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My Financial Situation - Your Thoughts
Abby
#1 Posted : Monday, March 07, 2011 6:43:50 PM
Rank: Member

Joined: 3/7/2011
Posts: 112
Hi Good People,

I need your thoughts on some situation.

I do have some difficulties - because of over-extending myself through investing in undeveloped land/plots. I have several of them.

I am in stable employment and also have housing units where I get some regular income. My BIG problem is that my level of debt is high.

Was wondering on the possible courses of action:

(i). Sell some lands/plots to pay off loans?
(ii). Sell some lands/plots to get money to build multi-unit real estate property, in the ideal case students hostels?

The lands/plots are in areas with good prospects in the near future.

I will appreciate your thoughts.
sorovi
#2 Posted : Monday, March 07, 2011 6:53:47 PM
Rank: Member

Joined: 8/3/2007
Posts: 146
(ii) Sell some lands/plots to get money to build multi-unit real estate property, in the ideal case students hostels?

From the income of these estates you can focus on paying up the debts
young
#3 Posted : Monday, March 07, 2011 7:11:13 PM
Rank: Elder

Joined: 6/20/2007
Posts: 2,075
Location: Lagos, Nigeria
I also suggest option (ii) if your creditors can wait but ensure that the sales proceeds can comfortably build you envisaged structure or better still modify the design (reduce the number of floors) to fit it to your cost of construction.

In future in whatever investment you do, know that cash reserve for emergency is as important as the project(s) itself as ready cash has no substitute especially in real estate investment as you cannot determine when you plots will be sold at a fair and reasonable price especially if you have a limited time frame.
The best time to sale your ripe plots is when you are not in a hurry.

That is where stocks has an edge. In a blink and with T+3 you can sell some stocks that have appreciated and settle your debts. So if you have
reasonable stocks, consider selling them first before you sale your plots.

When I was in a similar situation, it was my stocks investments that bailed me out without a blink, as I can always rebuild my stocks portfolio gradually, but the plot you sale now cannot be gotten back again FOREVER at the price you sold on the same location.

But selling some plots to develop others is a fair deal, a win-win situation, or can I say the best of the worst situation for you.
The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
muganda
#4 Posted : Tuesday, March 08, 2011 9:40:21 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
Very good advice from @young.
young wrote:
In future in whatever investment you do, know that cash reserve for emergency is as important as the project(s) itself as ready cash has no substitute


My advise would be to do both (i) and (ii) and in that order. Building the multi-unit real estate property will be so much easier if you have an emergency cash reserve first.

If you do not reduce your leverage (loans) first, wouldn't any small unexpected occurrence, bring you to a desperate situation again?

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