerned or not. It is still going to be circulating free and so you don’t have any reason to worry about anything.

Once again I say, welcome to 2010 and welcome to the new face of Prime Assets Plus. Back to our topic; “Watch your cash flow in 2010” Why did I say so? If you really sit down to study the projections for 2010, most forecasters said that we shouldn’t expect anything significantly different from what we witnessed in 2009, especially within the first quarter or first half of the year. Some even said that instead of things to  improve, they may have to go the other way. If we are in, we want to protect ourselves and our investments and that is why I strongly believe that the position to take is that of watching your cash flow.

Now, how can  you watch your cash flow? You can watch your cash flow by;

First of all make sure that your budget is realistic. It should be something that is achievable. Of course, there must still be that element of risk there; that element of daring; that element of target; that element that would motivate you to achieve more otherwise, it may not be fun to run such a budget.

However, I would like to say that you must do everything humanly possible to make sure that your cash flow projections end up every month on the positive side of things because in an economy where cash crunch is expected to continue, illiquidity is expected to continue, the banks are expected not to just throw up their windows and start borrowing until probably the second quarter of the year. An economy where everybody is still going to be very cautious of what they spend and expend their resources on, you want to guard yours jealously. You want to be able to know that you are utilizing your resources the best way possible and you want to be putting your resources in things that would come back to you in good time – short time. Nobody wants to tie money down these days on long gestation period investments.

If you have shortfalls in your cash flow projection, fill it! Put a mechanism in place to address that, either by looking at the element of your budget, especially the outflow side that you can cut down so that the net position can be positive or you look for how to probably put an OD(overdraft)  line with your banker if you can. You don’t want to be in the middle of the sea to realize that you need a life boat that you forgot at the shore. So I would advise you that while you are starting to sail now, ensure that your life boat is in your ship so that in case, you need to call for it, you won’t have to fret over anything. So that is to say; court your bankers, get the OD in place. If you are not the type that can get an OD or anything, just make sure that the type of investments that you are putting your money in are the types that as you projected in your cash flow and keep to terms as much as possible. The cycle of your transactions matter now, the shorter the cycles the better. Quick turnover transactions would be the delight of entrepreneurs at times like this.

That is why I expect that a lot of real estate transactions will be happening at the bottom of the pyramid this year because that is where money changes hands quickly and faster. Though they are little sums the aggregate of it all becomes very significant. Remember, the cash in your business is the blood of your business. If cash leaves your business, life, in a way, would have left your business, no matter how profitable it is, it may be on it way to the grave. No matter how healthy somebody looks, if he continues to lose blood, he would soon die. So he needs to stop the bleeding, if he is losing blood before he begins to even think of any other thing to do. So, it is as simple as that. If somebody is in an emergency and he is bleeding, the first thing the medical team would have to look at is how to stop the bleeding because if they continue to carry out any form of treatment without stopping the bleeding, whatever they are doing would amount to nothing.

So you need to look at those little, little areas in your business where there are holes through which your money leaks.

You need to look at your cost profile; you need to review your businesses and ask yourself this question again; “Do I need to spend this much to get what I’m getting or can I spend less to get the same thing I’m getting or  even get more? How can you optimize your cash? That is the question here. Optimization will be your watch word in 2010. You need to device ways by which you can optimize your cash.

I hope that I’ve been able to point to you the direction that would significantly impact on your business in 2010. I look forward to a very great year as far as I am concerned and I hope that we would all be there together. Now, Prime Asset Plus on-line would be coming out once every month. We are coming out late in January but the precise time we would be coming out is the first work day of the month so you expect another edition on the first work day of February. It would be up-loaded. I want to encourage you to tell your friends, to send it as an e-mail to them, to encourage them to log on to this project because I believe that it would be a source of inspiration, a source of business ideas, a source of encouragement, learning and sharing for all of us. See you at the top. That’s where you belong.

To your success.