The known traditional way for acquiring real estate land in Nigeria is to either buy directly from the owner who is willing to sell or from an agent who is selling on the behalf of the owner. This landed property is usually valued and put up for sale at market value.
However, there are strategies which have helped a number of investors acquire vast landed properties in a short time and also made them great wealth from the sales and development of these landed properties. This strategy is called LAND SPONSORSHIP!
What is Land Sponsorship?
A simple scenario to explain it is that a family owns vast landed property i.e 1000 acres (6000 plots); which has no documentation on it, therefore they cannot sell these lands. The reason why they cannot sell these lands is because the buyers would not want to invest in lands without title or the appropriate documentation. The cost of perfecting the land title (i.e. Excision, C of O, Governor’s consent) can be very expensive; they therefore welcome a form of partnership, where an investor takes financial responsibility to perfect the land document, in exchange for landed properties, which would usually be higher than the cost of perfecting the land document.
The Family could agree to give the investor 1 plot per acre as compensation for an excision documentation or 2 plots per acre for C of O or Governor’s consent documentation. So, if the investor spends, for example N100m to perfect the land document and is compensated with land, you could see how quickly he can go from zero plots of land to owning 1000 plots of land and amazing wealth in the process when some of these lands are sold. When the investor sells some of the landed properties, they recover their investment capital, plus make more money in the sale, whilst retaining a portion of these lands for future sale or development.
It is also vital to understand that there are payments to be made to the family, called Premium; this payment is required before they permit access to the land to commence land title perfection.
Land Sponsorship extends to Land clearance, road construction and Land Reclamation. When the land title is perfected, the family may still require the bush cleared and access road constructed, so that buyers can access the land for inspection. They can get this done themselves if they have the funds, if not, they will put it out to investors to finance and compensate with land i.e half plot per acre of land cleared and road constructed. The same applies to land reclamation; in some parts of Lagos, the lands are very swamp, therefore not attractive to buyers. Investors are invited to sandfill to reclaim the land; some would buy trucks of sand to carry out the work, whilst others would dredge from the grounds to sandfill and reclaim the land. Whichever method is utlised, the investor is compensated with land for the work done.
Further, due to how lucrative these sponsorship deals can be, particularly in Lagos State, it has paved the way for fraudulent activities, whereby families intentionally collect money from multiple investors and then leave them to fight over lands or other losing their money in the process. It is therefore vital to carry out due diligence before investing in land sponsorship deals; as these will eliminate the danger of losing your hard earned money. This is where we can help, as Zichiteff have successfully carried out multiple sponsorship deals, so can support you through the journey.