Real estate boasts some of the most impressive returns on investment in Nigeria. So it’s not surprising that Nigerians with means are willing to stake a lot of money on properties.
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In recent times, the barrier to entry in this space appears to have been lowered, thanks, in part, to the mainstreaming of crowdfunded real estate. Once the preserve of a few cooperatives, this investment model has now become popular with a much larger audience.
The main drivers of this change are crowdfunding companies, which leverage digital technology to get numerous people onboard their real estate schemes. Nigerians are enlisting on these platforms by the tens of thousands, hoping to reap handsome returns on their investment.
But are these platforms legitimate?
Do people who register with them earn what they are promised, or is there a risk that they’ll lose it all in the end?
Nigerian Crowd Funded Real Estate: The Major Players
There aren’t many institutions offering this service. The players fall into two categories:
- Companies that present crowdfunded real estate alone, e.g. Coreum RE and ABiT Crowd.
- Companies that provide real estate investment opportunities, along with other investments, e.g. Rise and Wealth.ng.
Let’s take a quick look at the names mentioned here.
Coreum RE is a Lagos-based digital crowdfunding platform that offers Nigerians the chance to earn from real estate investments. According to their website, they enable their users to find attractive real estate assets, track them, and invest in units or virtual slots for profit. Returns could touch 15% per annum.
ABiT Crowd belongs to a much broader ‘ecosystem’ of companies, the ABiT Network. According to them, users of their app can buy a small share of real estate (which they can pay for by fiat or Tatcoin, a crypto token). Their stake earns them ROI for as long as they hold it. They may also sell the stake back to ABiT at the end of an investment period.
The key difference between Rise and Wealth.ng is that the former’s real estate investments are dollar-denominated, and involve property located in the United States; the latter’s assets are domiciled in Nigeria. Rise allows Nigerians to invest in their properties for as low as $10. Both platforms promise up to 15% return on investment.
Attempting A Deep Dive
It’s important to learn what we can about these companies before deciding whether they’re worth investing in. So here’s an examination of two of the platforms we’ve mentioned.
Rise vest has gotten a bit of traction lately. Its founder, Eke Urum, also cofounded BuyCoins, a Nigerian crypto trading startup. He has a degree in Accounting and Business Management from South Carolina State University in the United States, and experience working with audit, financial analysis, and real estate investment.
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Rise is backed by Future Africa, a venture capital firm founded by serial entrepreneur Iyinoluwa Aboyeji, and also by ARM Trustees Limited (a subsidiary of ARM) which provides it with trustee services. It has also gone through the Techstars and Western Union accelerator.
As of the time of writing this, the Rise app has been downloaded more than 100,000 times on Google Play Store, where it has a 4.2-star rating and 779 reviews.
The Crunchbase entry on Coreum RE lists the company as a ‘tech-driven real estate’ investment firm and informs us that it was founded in 2019 (the same year as Rise). The founders are Funsho Babatola Awoniyi, who holds an M.Sc in Economics, and Adeyinka Olubunmi, who serves as Coreum’s Operation Director.
LinkedIn turned up the fact that Funsho Awoniyi (named Funsho Babatola here) is also working on another project, Mueroc Capital. The website for this project (which hasn’t been launched yet) says it’s being built to drive private sector participation in improving healthcare infrastructure in Africa.
According to an Angel List entry, Coreum RE receives trustee services from FBN Quest Trustees, a subsidiary of FBN Quest, which (crucially) is regulated by the Securities and Exchange Commission (SEC).
However, Coreum RE doesn’t seem to have an app; a search on the Google Play Store did not turn up any relevant results. Engagement with the company may take place primarily through its website.
What Investors Think
A couple of people who had invested in crowdfunded real estate shared their experience with the platforms they had used.
One, named Uche, said he had invested in a real estate project for six months and received his principal with a 14% ROI, as promised. However, he still had misgivings about the way the system worked.
“They just say it’s for real estate ad they show you pictures of a few blocks of flats,” he said. “There’s almost no way to verify.”
“As an investor, you basically just put your money in for a length of time and then get paid after it. I have no idea if they built the house or bought the properties.”
Another investor, who says he’s just begun with another platform, sounded more upbeat.
“I began in May, and I’ve already been paid interest for that month,” he said. “I think it’s going well.”
Final Words: Do Your Due Diligence
If you’re intending to invest in any crowdfunded real estate opportunity, be sure to do your due diligence. Find out as much about the company as you can. There should be no vital questions left unanswered. And if you choose to go with anyone, you may start by committing smaller amounts of money, just to test the waters. Hopefully, you find one that works just fine for you.
Featured Image Source: Mercy Homes
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