Finding a property priced significantly below market is rare in Nigeria, but when it appears, it can transform fortunes for buyers ready to move fast.
Take the case of a five-bedroom duplex in Ikota Villa.
Two years ago, a real estate investor came across the home listed at N65 million, while bare land in the neighborhood was selling for N100 million to N120 million.
The homeowner needed to relocate, which explained the low price.
Initially excited, the investor hesitated, thinking he could negotiate a lower rate. By the time he returned a week later, the property had already been sold at the asking price. What seemed like a possible bargain became a missed opportunity, highlighting how fleeting and lucrative distressed property opportunities can be.
In Nigeria’s real estate market, such deals remain rare. Yet for buyers with ready cash, they offer potentially high returns, especially when they act quickly and make informed decisions.
Not every discounted property qualifies as a distressed sale. Odusanya, a real estate analyst, explained that true distress sales are quite rare and usually occur when a property is sold significantly below market value due to urgency or necessity.
She described the various forms these properties can take: homes beyond repair, which are essentially valued for the land; “used homes” with minor defects but otherwise sound; and developer distress, where developers sell below market value to free up cash or because projects have lingered too long on the market.
Odusanya shared a personal experience from early in her career. Her team acquired two homes in Lekki Phase 1, originally listed at N140 million for roughly 600 sqm of land in a prime location near Freedom Way. Within a week, multiple buyers were making offers.
“It became a race of ‘fastest fingers first,’” she told Naijaonpoint.
“Many prospective buyers focus on minor defects rather than the unique opportunity. These deals are strictly a business decision—assess the value, factor in renovations, and act fast.”
Despite their potential, distressed sales remain limited, particularly in Lagos’s upscale market. Odusanya explained that homeowners often hold on to their current properties, even if they need to move.
For instance, someone with a two-bedroom flat looking to upgrade to a three-bedroom unit may retain their current home because selling it would not even cover the cost of a similar property closer to the city center. Many potential sellers, therefore, choose to wait rather than move.
High-value homes are rarely sold purely for relocation. Their sale price is often so substantial that using the proceeds solely to move is financially impractical. Owners also frequently have personal, family, or ancestral ties to their properties, which makes selling them just to relocate unappealing.
Conversely, lower-value homes that could be sold for relocation purposes no longer provide sufficient funds as they might have in previous years. The devaluation of the naira has reduced the financial breathing room that such sales once offered, making these transactions less attractive.
For owners of extremely large plots, distressed sales are also scarce because many now enter joint ventures with developers. These arrangements allow developers to construct structures on the land, with profits shared—often 50/50 or 60/40 in favor of the developer. As a result, the property remains tied to long-term development rather than being sold outright, reducing the number of large-scale distressed sales available on the market.
For owners of extremely large plots, distressed sales are also scarce because many now enter joint ventures with developers. These arrangements allow developers to construct structures on the land, with profits shared—often 50/50 or 60/40 in favor of the developer. As a result, the property remains tied to long-term development rather than being sold outright, reducing the number of large-scale distressed sales available on the market.
Odusanya emphasized that in the upscale market, distressed sales often occur for non-profit reasons—such as freeing up cash or severing ties with Nigeria—rather than for generating substantial profit.
Patience is key in this market; those who play the waiting game carefully and strategically can maximize returns when rare opportunities arise.
The Ikota Villa five-bedroom duplex story illustrates the importance of timing. The investor initially hesitated, believing a better deal might be available.
But as Odusanya explained, “A deal that is known by everyone is not a distress sale—it’s just a negotiation. True distressed properties are snapped up almost immediately.”
Similarly, a Lagos-based investor recounted his experience purchasing a home in an estate off Orchid Road, Lekki.
“We had been searching for months, and finally came across this house. The land size was larger than other comparable listings, so buying it was a no-brainer,” he told Naijaonpoint. Despite being abroad, he completed the transaction within a week.
“It’s been profitable. I’ve doubled my initial investment through resale. The key is working with a trusted agent and acting fast.”
Temidayo Ademosu of Arrowhead Homes and Properties in Lagos added insight into why distressed listings appear. He explained that investors sometimes bite off more than they can handle, and if a project stalls or cash runs low, they may release a property at a discount to fund other ventures. Other sellers include elderly homeowners relocating from urban areas to villages, heirs selling inherited properties, people moving abroad, and those facing illness.
“In some cases, properties are sold 30–40% below market value, which can create tremendous opportunities for buyers with cash,” he noted.
Temple Ugwu, Lead Partner at Blumeen Partners in Port Harcourt, illustrated how urgent financial needs can create opportunities for buyers. He shared the case of a client who owned a 994 sqm property in Old GRA with a four-bedroom duplex and three-bedroom BQ, valued at about N650 million. The client needed to purchase another property at Harmony Estate for N450 million, with developers giving him only a month to pay. To raise funds quickly, he listed his Old GRA property at N500 million—over N100 million below its appraised value.
Odusanya also cited developer distress. In one case, a developer had over 24 terrace units that weren’t selling because people liked the homes but not the neighborhood.
“He ended up selling these units at 30% below market value to attract interest. As demand grew, prices were gradually increased to match market value,” she told Naijaonpoint.
She also recalled her Lekki Phase 1 case: after the homes were acquired, inspections and property searches began simultaneously. Within nine working days, the transactions were completed.
“Prospective buyers often get excited at first, but then focus on minor defects instead of the bigger opportunity. Distressed sales are business decisions—you must assess property value, factor in renovation costs, and act fast, as the market won’t wait for you,” she said.
For context, the final sale price for the Lekki Phase 1 properties was N125 million for two homes. A quick renovation on one unit generated N10 million in annual rental income. Had the buyer opted for land only, it would have cost roughly N180 million at N300,000 per sqm.
By 2023, two years after the purchase, the land alone had appreciated to an estimated N360 million, with the renovated unit producing an annual rental income of N14 million. Each renovated home could command N400 million if sold.