Last Saturday I handed 36 post dated cheques to my Real Estate Agent for my first property investment. I had mixed feelings doing that. First I was rather cautious - I’ve heard of too many scary scam stories about real estate investing. I was a bit nervous. What if this turned out to be another one of those fraud stories? I also felt a little excited that I was finally starting it. As I turned over the checks and received the receipt, I finally told myself - “This is it.”
The property is a condo unit. This was a pre-sell. This means the the property is still under development and should be finished by the end of next year (2008). I decided to go after it because the terms were pretty good. You see, I’ve been looking at real estate opportunities since last year, when I read Kiyosaki’s Rich Dad, Poor Dad and Dr. Gamboa’s Think Rich Pinoy. If you’ve read these books (which I highly recommend), you’d understand what I mean.
The general idea is to make ‘money work for you.’ You do this by putting your money in opportunities that will allow it to generate income.. Ideal opportunities would be real estate, stocks and businesses. You would know this if you have played the Cashflow 101 board game. Real estate is favored because you can set up rental properties that will allow you to earn income. The best real estate opportunities are those that could get you immediate income.
For instance, if you can get a bank foreclosed property for 1 million pesos (around US$20,000) at good terms like:
- 10% downpayment
- Balance will be paid through bank at 20 years to pay.
… then you can have it for around an initial cash out of P100,000 and a monthly of say, P7,000 (I’m not sure about this figure but I’m willing to bet you could get it at a much lower value).. Once you have that, you could rent out the place for around P10,000 and get a P3,000 regular monthly income. Do this for several properties and you should be getting some regular cash flow coming in.
(Side note: We actually saw a foreclosed property in Marikina yesterday with similar terms above. We might actually look at it soon.)
My initial investment is not really contributing to my cash flow yet - so it’s a negative income value from it right now. However, the potential for for revenue once I get the actual property was too good for me to pass up. The condo I went after had the following terms:
- No initial down payment
- P10,000 Monthly for the first year
- P12,000 Monthly for the second year
- P14,000 Monthly for the third year
- P13,000 Monthly for fourth year up to 15 years.
(Note: This are the rough numbers, not the actual values)
The rates above where just within my range. I could pretty much allocate some cash for it.
When I inspected the place, I found that some of the other condo buildings where already finished. This allowed me to take an initial look of how the buildings and the finishing would look like. The place was one Tamaraw FX (a taxi sevice here in manila) ride away from Megamall (one of the biggest malls in Manila). The ride would be around 30-45 minutes depending on the traffic.
I already know that the first condos (those that are already finished) initially went for P800,000. One unit is being bought now for around P1.3M. If I had been one of the first investors there, I could’ve sold one finished condo for a hefty P500,000 income. Not bad.
So my plan for now is to invest in this property now. If the area around it develops further and it becomes a prime spot, I might rent it out later. Alternatively, I could sell it later to get some potential income. I could also get a pag-ibig loan (with much lower interest rates) to pay off the remaining balance by the third year. Hopefully, instead of paying P13,000 monthly for fifteen years it could go down to P10,000 monthly. In that way I can rent it out at a much more competitive rate.
Well, time will tell if I made a good decision or not. I hope all turns out well.
March 27th, 2007 at 3:09 pm
Wow, good for you! Good luck! I might need to read the book as well.
March 28th, 2007 at 7:14 am
Good luck!!!…
March 28th, 2007 at 7:22 am
Hi Jozzua,
Glad to see you’ve finally got your feet wet.
I remember when I first came here to Korea in 2002 after finishing my 4-year gig in Palau. The first thing I did was buy a 200sq.m. subdivision property in Baguio worth 500k. Since then the value has already gone up to a minimum of P3,500/meter, so that nets me a nice 200k, and at that price it’s still very attractive. Now I’m saving up some more to put up an apartment there (two units below, one on the second floor for my family). That should help bring another 10k/month on rents (5k each unit).
I was also thinking along your lines of going for a Pag-IBIG loan, since I already completed their mandatory seminar last year during my vacation. The interest rates are really low as you say, and with our current economy bringing down the interest rates even further, that should lock me on a very attractive loan package.
Kudos, bro!
March 28th, 2007 at 7:34 am
Heya Gabs, nice to see you earning some money already from your real estate investments! Thanks for the mention on the entrepreneur forums as well. Hey, I hear that prices of cement are going up. It’s supposed to be an indication the real estate properties are increasing in value.
March 28th, 2007 at 9:23 am
Yes I heard about it too, that’s why I’m looking into prefab construction now. I’ve been in touch with a local company there, Vazbuilt (www.vazbuilt.com), since last year and they might prove to be a better alternative than have everything done from scratch. Perhaps you should also consider this if you’ve got more real estate plans in mind.
May 15th, 2007 at 9:24 am
Jozz:
Is this in Cambridge Village?
Grats to your first step. I read those books. Very inspiring indeed.
I also would like to try Cashflow 101. =)
Thanks.
May 16th, 2007 at 1:23 pm
Hi Emn, yes it is Cambridge Village. I also plan to play around with the local stock market very soon. I’ll be playing real life Cashflow 101!
June 4th, 2007 at 8:00 pm
hey Jozzua,
have looked at the condo-hotel properties offered throughout your country? Some of the returns look outstanding?
June 5th, 2007 at 6:13 am
Yes Troy, I did. I am told it’s a good time to invest in condos.
June 13th, 2007 at 10:34 am
Hi Jozzua,
Know any seminars where this subject is discussed? Thanks.I’ve read the book and the sequel, with 4 quadrants. Good luck !I think also that you should not do it alone, i mean consider forming a partnership with these guys who posted comments.
June 13th, 2007 at 1:25 pm
Hi Richard, I do get emails every now and then informing me of seminars related to Cashflow and real estate investing. I’ll post these as soon as I get any updates.
July 17th, 2007 at 1:27 pm
Hi there! real estate investment is indeed a good way to make your money work for you. Worked for me too!!! bought a unit at Serendra for 2.7M, now it is already 5M. Recently got a resort at Playa calatagan (last March) and the appreciation already gave me an astonishing 110K. Now I am currently looking at a condo unit at the Newport City by Megaworld(presently the #1 in Phil’s real estate business). The units will be erected beside the new airport, a golf course, a business center, mall and marriott hotel. Also, please contact me incase you are interested at Newport City so we can help my good friend who works there(he gave me a good discount and a light payment scheme). My numbers are 09209516358/09228550603 or email me at jorge_cayton@yahoo.com. Take Care!
September 25th, 2007 at 11:05 am
Hi, i have read rich dad poor dad & rich dad books & i have played cashflow101 & think rich pinoy but i’m still not sure if i will start investing now. I have educated myself but still i think it’s not yet enough. I’m still looking for someone who has already done real estate investing so that i will be more educated before investing. thank you. Do you know anyone who i can consult with or seminars on real estate investing? thank you.
January 7th, 2008 at 9:22 am
hi, meron ka bang mga articles about investing on stocks, at ska kung san at paano akong magsimula, or kunf me alam kng mga seminar about investing on stocks, please paki-email naman, tyy
January 9th, 2008 at 10:45 pm
Hi Guys,
Seems your having fun with your investment “activities”. Yes, indeed it’s the best time to go to property investments. The bank interests terms and rates are in its softest. Developers are making it also for ordinary Filipinos like most of us capable of investing in properties that were just a beautiful dream before. I’ve done my share of investing in our first and primary dwelling place here in Sikatuna VIllage. It’s a townhouse, and like your, the price has already increased. Our property sector is really on an upswing which is a reversal of sorts during the agonizing Asian Crisis days. I am a licensed real estate broker, and I am in awe of the pace projects are being launched and being fully sold out only in a matter of months. Sites, which otherwise would have been too remote and “un-marketable” in the past are becoming new frontiers of development. I am currently handling prime and hot selling properties which you might be interested to invest in, kindly contact me through 0927-6966038 or through my email address geridel737@hotmail.com. Condo, townhouse,, lots, houses and lots, resorts, club shares, I have all the best investments in terms of price and terms that can specifically suit your taste and preferences. God Bless you all.
July 17th, 2008 at 1:52 am
i purchased a condo last year and its really paying up well. condo offers 0% interest for 5 years! so i grabbed it. i am paying on my 2nd year now…and now, I have someone renting my unit as well. let me know if anyone is interested and i’ll be happy to give you contact person. location is just 5 mins away from megamall. walking distance to Ultra, bagaberde, valle verde country club. - jmt_14325@yahoo.com