The real estate investor mindset
Scenario: A foreclosed property looks ugly because it has not been maintained for quite a long time, it obviously needs repairs, it is dirty and stinks, and looks like a house that does not belong to the neighborhood because the surrounding houses look okay, although the house is really not that different from the other houses in terms of house design and structure.
Investor Mindset 1…
“This foreclosed house stinks, this is such an ugly house and I will not buy it. Real estate investing sucks!”
He then goes home, watches TV, etc, and then goes to sleep, ready to get back to the rat race the next day.
Investor Mindset 2…
“This foreclosed house stinks, this is such an ugly house, this would take lots of money and time to clean-up and repair. Why bother?! Real estate investing sucks!”
He then goes home, watches TV, etc, and then goes to sleep, ready to get back to the rat race the next day.
Investor mindset 3…
“This foreclosed house stinks, this is such an ugly house, this could take lots of money and time to repair. What the heck, I’ll get an estimate for repairs.”
After getting one estimate, he says “What the… this is so expensive!”. This will never work, real estate investing sucks”
He then goes home, watches TV, etc, and then goes to sleep, ready to get back to the rat race the next day.
Investor mindset 4…
“Hey, this foreclosed house stinks, this house is so ugly, but I can see an opportunity here! Sure, this needs time and money to repair but let me check how much would be the After Repair Value (ARV) of this property”
He then gets comps from the other houses in the area.
“I’ll check if the cost for repairs will have reasonable returns, especially since this looks like a nice neighborhood, I might get a high enough ARV which would justify the cost for repair. Maybe I can use the repair costs to get a discount from the bank.”
After analyzing the numbers using repair estimates, comparables, projected monthly cashflow, and the asking price of the bank, etc, he realizes that the numbers don’t look promising and says “This will not work as is but let me see… how can I make this work?!”
“If this property doesn’t work, it’s okay… “
He continues searching for a way to make the numbers work either for this property or the next… or the next… until he eventually finds what he is looking for! The cycle continues…
How about you…
Which of the real estate investor mindsets above do you have?
If you ask me, I have had all of the above mindsets at one point or another, and I still do at times. I just wish that the last mindset above will always be the mindset that prevails. 
—
To our financial freedom!
Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Click here to contact me via E-mail
Mobile phone (Call/SMS): +639178843882
Twitter: http://twitter.com/jay_castillo
Facebook: Foreclosure Philippines fan page
Text by Jay Castillo. Copyright © 2009 All rights reserved.
PS. If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.
PS2. Larry Gamboa and Bo Sanchez will give the Think Rich Pinoy Seminar this November 21 at the Philamlife Building in UN avenue in Manila. Larry will discuss his unique Real Estate methods, buying foreclosed properties and turning them around for passive income. You’ll also get to play Robert Kiyosaki’s CashFlow Game and learn! To attend, click here now!
PS3. If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.
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Tagged with: foreclosed house • foreclosed property • Mindset • Real Estate Investing • Real Estate Investor • real estate investor mindset
Filed under: Real Estate Investing
Yes, repossessed cars should be available through bank financing but the rates would vary depending on the age of the car and the loan term. Better call them up to get an idea for any particular repo car you might be interested in....
bravo !
Salute!
I think I’m real estate investor number 3, though, I don’t really loose hope and stop looking. I just get stuck! I’m having a hard time especially on the part of analyzing the numbers using repair estimates, comparables, projected monthly cashflow, and the asking price of the bank.
Jay, can I make a request? Can you write an article about this? Or maybe you did, I just haven’t read it.
Still, thank you!
Hi Liza, actually you are doing better than me when I started. You actually had the guts to negotiate and give an offer to a private seller. I chose to stick with talking to banks, which I believe is easier because banks are motivated sellers.
I believe I’ve written about this but in bits and pieces so I will definitely consider your request and write a series about this. Thanks!
hi poh,,my gusto lng po sna ako mlman kse bmili po me foreclose house,,wla mnlng me pnghhwakan documents kundi un memorandum of agreement at receipt lng..nbyran kna hlos un full dwnpyment at processing fee..tpos mgugulat ako my ngprenovte ndw nun properties n bnili ko it means d p pla ako 2nd buyer nun db?? hndi lng ako andmi nmin ng friends ko nloko ata nila kse wla tlga sila bnbgay n documents khit ano.. hope mail nio me pra mkakuha me advise wat will i do,mlyo po kse ako now.. eto po mail add ko greizze03_japan@yahoo.com
thnax po
Hi Greizze,
May I ask from where you bought that foreclosed house? We need to inform the public so that no one else will be victimized. I’ll send you an e-mail as well.
@Nhorvel and Earth, thanks!
I was inspired to write this after I visited 5 condo units early morning yesterday. The owner mentioned something like “Iba talaga pag investor ang tumitingin ng property, nakikita yung potential. Pag hindi investor, maririnig mo “Ang pangit naman…”
I suppose if you stick to doing this long enough, you will really begin to look beyond the condition of a property and see its potential and picture what it can become.
Of course everything still depends on the numbers and if the deal will make sense.
Wow, Jay, ang galing mo talaga. Parang nai-inspire uli ako papuntang real estate. I discovered your site through my freelance writing for U.S. clients. Ang topic ko kasi over the past several months ay U.S. foreclosures. Sa Google alerts ko everyday, lumalabas yong alerts mo, wow! kasabay mo yong mga alerts from Wall Street Journal New York Times, etc. Galing ng rank mo… Very informative at very inspiring yong mga articles mo, keep it up. Kung nag-invest sana ako noon sa mga katabi naming foreclosures ng Bahay Financial dito sa Muntinlupa at nearby Cavite, at hindi sa waffle franchise, sana di kami nalugi ng malaki,at sana may regular income na. May neighbor bought one, at okay siya. Kaya dati, di muna ako nagbabasa ng site mo kahit lumalabas sa alerts ko, kasi nare-remind ako about my failed investments. Pero, slowly, nai-inspire ako uli, especially now that we may have our final chance of recovering… Thanks for the articles.
Naya´s last blog ..Comment by
Hi Naya, thanks! I really hope you get inspired and start investing. Wow, you write about foreclosures in the US pero you are based here?! Ang galing! I’m sorry to learn about your failed waffle franchise pero don’t worry about it. Sabi nga ni Rich Dad failure is part of learning and not being afraid to make mistakes will lead to success. Good luck and I will also visit your hubpages!
Jay! See you on Trace’s seminar this Dec. 12. I have registered even if I am on a very tight budget. I believe I can get a lot of knowledge from that seminar…
Hi Sanny! I look forward to seeing you there as well!
all of the above!!!! =)….. a perfect description of what i always think when i passed by run down houses/bldgs and foreclosure ads…. it’s like certifying that day dreaming does make money…
Hi Shiela, that happens to all of us so I guess the key is really to learn on focusing on the potential of a property and the ability to envision it after renovation. =)
The real estate investor mindset
Thanks for sharing
You’re welcome leicester!
Hi , that’s great, looking forward to reading more posts.
I really enjoyed your page so I’ll definitely keep you in my feed reader
this for future reference!
Thanks a lot Alexis!
Hi Jay,
This is a somewhat unrelated question…
Can you share how to become a real estate broker? I have been searching the internet for information but could not really find any. I think there is some kind of seminar or class and then a test. Is this correct? Where can I take the class? What are the requirements?
Thanks for any help!
Hi Sam,
Thanks for the question as I’m sure a lot of people also have this in mind. Before the RESA law, to become a licensed broker, one just has to attend a duly accredited Cromprehensive Real Estate Seminar and Review or CRESR and then take and pass the licensure exam by DTI, provided one has all the requirements.
After the RESA Law was passed, the most common interpretation of the law is that one requirement to qualify for the licensure exam, which is now to be given by the PRC, is to attend a 2 or 4 year course on real estate.
I suggest we wait for the RESA Law implementing rules and regulations which should be out after about 6 months initial publication of the RESA Law. You can read more about the RESA law in my post: Real Estate Service Act of the Philippines (RESA) Signed Into Law, Real Estate Brokers’ Licensure Exam Postponed
Hello to everyone on the site.
I quite enjoyed reading your posts, especially the positive attitude that comes out of it and you investors.:)
To be honest, I have just started out as a property specialist at ayala land premiere, and was getting a bit disheartened because of the effort you really have to put in.
But it’s true; there is so much to appreciate and if you think about it, this is one venture where the returns will greatly outweigh what you input.
So to everyone out there, don’t lose hope!:D
If anyone’s interested in sharing in the business of ayala land premiere, don’t hesitate to contact me either.
I’ll be more than happy to support anyone in any way I can.:)
Hi Bea,
Small world kasi I attended a brokers accreditation seminar with Alveo a couple of months ago. Although Alveo is different from Ayala Land Premiere, I guess they are still in the same family under Ayala Land. Yes, I understand what you mean about the effort needed, not to mention the time, which is why I cannot focus on it at the moment. Maybe when I’m officially out of the rat race and have all the time in the world, I’ll give it a try.
Thanks for the kind words and for dropping by!