Have you invested in Indian real estate? It is time for a real(i)ty check!

Are you tired of receiving rosy project reports instead of returns? 

The Indian real estate picture that was painted till 2008 was such a riot of colors that it pulled investments from different countries and people from all over the world. From pension and employee provident funds to big industrialists, the 20 to 25 percent return promise sucked in money into India's real estate projects like a black hole. What is even more relevant with that statement is that like a real black hole, a lot of the money, like light, seems to be on a one way street.

Forget about 25% returns on your investment dear foreign investor, you would be lucky to have your principal back in some cases, the way things are going.

What got you to invest in Indian real estate in the first place?

With crazily low rates of returns in secure deposits and investments in your country, you wanted your money to reap more returns than what you were getting. Then, some folk showed you the Indian real estate investment dream. "Double your money in 4 years" is what they said "I'm fine if it doubles in 6 years", you made the intelligence compensation in your head, factored in contingencies and stuff and thought. And then you wrote out that check. You, could be a pension fund (man, we don't envy you), an industrialist (you should have kept your money growing in those machines), owner of a software company outsourcing jobs and thus employment out of that country (you deserve it man, you should have done a due diligence outside of Google too) or anyone who has the money to do so.

Who took your money?


If You are reading this, chances are that there is something inside your head which is buzzing once in a while, telling you that everything with your Indian real estate investment is not well. Let us confirm that there is some truth in the nagging voice in your head. And FYI, all our offices are in India and we work with some great real estate builders of this nation.

In our years of life as real estate professionals, we have never spoken with an international real estate investor in our lives. There was never the need or the want to do so. Yes, Indian fund managing companies have been around us, got cool presentations made by us in various capacities, ordered some expensive french wine for us and left, to be seen again for exactly 6 hours at the end of the next quarter. What we are trying to rub in is that 95% of the professionals in India's boooooming real estate industry do not know that You exist and it is your money that is paying his salary. So don't be shocked if you are treated like someone from outer space with a brick blaster ray gun in your hand. Apart from the board of directors of the real estate firm and the Indian fund managing company, most of us do not know about you and we do not feel the need to know. We are a very satisfied and happy bunch of people.

Gentlemen from your nation unearthed the India shining story, brought it to your breakfast in a nice coffee table book and took your money. A lot of Yous gave them money. And then they had a load of money. So they got in touch with some Indian finance dudes, flew down a couple of times, saw some sites and presentations, and left behind that big fat check. Of course they charged you a hefty fee for it. For what? Do they cover risks? Probably not. They promised you the "double your money in 4 years" thing and that swept you off your feet. You chose to overlook the fine print. And that is completely pardonable. If someone told us that we would get annual returns, which are 10 times more than what we would normally get, we would have sold our homes and invested. That is us Indians again. So we understand.

Where is your money now?

Back in India, we guys, who actually work in the hot and dusty fields, building great real estate have no understanding of this. We don't know anyone anywhere. We would feel responsible if the facts were presented to us. We would do our best for you guys with love and care. We would protect your investment if we had seen you around. If you were around to pat us on the back when our salaries were rolled backwards.

Some of your money in real(i)ty is funding quite a few amazing and unsustainable lifestyles in India right now. But don't worry, in the larger scheme, all the luxury retailers from your country are setting up shop in India and taking some of it back to your nation right now by selling merchandise at astronomical rates.

What should you do then?

You remember how some of the big investment banks sunk back in 2008-09? Every woman that stepped into motherhood in that time period officially qualifies for the mother of all mothers trophy. The darn era that lasted all of 13 months produced so much learning! So, what you should do first is to familiarize yourself with the truth. Being prepared helps make better decisions and saves financial losses, the fortune cookie at your local Chinese eatery would have told you by now.

Take some time out and write to/ meet the people who manage your India real estate investment. Ask for recent site pictures, status of statutory approvals, environment clearance from MOEF of India, status of sales and/ leases if your investment is project specific. Else, get something credible to read on the Indian real estate scene and the important happenings lately.

We are a bunch of real estate professionals who would love to hear from you and offer some reliable on ground help. Write to Rahul Mishra and let's get a conversation going. A second opinion never hurt anyone, did it?

Cheers!

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