NOI and Comps: The Real Estate Metrics That Make Money

Today on the podcast, we're going to be looking at how you can tell a good business opportunity. Again today on the podcast, we're going to be looking at how you can decide is this a good opportunity to invest time and money in? Is this also the kind of opportunity that you can take to potential investors and they will also want to drop BA. That is what we're going to be looking at today. Now I'm making today's recording, of course, in the parking lot and you can hear some noise in the background because I am actually at my kids school.

The house is full as in very full because my in laws have been around. My father-in-law just turned 70. So plenty of J plenty of shopping, you know, stuff like that. And for those of us who are self-employed and who work from home, you know, sometimes in laws or family members who understand that, you know, I got to make these calls or else no money coming in. So I find it easier at times like this to, you know, like I

just dropped off the kids and I said, you know what, let me just bang out some calls before I go back home because when you go home, you got to socialize. You know, you can't be antisocial when you're in laws around. So that's the reason why I'm outside my kids school. And that's why there's all that noise in the background. Now, this podcast is not about my family situation. Oh, by the way, please pray for my father-in-law who just turned 70, and also by extension, other people in our families who are also turning 70.

Let's keep praying for long life. Let's keep praying for good health and also for those of our family members who are getting older to realize that they still have value and this will have worth and they still have contributions to make to society. Now, the reason why I'm saying that is because last week when I was on the radio show, old Man called in, you know, she prayed for me. She said that my show is great and everything as I was talking about how she's in retirement and, you know, she no longer has any vitality left in her.

You know, so hard to tell her that Mama is not like that. You know, yes, you're old or older, but it just means you can't do jump. You can't jump up and do push up, you know, like we young people, but that's still still there's youth. You know, there's not youth, but there's, there's still worth that you have, even though you are old, you know, there's wisdom that you can pass along. There are businesses that you can still start.

There are charitable endeavours that you can still do. So please let us remember to pray for members of our families who are turning, you know, 707580. You know, some of them feel like they're old and they're washed out. So that's not my father-in-law. But I'm just saying, let's pray for my elders. They need our prayers and they also need our our love because I'm sure it's not easy getting old or older in age, you know,

and then you know, your classmates are dying and things like that and you know, must be a very lonely experience. So this podcast is not about old age and old people. But what I do here is I solve business problems, especially taking the best of sales and marketing advice and trying to apply them to the Nigerian experience. That's what I do over here. So if these are the sorts of things that you are concerned about, then welcome to the podcast.

I'm your host. My name is Tavishima Aede and for years this is all I have been doing. Practical, realistic, relevant insights so that we can get results in the Nigerian market. So if you're ready to start growing your business the Nigerian way, then stay locked in. Stay tuned into this podcast. Subscribe on Spotify, YouTube, Apple or any player of your choice. And if you'd love to connect, you can call or send me a text message or a WhatsApp message on 08064662140.

Now today on the podcast, like I said, we're going to be looking at how can you tell a good business opportunity? How can you tell if this deal is worth spending time, worth spending money on? And if you're shopping for investors, how do you know that this is the kind of deal that when you show your investor, their mouth begin to water, they'll begin to salivate. They'll begin to say, how can I get in on this deal? Take my money, take my money,

take my money. That's what we're trying to figure out now. How can we do that? Now this is the context and this is the reason why the support guys listener, his name is Emeka Ugochuku Anthony. Well, actually he wrote Emekam, you know, with an M and I'm wondering is that a typo? I'll be you know, Emeka is there and then Emekam also, you know that one also there. So anyhow, I don't know those of you who are able speakers, let me know.

So Emeka Ugochuku Anthony, he runs a business GNR Real Estate, Green Nest Realty, you can find him on LinkedIn. Of course, he followed me on LinkedIn. Eventually he started chatting with me on WhatsApp. And this is just a series of conversations that have gone on, a series of chats rather that have gone on between me and Mr. Emekam Ugochuku Anthony. Oh, by the way, Emekam, thank you very much for listening to the podcast and please share the podcast with other people who are going to get value from the show as well.

But before I continue, one thing that I've been saying on the podcast, and let me repeat again in case there are some people that have not heard it before, with the advent of Truecaller, I repeat Truecaller, TRU. E. With the advent of Truecaller, people having it on their phones and you know, social media, Google, things like that, potential customers are researching us all the time. They're researching us all the time.

The reason why I'm pointing this out is because when America hit me up, of course he hit me up under his company name. But of course, for everybody, I always run you through Truecaller. Truecaller is installed on my phone because I want to get a sense of who it is that I'm talking to because I don't want to talk to scammers. I also want to make sure that I'm talking to people who are worth spending time with. So if I run you through Truecaller, but you know, you package your WhatsApp as, you know, the greatest, the greatest hotshot investor in in what now?

What are they investing in these days in Web 3 and crypto and this disease is that that. But then I run you through Truecaller and then I see your Troy identity and I see that, look, you're a kid who is still in secondary school and you're just trying this, trying this, trying that. You know, last month you are doing Forex, now you're doing crypto. You know, that's just how basically let us source people out. So basically our customers are doing the same thing.

Maybe not all of them, but people are running us through Truecaller. They're running us through social media. So it's important. Now, the reason why I bring this up is because for Emeka Uchuku, if you run him through Truecaller, the name that came up actually was Tony Cruz, which is not a bad name. Things sounds real nice, nice, you know, sounds real cool. But the problem is this. Excuse me for sorry. Oh, you know, apart from podcast recording and consulting calls,

there's also plenty of J over the weekend. So I've lost my voice a bit. So what was I? Now, those of us who are in business, those of us who are using our phone numbers for business, we do not have the same latitude. We do not have the same freeway that that other people have. So now my wife, for instance, if she decides to put her name on WhatsApp, on Truecaller or whatever, as Tony Cruz, you know, that's our own problem.

You know, she's not doing a business. Nobody can judge her. But I can't put my own name on any of these things as Tony Cruz because you don't make me look somehow. You might make me look on serious, it might make me look unprofessional. It might make me look as a scanner. Scanner. I say scanner. So when you're going to go and register your name at Glow office, MTN office, Airtel office, if you are a business person, please put your full government name.

When somebody runs you through social media, it is more impressive that they see a Mecca Mugochuku Anthony than they see Tony Cruz. Especially since you know, you're in the business of doing real estate. We don't want to do, we don't want to use any monikers or nicknames that make us look unprofessional. Excuse me, you know, especially since in the real estate space, people are afraid of scammers, especially in Abuja where people, they run real estate scam anyhow.

So basically, you know, when it comes to our public profiles like appear legit. So for those of you who haven't heard this bit of advice before, I'm giving the advice again, please. Real names, strictly real names, no nicknames. I repeat, no monikers, no nicknames, either real name or business name. There is no halfway point, either real name or business name. So next time you're in law office and they say register Yasim, use either your full real name or use full business name.

No slash. Nothing cool, nothing cute, nothing whatever. And this is for those of us who are in the business. So you're listening to this podcast. You don't care about starting a business? No problem if you call yourself Buttercup Hot Chick 69, that's not a problem. By the way, that was what my sister-in-law was using. Buttercup Hot Chick 69. I have to tell her, look, your young lady, you want people to take you seriously as a business woman.

You're going around and when somebody research you, what they're saying is Buttercup Hot Chick 69 really My friend changed that thing. Of course, she argued, but now that she don't do for, you know, in business for like, like 6 years now, she has seen the light. Everything is now becoming much more professional. So this thing applies to both young men and two women. You can't be running around as Tony Cruz and you can't be running around as Buttercup.

Hot Chick 69. Real name, your full government name or business name? Full business name. There's no, no half, no half measure. All right, then let's see. What else? OK. Yeah. So thank you very much for Mecca Mojuku Anthony, remember again, GNR Real Estate, you can check him out on LinkedIn. At least I know he has a profile on LinkedIn. Then thank you very much for all the kind words because he said my podcast is great.

He said it's interesting. He said it's knowledgeable and that I talk about things that apply to other aspects of life. So thank you very much, Mr. Emeka. That is really, really high praise. And yes, that's the goal of the podcast. So I'm glad to see that it's achieving the intended effect. So please, Emma, come, please share the podcast with other people as well who might find some great interesting or knowledgeable things over here on the show.

Now to the meat of the question, How can you tell if this is a good business opportunity? I want to get investors. How can I present it in such a way that when they see it, they will just be throwing dollars at me will just be throwing dollar, dollar, dollar. I'll just open my bag to catch the money, but then dollar will hit me on the head. Dollar will hit me on the chest being dollar will hit me on the back. That's the goal.

People just throwing money at us. So general real estate American, the guy says he's a real estate investor and that his goal is to acquire properties that cash flow. Now this is a very good idea, very, very good idea. But The thing is it's an old it's a very old idea, but it's a good idea. Now this is what cash flow means. Cash will just means you're running your business and then cash is flowing in and cash is flowing out.

We just want to make sure that the one that is flowing in is big. The one that is flowing out is small. The surplus on top that is the one that we can reinvest in the business and that is the one that we can use to flex and want each hour. I repeat, cash flow just means that money is always flowing in to a business. Our money is always flowing out of a business. We just want to make sure that the one that is flowing in is big, is full, is buckle, is plenty.

The one that is flowing out, we want to make sure that it is small or smaller so that the surplus that is on top will reverse back into the business. Who used to pay school fees We used to buy shawarma and they were also used to do you know, vacay in December, you know, travel abroad and go somewhere nice. Also buy wifey something nice or buy girl girlfriend something nice. For those of you who are women listening to this podcast, you know it's also the same buy a husband something nice.

You know, we need love to buy your boyfriend something nice. We need love to stop buying singlet and boxer. Nothing is, you know, we're now in the 20th century. I'll be 21st century. No, no, to shut unboxer. Buy us something nice too. We need love. Where was I? So that's the idea behind cash flow. Now, like I said, cash flow in real estate is a good idea. I first came knew about it by Robert Kiyosaki and his book Rich Dad.

Poor dad. But this is old. That book is like 30-40 years old. And then also in Lagos, my last landlord, Mr. Bello, God rest his soul, he's no longer with us anymore. That is also how he built a huge measure of his wealth. So I think he was a professional engineer somewhere and he got some money. And so he started buying properties in Ibadan, where he's from, and buying properties in Lagos. And that was the guy's strategy basically he was buying things like cash flow.

So you buy a property for XYZ amount, but The thing is cash flowing, the cash flow might not be big. So see, it's like this. Some people say, why would I bother with real estate? You know, I buy this house at X million, I rent it out at Y million. The money that is coming in every year, if you look at it is not much. It's only like 1 million or 1.5. Why would I go through all this stress just for 1.5 M? Yes, in a way you're correct.

But The thing is, people like Mr. Bello now who are owning dozens of property in a banner and dozens of property in Lagos, what they're doing is they're getting 1.5 annually on one property, but they own like 50 or 60 properties. So you see how that game works? You know, some of you are thinking too small. Yes, you're only making 1.5 MA year on one property. You know if you leave it down only one property then you're wasting your time because I

would like go through all the stress for only 1.5 S. The goal for this cash flow thing has always been scale and that's why in my car would you go after they reached out to me. Because the small small couple you collect on one house is not enough. Where you own a pool of houses, a pool of developments, a pool of, you know, buildings, then the thing starts to make sense. So this is a good idea, but it's an old idea. In fact, there are some people who are in the real estate space who say that this strategy is no longer doable.

See, The thing is, I'm not in real estate, so I don't know. But I know that, you know, boys don't begin to shout that this whole cash flow thing doesn't work because of interest rates and money markets. That interest rates are high, the cost of money is high. And so because of this, you can't get any appreciable cash flow on properties anymore. But like I said, I am not a real estate professional. Let me say it again, I am not a real estate professional.

In case you didn't hear me, I am not a real estate professional. This is just gist that I am hearing. But this whole idea, investing in casual properties is a good idea if you can make it work. Whether that strategy no longer applies today and was only a strategy that worked 40 years ago, I have no idea. Talk to more educated and established real estate professionals. So the opportunity now that has fallen into a maker's lap that he wants to know if this is a good investment opportunity.

Excuse me, He has found a house. The title is C of O. That means certificate of occupancy. That is the highest title that you can get in Nigeria. When you get it, it means that this house is your own. So if you want to come and buy a house from me and I show you C of O with my name on it, then it means excuse me that I have complied with every single thing and the Nigerian government is satisfied and I willing to stamp and to show that me I'm the owner of this property so he can buy the property from me in full confidence.

Sorry about that. Where was I? Yeah. So the title on the on the House now is COO. So that was good title, Good title. But of course, if you have to deal with America, go and check it first. You know, I asked to see the COO one sided first. Then where else? OK, so the property, he says is in a good location. He says it's in New London in Lagos State. And by the way, I want to say something. I've noticed that there are all these places cropping up in Lagos.

I've had like New London now and I want to say something as a team man from Benwick State. There are only two Londons in the world, right? There are only two Londons in the world. The first London is of course London in the UK. That's the original London. The second London is in a town in Adipo in Benway State and people call it Adipo London. I repeat, people call it Adipo London. So one moment, let me just wind up OK, Sorry.

About that, I was becoming really conscious about the noise. I said let me wind up, you know, let me do, let me be professional. Not every time. Noise, noise, noise. OK, what was I? So I was saying, he said this place is in New London in Lagos State. And I was telling people that look, there are only two Londons, There is London in the United Kingdom, in Britain. Then if you go to Benway State and ask for Adipo London, they will take you to a little town.

So as me, they'll take you to a little town in Benway State called Adipo and the nickname for Adipo is Adipo London. So those of you in other parts of Nigeria, stop naming your places New London because there is already a London in Nigeria and that is Adipo, London. If you're not from Benway State, you're not from Adipo. Stop calling your place London. It is not London. There are only two Londons, London, UK and then Adipo,

London in Nigeria. Any other London in Nigeria is a counterfeit. You can call yourself New Dubai. Like I hear that, what's it called? Eco Atlantic. They say Eco Atlantic is the new Dubai. You can call it new Dubai, you can call it new America, but please no more new Londons. There is only addictable London in Nigeria. So that's my rent. Then the asking price for this piece of property is 200 M and the mechanical trying to look for financing, but everybody's asking him to drop 20 or 30% of the value of the property.

And when I was talking about raising money, raising finance from banks, you know, this is something that I told you guys. Now, if it is for land and property, nobody will just give you money free like that. They'll ask you to drop something. And he said some people say 20%, some people say 30%. And yeah, it's like that. That's what I said on the podcast. People will ask you for 20 or 30%. So if the property is worth 1

billion, they want you to have some skin in the game. They want you to drop 20% or 1 billion or 30% of 1 billion. Now here there is some places they will even ask you for 40%, but the bank is not going to give you money without you dropping something. So another option now that he's looking at is how he can raise money from investors by promising them 5% return on their capital. And so his question to me was, is this a good deal or not?

And then how to find investors? So this is the detail of the conversations that followed between me and him. So the first thing that I pointed out to him, because if you notice the property is here is 200 M, but he's looking as if tenants no D for the property yet because he was asking me what should I do with the property, You know, should he rent it out? Should he do short letting or things like that? So it looks as if there's no property, there's no tenant in the property.

Yet. Oh, sorry about that. All the noise, you know, I'm in the car now, so things are just anyway, what was I? So no investment, no tenant in the property yet. So I had to tell him that first of all, your intentions are good, but you are not yet a cash flow investor. So sorry if I'm using strong language, my brother Emeka, but you know, real estate people reach out to me. There's even one last week, sorry, two weeks ago that we were supposed to do some consulting together, but it didn't quite work out.

Guy was not able to raise the raise the pay for my fee. But just like how I'm giving you value, I still gave him value. There's nobody that crumbs across my table that goes away empty handed. I will answer one or two questions, but by the time handshake is entering elbow, I will say, look, you know what? Cough up some money. You've been listening to free podcast episodes. I've already given you some value free of charge.

So the way this thing is going now, you guys drop something. Let's make this thing official. You know, don't be like boys in a dating relationship. You know, you want to be enjoying the fruit, but you don't want to buy a ring, you know, so commit. So anyway, what was I? So bottom line is, America, I'm sorry if I'm using very, very strong language, but I'm just trying to be blunt with most of you who are coming across my table for someone in this situation.

You are not yet a cash flow invent investor because your property has no net operating income. Let me repeat, you're not a cash flow investor yet because your property has no net operating income or NOI as you will in the field like to call it. Now, this is also another very old idea that I've heard from Grant Cardone and I've heard from Robert Kiyosaki. You know, Rich Dad bought that series. And also I've heard about it from my wife.

That's because my wife is a CFA. Well, she's not a CFA yet. She has finished Level 1 and level 2. So I let me take off my glasses. Sorry about that. Yeah, I use glasses for work. But, you know, I started the podcast and I forgot and it was just awkward. You know, I use my glasses for work. I don't use them for podcasting and where was I? So I heard a bad from my wife. So my wife is she's not yet the CFA. She has finished level 1.

She has finished level 2. Each time she passed one hand smooth, very smooth over, you know, top like 1020 percentile. So I know that Level 3 she will smash it and you know, she'll be fine. So these are where I heard about these sorts of things. See, this is the reason why you should be paying attention. Open your ears wide, you're interacting with people, open your ears, you're seeing books, open your eyes. You know, because you never know when any kind of information might come in handy.

And this simple thing, now that I've heard from Gran Kardon, Robert Kiyosaki and discuss with my wife, The thing is becoming important on the Party Has episode today because I'm trying to answer somebody else's question. Even though this is not my field. I repeat, I am not a real estate professional. I will say it again, I am not a real estate professional. One more time, I am not a real estate professional. So please do not act on my advice without confirming from someone who is a real estate professional.

So, if your property does not have net operating income, you are not yet a cash flow investor. Before I continue, for those of us who are bad at mathematics and bad in finance, you see the reason why it is good to marry a woman who knows all these things. He will help you out. So it's not just fine face and fine figure. Does she know mathematics? Does she know one or two things about math above finance? You know, these are the things that we we look for as well.

In fact, if you've watched this film by a, what's her name? Omani, Omani bully. What's it called? Love, Love and something. What is it? Love in something something the one that about Odogo Odogo para, although good that he saw this girl in the village and you know he fell in love with her started chasing her up and down. So you know it's the same thing now that girl trauma. If you watch this film, you know trauma is a beauty to behold.

If you see our face fine babe. The guy calls a child logo Abby a child logo or something like that. I'm not able please so evil speakers forgive me. So Chuma now fine face, frank figure, everything, but then Chuma also has a business someone is involved in selling perfumes and she's selling the perfumes profitably even though she's trying to run a career. So young man is the total package is not just face plus figure is face plus figure plus finance, right.

You know we're looking for a help meet as we do Hosu somebody that will be helping us, somebody that will compliment us, you know any limit what was I so net operating income now. Now the idea behind net operating income or NOI, is this the NOI or the net operating income is just a number that is trying to tell you how profitable is this real estate. I repeat the NOI have the net operating income just tries to answer the question how profitable is your real estate?

I'm sure you guys picked up on something. How profitable? Profitable. Therefore we're even going to consider the question, is your real estate even generating property? I say a property. Is your real estate even generating profit? If we have not even started generating profit really you can't say you are a cash flow investor. You could be a, what are they called now? People who fix and flip, people who buy low and sell high, What are they called now?

You can be engaged in arbitrage. That is, you buy a piece of land for 100 M, you do small development, and then you sell it for 900 M. Maybe the development that you did on it was 100 M, You sold it for 900, so you now pocket 700 M. That is not cash flow investing. It's a different business model. So what you're doing is you're looking for arbitrage opportunities, which is not bad, but I'm just saying know the game that you're playing first.

If you're looking for real estate arbitrage opportunities, know that that is what you're doing so that you can search Google search ChatGPT or talk to your other industry professionals and they will advise you on the best way to look for arbitrage opportunities. But then if you're investing for cash flow, know that that is the game you're playing. So you can search Google, you can search at GPT, and you can go and talk to your senior colleagues so that they will advise you on how to play the cash flow game.

So we need to know the game that we're playing. So the way that we determine net operating income is we look at all the revenue, all the money that the business is bringing in. You will now remove all the necessary expenses, OK. So you start first with how much money is coming into this property. Then you now look at how much money do we use to maintain this property, to run this property and that will now give you your NOI.

So some of the things that we're looking for first of all is we're looking for gross operating income. Gross just means total. It means every, every, it means share, put it anything that the money is generating, that the property is generating, just put it gross operating income. So in this case, gross operating income because we're in Nigeria now, gross operating income will be rental income. How much are you charging as rent or if you're using it for short stay or short time, how much are the staying people or how much are the short time people, how much are they paying?

Put that income there then other income excuse me, like vending machines, you know, because those one time one of my cousins came, she had a place to stay. My house was full. I told her look sis I beg you know no vex ah and she really vexed. She was really really annoyed. If I till today she has not forgiven me and she came to town, I should go stay in her brother's house. But I told her look sis I beg this house is full.

No man cause problem for me and my wife. You, you understand like if you stay here as in like me and wife, you quarrel and we even finish one big world two weeks ago. I beg, I'm not ready for another quarrel. But my sister begs, she begs seriously. So we have to look for a place for her to stay. And she said somebody told this one hotel here, we went to that place and or more that place was short time, short time joint.

In fact, when we entered inside, the person asked us how many hours. I said how many hour How this is my sister Abuja people self no customer service. You didn't even greet us like oh, good morning, blah, blah blah. Welcome to so so so how can I help you today? We just enter inside and now ask us how many hour? So yeah, wow. Anyway, so in our place now they had vending machines at the bottom, this place that has a coke and this in the house Coke and Fanta inside.

And then you know, you put your money inside and then you get your Coke and Fanta. So even though the place was a short time place, at least they made it look, you know, fancy as well. I like Abuja people and Lagos people, we know how to package short time, but still you have vending machine there. So the money that is coming in from vending machine, the reason why I just gave the example is I don't want you to know that some of these ideas, it's not just theory, theory like it's practical, it's happening, it is happening.

There are these kinds of establishments and they're putting vending machines there. So the money from vending machines then some people also use their property for, you know, storage. Sometimes it's a business and sometimes it's how for do like this guy was supposed to leave your house. He claims he has left bought TV and fridge and this and this and that is that is there. And you tell him that look, oh boy, because these things are there.

I'm still going to be charging you X amount monthly. You know something. So any which way shall sometimes storage. So excuse me. So that is the gross operating income. How much money is this property bringing? Anything that is bringing just put it there. So rent, put it there, short time put it there, short stay put it there. Vending machine, put it there. Storage, put it there. Let's say boys come to your place to come and watch a football in the evening.

Everybody that comes to charge them hundred 100 naira to watch AU how much? Put it there. Or that is why they say gross, gross operating income, every, every as everything, put it on paper. Then operating expenses, because houses cost money. Unfortunately, property tax, you pay money. In fact, Abuja Municipal Council, they've been going everywhere, threatening all of us. Come and pay this tax, come and pay that task or else we'll take you to court.

Tenement rate, You know, this, this, this the same sort of rubbish that we used to meet when we're in, when we're in Lagos, Look at councils, you know, everybody's looking for money nowadays. So property tax, write it down. How much for insurance, put it there. Utility, Nepal bill, water bill, this bill that bill, put it there. Repairs and maintenance, 50 toilets got broken in the building, The tenants refused to replace it.

You as property manager, you replaced it, put it there. Property management fees, how much are you paying your property management SHA? Everything you are spending on that property, put it down. So that's the first exercise you take. Gross operating income, how much is this building generating? Then operating expenses, how much money are we using to maintain this property? When you gather it, now you just do simple mathematics, you know,

you just do plus and minus this, plus this, plus this plus this, minus all of this. By the time you are finished, if you see something in black, that means if you see that something is on top good, you have net operating income. The extent of the weather is good or bad would depend on the extent of the NOI. So the NOI is small then is not good, the NOI is big then OK, that sounds good. Now there are some of you who do this mathematics, you will try to figure out how much is this business, this house bringing and how much are we using to run this thing.

Unfortunately, some of you that you do this thing, what you see is minus something. That means you do not have net operating income or you have negative net operating income. That means you're you're, you're in trouble. It means you bought the house for one million. No, it means the house is bringing in 1,000,000 every month, but then you're spending 1.5 million to maintain the house. Sorry, he's bringing in 1,000,000 every year, but you're spending 1.5 million every year to maintain it.

So essentially what it means is you're losing 500 K every single year. So what you now need to do is you need to look for ways to start making more money to improve your NOI. So some people do that by increasing rent. So that's the reason why landlords in Lagos, you know, any small thing, increase rent, increase and increase rent. So increase rent, when you increase rent, you excuse me, when you increase rent, you increase your revenues.

Then you can also charge amenity fees like parking for instance. And one people that have done nothing well is Abuja Investments Company over here in Abuja, I can't remember, it's Abuja Investments Company or Abuja Market Manager. Something, something, something, they are the ones that manage all the parks, all the markets that we have here. So we say market, they manage it, we tackle market, they manage it. Which other market share, All these markets that we have all over Abuja, they're the ones that are mark managing it.

Now in the beginning, back when I was a small boy in the 80s, if I was going to market with my auntie, for instance, and our man could stress my life because she was not a straightforward person. She won't go to one shop and then buy. She'll go to the first shop and then price for like 10 minutes. Then she won't buy and move to the next shop and then price and won't buy, then move to the next shop and then price and won't buy.

Then she'll now go back to the first person. I say the person in shop 3 offered me, you know, 59 less or whatever, you know, match that price for me. Then she now buy from shop A. Nothing used to vex me as a child because me, I'm the one, I was the one, I was carrying the load. I'm like Auntie can you just walk into one shop and buy and let us leave. This market is dirty, it is muddy, it is smelly, there are flies all over.

I'm walking in blood and dead vegetables and stuff like that. Auntie please just buy it and let us go. That makes you stress my life. You go to market and spend 3 hours dirty, sweaty, smelly market. Anyway, so back in those days, now Abuja Investments Company or Abuja Property Management Company or whatever car park was free, you come in, you drive your car, you park, you go and buy something, you leave. So maybe they used to make money from the people that own the shops.

But then one day, the market managers, they became wise. Maybe people from Lagos came to come and teach them and they realized that they were losing money. They now started charging us to park inside those places. You know, money was not much, you know, 559-1010, you know, that was that was back then. But now the money has gone up like, you know, 3300 naira per car. You know, some of you think there's only 300 naira. But listen, this is how people increase their net operating income.

Remember net operating income, how profitable is this piece of land, how much money is coming in, how much money is going out? What is the difference, The difference there, that is our net operating income. And you will hear live how Abuja investments, are they making plenty of money or other Abuja investments management company or Abuja Investment market company or something like that. The next time I go to market, I'll check, excuse me, I'll check the receipts and then come back on the podcast and let you guys know.

So they're now just 100 now per car. You say 300 now, what is 300 now? But just we just listen. Let us assume that only 100 cars. Will. Pass the market today and by the way, now 100 cars that is small. I don't think there's any market in Abuja that only 100 cars will drive through and in Lagos, I do not think there's any market that only 100 cars will drive through. So let's say 100 cars coming, if you're charging them 300 naira,

that is 30 K day. Now Abuja investments management company or marketing company or whatever, they are already collecting money for rent, money for stores and money for all kinds of things from the people that are inside. But then they also collecting 3300 naira from all of us who driving. So let's say that they're taking 30,000 naira daily. So you say 30,000 naira per day. That's not much. I'm coming. What that equals to is 600,000

naira monthly, assuming that it is a market that only operates from Monday to Friday. It doesn't open Saturday and Sunday and that is not the case. But I'm just trying to show you guys something. So on on top charging people 300 naira, you're now ending 600K monthly. But that 600K monthly is just for one location. And Abuja is a big ass place. I don't know how many markets there, but let's just guess that we have 100 of these markets in Abuja.

Let me just guess, this is me guess. You know, please, I'm not saying that there are 100 locations, but I'm just trying to show you how these things scale, that if you can get 600 naira monthly from one location, right? You manage markets, you own markets and then you have 100 locations, that is now 60 million naira monthly that you get from just charging people 300 naira per entrance. So those of you who are on that place, there's this place on Lagos Island, it's next to this like Uba building is close to like where the water is and.

Is only cars that park there right now back when I was in secondary school the last time that I went there, I think they're already charging A-100 naira per car. I look at all those cars, you can now see how with that job, if you're able to do this sort of thing in Carmo market in Abuja now just a local market. So it's. Free for all. So there's no parking space. There's somebody there that owns a piece of land. The person is something brilliant, they cut down all the grass, they arranged everything and they leave the place open.

And what they do is you want to park your car here, you pay that guy 100 naira. So those of you who have property lying around, you can see how charging amenity fees can be gaining you something and can be increasing your net operating income. So that's the way if your NOY is negative, those are some of the things you can do, increase your rents. Start charging. What are they called against of? I just said the word that I

forgot. Start charging how many fees ahead like parking or whatever. You can see that you can lead to good money. And this is the reason why I tell my wife that the only people that I enjoy in Abuja are the people, the shareholders of this Abuja investments management company. They're the only ones that are enjoying because I look at all those markets and I see the three 300 and they're collecting from us every single day.

And I know that these are the only people that are balling in Abuja. So summary, how do you know if you have a good deal on your hands and you're in the real estate space and you're looking at investing for cash flow? The answer is very simple. Do you have net operating income? Do you have any way or do you have any financial metrics? When I say financial metrics, I mean naira and Cobu. The problem with you real estate professionals is you come and say it's a good deal, it's a good deal.

You'll be saying is based in Luby, is based in this place, is based in that place. This part is opening up, is opening up. This is business here. You want somebody to be throwing dollars at you. You need answers to the questions that you answer in terms of naira and cobo. Saying something is a good location is one thing, but saying that this thing has good net operating income because it is cash flowing 2 million naira every single month.

An investor cannot be listening and say what this building that I'm looking at like this, You say yes, Sir. You say you're generating 2 million naira every month. I say yes, Sir, that 2 million naira is profit. I say yes, Sir. That 2 million naira is profit, Sir. That's the reason why I'm in front of you today, because I need to borrow some of your money to do this, to do this, to do this, so I can acquire this building these two million that is coming every single month.

I'll be able to sort you by giving you 5500K per month until we pay you in full and then we add interest or you know, whatever. But sure, when the conversation now enters Naira and Cobo, it's a different ball game, same organ investor. Give me this money, uncle. So, so, so you give me this money because this piece of land is in Metama. Metama is a good location. That's not a very strong answer to give the person. We should always look for answers that are naira and Cobo financial metric.

That is something that everybody understands. You say, young man, are you telling me that if I give you 100 M now, over the course of the next four years, you're saying that you will pay me back 300 M? That kind of conversation, Naira and cobo, those are the kinds of conversations that we should be having. So in other words, like my Uncle Sam advised me, Sam Osan, anyway, not really my uncle by the way, but went to the same church.

So I thought his name was Osara and Koi until we're getting married because my father-in-law is from Azisha A dostit. So that's not when I told him that Uncle Uncle Sam or Sarah Koi is coming say or sorry what I say oh sorry Koi. He said no spell it. I spelled it. He said no, their name is not Osani Koi, it's Osani. When I say what Sir, I say Sir, it is Khoe. He say like Khoe is not Koi. It is when in my mind I'm thinking Khoe, how is that when no Koi?

But anyway, that's OK, no problem Sir. So I started saying Sam was that anyway. Then when I saw Kusam, I saw Kusam. I saw my future father-in-law and the guy said your name is not on sale in Koi. He says what's anyway Uncle Sam laughed to say yes, he actually is correct. I said what really He said yeah, it's correct. It's all said anyway. I said how come you don't tell anybody? He said because people can't pronounce it.

So I just let them keep calling me Sam or Sarang Koi. So just in case you're in my situation, you're toasting 1 Beanie Babe and you know her surname is Osan and Kui doesn't know that surname is not Osan and Kui, it's Osan and Hui. You pronounce it well when you're going to meet your in laws. So these are the ways that you figure out if you have a good deal on your hand, especially on the real estate space and you are trying to invest in something that is cash flow positive.

Also to answer this question, is this a good business deal? We also have to keep asking ourselves some questions. We have to run some comps, as Americans like to say. Americans like to come up with really, really fancy terms. Why you saying comps is comparisons? Just say comparisons that all of us understand. You're just need to 1 syllable to do what to save breath. So run some comparisons. So every single time you're listening to your podcast and you hear somebody say we need to run some comps, that's what they mean, comparisons.

It just means compare A&B. There's nothing fancy. So run some comparisons. Other houses in the location, how much do they charge for rent? Other properties in the neighborhood, what is the occupancy rate? Occupancy rate means how many people live in the house. Because there's one thing we have seen in Abuja now, the game is not the same in Lagos because in Lagos, everybody's charging million, million, million Basha people are in the house.

The house is not empty. On the other hand, in Abuja, people are charging million, million, millions and they look at the house and you see that this house is not only empty, it has been empty for the last five years. That's also another thing to help, you know, the real rent of it, the real worth of this property. People say this property is worth 500 M OK is worth 500 M, but nobody is living here and it has been empty for the last seven years.

Is it truly worth? 500 M is the mark I tell you that is really worth that amount. So run some comps, run your comparisons. The properties in the neighborhood, do they rent? How much do they rent for? Are they empty or are they fully occupied? That's what occupancy rate means. Compare when and then the other houses. Do they use them for residential? Do they use them for short stay, for short time or is it for business?

This is how you compare and know whether your own is a good deal or not. So if other houses are worth 500 million, but the houses are full, if our people are begging them, please give U.S. House, give U.S. House, give U.S. House. OK, now it's beginning to make sense because it's 500AM, but still people are rushing. OK, maybe there's something good on our hands. So unfortunately, this is what I told Emma Cam. The only way to answer this question is your investment opportunity.

A good one in real estate, unfortunately involves homework. You have to go and do the homework. You have to figure out these numbers. You have to ask these questions. And then you also, like our Americans, like to say you need to run some camps, run your comparisons. By the time you do all these, you now know whether you have a good deal or not. Now, the whole part of asking these last sets of questions about running comparisons,

looking at the locations and the other houses in the neighborhood, is we're looking for market signals. We also want the market to signal loss whether this is a good deal or not. Look, maybe I'm just a novice. Well, I am a novice because I am not a real estate professional. But I really think all those bodies, places in Abuja where they will say worth 500 million, worth this million, worth that million, but then the house is empty, the estate is empty, The estate has been empty for the last 10 years.

I really don't think it's a good sign of market value because if the market really value adopting, people will be rushing it like in Lagos. In Lagos, if you go somewhere and they call 8 million for you and you say this is too expensive, it happens lots of times. You go away, you say let me think about it, you come back in 2 days and I know somebody has paid. That is a signal from market about the real worth of the property.

So we're looking for market signals, we're looking for market validate validation, We're looking to something external to tell us whether this is a good deal or not. And anyway is a good place to start. If you have bad NY, your NY is minus. And if the comparisons are bad, then my brother, I do not think you have a good deal. But then again, speak to other real estate professionals and they will put you through. So let's take this away from real estate and look to other people, other sectors.

It's still the same. If you're going to present something to an investor and you're going to say give me money, throw some dollars at me investing my opportunity, you have to be able to answer this question in terms of naira and Kobo, Mark Zuckerberg and all the others that have raised plenty of money. It was a question that they answered in naira and Kobo, sorry, in dollars and cents that we need X $1,000,000 to achieve this level of traction.

If we achieve this level of traction and cover X percent of the market, we should be able to explore advertising opportunities and be able to start making money 10/15/20 years down the line at so, so, so and so rate. And then we should be able to pay you back so, so, so and so or the worth of your share will now be equal to this and this and that and that. So you can see there is not a matter of I believe I, it's not,

I believe, I believe it is always naira and cobble. It is always dollars and cents. In fact, you know what I brothers and hip hop say? They say if you don't make dollars it don't make sense. So the answer should always be financial, should always be naira and cobo. It is at that stage that you can tell your rich uncle, the uncle give me you know $5,000,000 or whatever and he'll throw the money at you. He will only throw the money at you when he sees that there is good financial sense here.

So that's it. OK, Yeah, let me wrap it up. This is almost one hour. So that's it. And that's all. Remember, if you'd love to connect, you can call, send me a text message or WhatsApp message on 08064662140. And if you're ready for more of this stuff, especially as it relates to the Nigerian market, then you're in luck because we have over 1200 episodes as at the date of this recording. Just Scroll down. Scroll down, we have thousands of episodes, OK, Well, not thousands, hundreds and hundreds and hundreds of episodes because we have 1200.

So I can't say we have thousands. By the time I have like, who knows, maybe like 5000 episodes, I can now say we have thousands of episodes. So Scroll down, keep listening to the good stuff. Please make notes and go and practice some of the things that you hear about over here. And I hope like Mecam, you're getting value from it. And please share the podcast with others who will get value from it as well. So I will catch you all very soon.