7 tips to help you get you started with real estate investing

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I just noticed that so many are people are asking “How do I start with real estate investing?”. I was just about to answer one of the comments when I realized my reply was already good enough to be an article. It already had more than 700 words in it! Anyway, I believe the timing for answering this frequently asked question is perfect as we start with a brand new 2012!

For those who asked the same question, here goes…

7 tips to help you get you started with real estate investing

1. Begin with the end in mind. Answer the following questions:

  • What do you want to achieve with real estate investing?
  • Is it financial freedom?
  • How do you define YOUR financial freedom?
  • What is it in in terms of money (ex. passive income)?
  • Is it about time freedom?
  • Is it about having the freedom for you to pursue your real purpose in life?
  • Is it about all of the above?

I believe the answers to the questions above can lead to what people call a “Vision”. Actually this is probably the hardest part of the process of getting started, and yet without this, one might end up running around in circles for 48 years. Okay, I’m exaggerating.

Seriously though, this is the first thing you should do, but it can get complicated. For now, I suggest you start forming your “Vision” in your mind and let’s get back to this in another post.

2. Learn as much as you can about real estate transactions in the Philippines. If you are going to invest in real estate, you will certainly enter into real estate transactions, so you need to familiarize yourself with the “ins and outs” of these transactions.

If you want to focus on investing in foreclosed properties, you can try attending a real estate auction as an observer and learn as much as you can, before actually buying any foreclosed property. Don’t be afraid to ask questions, especially when the bank officer says you should have already done your due diligence!

Whether foreclosed or not, you also need to become familiar with the legal aspects of property ownership, real estate taxation, real estate laws in the Philippines, etc. If these sound like what you would find when attending a seminar or review as part of the requirements to become a licensed real estate broker, give yourself a pat on the back because that is my next tip…

3. Attend a seminar/review for aspiring licensed real estate brokers – Do this  not really for the purpose of become a licensed realtor, but more for the knowledge. Of course, it wouldn’t hurt if you did take the real estate brokers exam and passed!

4. Find your niche. You need to become an “expert” in one area, preferably an area that is near where you live, or where you work, any place that is near you. When I say near, it should be no more than 30 minutes to an hour away. Anything farther might lead to wasting your precious time, money, and effort.

No, you cannot just say you want to invest in Metro Manila. You need to find something smaller, like a village, a barangay, a municipality, or whatever area suits you. You need to be an “expert” so that when an opportunity knocks, you will know if it really is a good deal or not. I believe it is hard to get into this level if you focus on an area that is too big, like the whole of Metro Manila for example.

Don’t believe me? Go ahead, try to focus on the whole of Metro Manila and analyze every “promising” deal that comes your way, and see how fast this will burn you out.

5. “Pay yourself first.” I believe the best way to raise capital is to raise your financial literacy so that you can manage your money and start saving for your investment. Don’t think about those “nothing down” real estate deals. If your problem is the lack of money, maybe your problem is the way you handle money.

Going into real estate investing won’t solve the problem of mismanagement of personal finances, whether you have a lot of money or not. You should solve this problem BEFORE you start investing in real estate. The simplest way to start is to pay yourself first. If you have read Robert Kiyosaki‘s “Rich Dad Poor Dad, or David Bach‘s “The Automatic Millionaire, or T. Harv Eker’s “Secrets of the Millionaire Mind”, or even George S. Clason’s “The Richest Man in Babylon, you would know the wisdom of paying yourself first.

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6. Let people know you are now a real estate investor. Announce to all of your facebook friends that you now invest in real estate. Send a text message to all the people in your phonebook, and/or send an email to everyone in your contacts list. Just remember that spamming is bad! Don’t forget to get some calling cards, tell people that you meet how they can contact you through this valuable “leave behind” that they can keep and retrieve when the need arises.

7. Join or start your own real estate investors club. Preferably, join a group with people from the same same area within your niche. It can be a formal real estate club, or just a network of friends that are also involved in real estate investing who meet regularly (how often is up to you, but don’t over do it!).

It would be great if your club or network includes real estate brokers, lawyers, accountants, etc, those who can help you with how things work, specifically in your niche. Aside from making new friends, you may also find mentors and business partners. Just be careful and keep an eye out for people who are out to make a quick buck at your expense…

~~~

Please bear in mind that I wrote this much like I was answering a comment, so this list only includes 7 tips that came to mind and there are definitely more! I’ll most probably have a part 2 for this in the near future.

Any more tips to get started?

Are there any other real estate investors out there who are willing to share? If you have already bought an investment property, I’m sure others who want to get started would also like to hear from you! Please share more tips through the comments below. Thanks!

Happy Real Estate Investing in 2012!

~~~

To our success and financial freedom!

Jay Castillo

Real Estate Investor
PRC Real Estate Broker License No. 3194
Blog: http://www.foreclosurephilippines.com
Follow me in Twitter: http://twitter.com/jay_castillo
Find us in Facebook: Foreclosure Investing Philippines Facebook Page

Text by Jay Castillo and Cherry Castillo. Copyright © 2011 All rights reserved.

Full disclosure: Nothing to disclose.

Photo credit: pobre.ch, on Flickr

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About Jay Castillo

Jay is the founder of Foreclosurephilippines.com where he shares real estate investing tips and foreclosed property listings. He was an I.T. Manager that loved to make things work, which is exactly what he did when he crossed-over to Real Estate Investing and Internet Marketing. He is also a licensed real estate broker with PRC License # 3194 ... [Continue reading]

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  • jasyon

    Nice article. I want to an agent/buyer and this blog is really helpful for a beginner like me.

  • Jonathan

    This is a very interesting article Jay. I am also Jay. Question lang po… I am planning to start on real estate investing, I am an OFW is it advisable na may invest into real estate jan sa philippines eventhough I am here abroad?

    And I would also like to ask kung meron po kayong alam na short course about real estate investing that I can take online?

    Thanks,
    Jay

  • charm

    Thanks for the tips :) Happy New Year and God bless!

  • Jonathan

    Thanks lot a Mr. Jay, i’m avid reader of your blog & the works of Robert Kiyosaki as well. I was inspired by his book that after 1 year i started my own cafeteria & plan it to expand to become a restaurant. I’m a civil engineer & i’m taking my MBA to increase my financial literacy & who knows with your important tips i might start my own real state company in the future. Thanks a lot & more power.

  • http://amz.com.ph Gelo Batac

    Hi Sir Jay,

    These tips are really very useful specially if you are new to investing. I’m very sure that a lot of us, who keeps reading your sharing would really been delighted with this information. Your very truthful approach in writing your personal experiences really imparted me with something valuable thing to keep in mind to, when I’m about to deal with my future transactions. I hope that you’ll keep this kind of approach in your future writings.

    Keep empowering us Sir Jay. And thank you so much.

    • http://www.foreclosurephilippines.com Jay Castillo

      Thank you Gelo for the kind words, happy investing!

  • http://denvercoluxuryhomes.com/ Joyce Del Rosario

    Great tips to consider. But how will I start to establish real estate investors club? Any precise ideas you can suggest? Thank you.

  • Mike V.

    Hi Jay,
    I would like to ask regarding tip number 3 (real estate brokers exam).
    Could we take the exam without any curriculum requirements? I mean is there any requirement about the educational background or units you have taken before you could take the exam?

    By the way, I’m just new in this kind of business and your blog is really helping me a lot. Thanks to you!

    • http://www.foreclosurephilippines.com Jay Castillo

      Hi Mike, at the moment, you need to be a college graduate and you also need to have take a 120-unit CRESR. When a course leading to a degree in Real Estate Service is implemented by the CHED, this course will; become the requirement. Please refer to section 14 of the RESA Law IRR below to see the complete requirements. Thank you also for the kind words!

      “SEC. 14. Qualification of Applicants for Examinations. In order to be admitted to the licensure examination for real estate service, a candidate at the time of filing his/her application, shall establish to the satisfaction of the Board that he/she possesses the following qualifications:

      (a) A citizen of the Philippines,

      (b) A holder of a relevant bachelor’s degree from a state university or college, or other educational institution duly recognized by the CHED; Provided, That he/she has completed at least one hundred twenty (120) credit units of real estate subjects and training from accredited service providers, as may be determined by the Board; Provided, further, That as soon as a course leading to a Bachelor’s degree in Real Estate Service is implemented by the CHED, the Board shall make this course a requirement for taking the licensure examination,

      (c) Is of good moral character, and must not have been convicted of any crime involving moral turpitude,

      (d) An applicant for the licensure examination for real estate consultants must show proof that he/she has at least ten (10) years experience as a licensed real estate broker, or an assessor, or as a bank, or institutional appraiser, or an employed person performing real property valuation, or at least five (5) years experience as a licensed real estate appraiser.

      xxx”

  • http://twitter.com/iamVivianG Vivian Galan

    Hi Jay, great blog. Where can I possibly check schedules of seminars? Interested to become both realtor and for investment purposes. Thanks a lot!

    Attend a seminar/review for aspiring licensed real estate brokers – Do
    this  not really for the purpose of become a licensed realtor, but more
    for the knowledge. Of course, it wouldn’t hurt if you did take the real
    estate brokers exam and passed!

  • http://www.avidaland.com/ philippine real estate

    Thanks
    for sharing those tips about investing properties. That information would
    really help those who are planning to invest. 

  • Maria

    Hi jay.

    I have been lucky enough to buy a foreclosed property at a good price. Its an office unit in a condo in makati and it seems like i am getting a lot of inquiries on it.

    Since i am just starting, i do have a lot of questions. Do i need a leasing permit in makati if i will have the property as an asset of my small business registered already in another city?

    If i need to register another company in makati, can i use the same property as my business address even if i will have it rented out?

    Thanks

    Maria

  • mako

    Hi Jay,

    Salamat dito sa blog mo, malaking tulong sa amin na mga interested sa real estate investment.
    Katulad ng marami dito, gusto ko rin maging financial free para mas maraming oras kasama ang asawa at mga anak ko.

    Sa opinion mo, ano kaya mas ok na investment, magpagawa ng apts for rent (may lupa yung magulang ko) or bumili ng property tapos ipa-rent?

    Salamat

  • mercy

    hello sir Jay, am so thankful that someone like you shared his experiences regarding real estate investing and how to start. more power to you!!!! can’t wait for the next tips!!!

  • http://cdo-realestate.com/ Cagayan de Oro Real Estate

    Thanks for this tips, really useful. Do you know a club in Cagayan de Oro ?

  • Eric Skicki

    I strongly agree with your point number 4 – “finding your niche”. I see it too often. Too many self proclaimed real estate investors claim they are experts “investing in Mississauga” or any other major city.  Like you pointed out, it’s all about finding that micro community and focusing on that.

  • Mhae_lovely

    Hi Jay,
     Isa po ako sa interesado malaman panu mag invest in real estate investments. Tama ka sa sinabi mo tungkol sa book ni robert kiyosaki which I like his book to read so much… to create a cashflow.
    I like to learn more about on how to invest in real state. Kindly give me a tips lalu n sa foreclosured properties?
    Thanks a lot and more power to you!

    • http://www.livingcashflow101.com/ Ronald Cagape

      Hi Mhae, follow the tips above. :)

  • Bravy Uy

    HI Jay,
    Thanks much. I actually never started to join a real estate club in Pasig. Been trying to network with people but this one did not come across. Would you know a club in the area of Pasig where I can join?

    Thanks bro!

    PS. Kelan tayo meet to discuss re ads?

    Bryan Uy

    • http://www.foreclosurephilippines.com Jay Castillo

      Hi Bryan, I haven’t come across any other real estate investing clubs in Pasig or in any area in Metro Manila for that matter. Why don’t you start your own? It can be any informal group. We can discuss this along with the ads next week. Just let me know bro. Thanks!

  • http://www.facebook.com/people/Stephen-Luke/100000696840336 Stephen Luke

    Hi Jay,
    I bought a foreclosed property in Pasay which is a penthouse condo facing Manila Bay.
    It’s a 2 bedroom around 65m2.
    Now the property next door has come available, do you think it adviseable to join two apartments together to make 1 x 130m2 apartment? (Knock down one wall to achieve this)
    Thanks in advance

    • http://www.foreclosurephilippines.com Jay Castillo

      Hi Stephen, nice to see you here! With regard to your question, it would really depend on your objective. If it is to increase rental income, you need to confirm if a 130sqm condo in the Bay area is in demand. Obviously you also need to know if the rent for one big unit is more compared to the combined rent of 2 separate but smaller units.

      Personally, I would rather have 2 separate units so that even if one
      gets vacant, the other still has incoming cashflow, as long as it is
      tenanted.

      If the bigger space is for your own use then I don’t see any problem with that, just avoid knocking down any load bearing beams.

      Is this the unit you mentioned when before?

  • http://www.livingcashflow101.com/ Ronald Cagape

    Hi Jay,

    I’m the first investor to post! :)

    I would add that you go window-shopping for properties!

    When you have decided on your niche or while you are deciding, start to look at properties. Get a notebook and a newspaper and start calling on properties. Arrange to visit the properties and check them out. Your objective is not to buy but to become familiar with the area and the prices.

    It’s important to get started doing something to get the mind working. As you go inspect properties, you’ll find that you still don’t know what to do. You have so many questions to ask. So write down your questions in your notebook and bring it to the next seminar you will attend or the next mentor you’ll meet.

    We do have an investors club in Makati but it’s currently by invitation to people who have attended the Think Rich Pinoy seminars and who have available funds.

    As Jay would say, “Happy Hunting!”

    • http://www.foreclosurephilippines.com Jay Castillo

      Great tips Ronald! Thanks a lot for sharing. I was hoping you would drop by and give your inputs. Thanks!

  • http://auctionbank.blogspot.com/ auction

    Thanks for your tips…..great info….

  • Owwie_14

    this is a nice article for those who want to start in this business. please also advise what does a real estate investor really do? are they into buy and sell, or buy and hold business?  what would be the easiest to start? how much money do you need to start in this business?

    • http://www.foreclosurephilippines.com Jay Castillo

      Hi Owwie,
      Strictly speaking, a real estate investor buys income generating properties which generate income through rents. A lot of people like Robert Kiyosaki say that people who buy and sell properties are not really investors as they invest for capital gains. RK says real investors invest for passive income which come from investments.

      However, buying and selling properties still has a role in one’s long term plan in becoming a real estate investor as he/she can use the profits from capital gains to buy rental properties later on. I hope I am making sense…hehe.

      As a general rule, if you are going to buy foreclosed properties, you need at least 20% for the downpayment and a little more for repairs, etc. It really depends on you on what price range you want to start with and where you want to do business. Goodluck!

  • http://pinoyhomebasebizz.blogspot.com/ Nestie

    I been going home form qatar in january 16, and im decided not planning to invest in real estate , though i have my doubts and fears, after reading this post it gives me a little push, and i will follow your tip no 2 as soon as im back there in the philippines

    • http://www.foreclosurephilippines.com Jay Castillo

      Good for you Nestie! Goodluck!

  • Hmkaw

    Hi,
    I am also interseted in joining real estate investor’s club. if you know any please email me at hmkaw@yahoo.com. Thanks

    • http://www.foreclosurephilippines.com Jay Castillo

      Hi Hmkaw, as mentioned above, 
      I might setup an area in foreclosurephilippines.com that can be used by people to form groups per area but I will probably do that after I finish other projects I have already started and are long overdue. Anyway, I will surely announce it when it is already online. Cheers!

      • JR Rosales

        This is a nice idea!

  • ace

    Thank you for the tips. I am reader of your blog since September last year, thank you for this site. It help me a lot in starting investing in foreclosed property. I already acquired a lot from bank. More power to you. cheers.

    • http://www.foreclosurephilippines.com Jay Castillo

      Wow, congratulations Ace! Good luck and may God bless you more!

  • Daryl_tagumpay

    In my excitement to start being a real estate investor, I bought a pre-selling property before getting advice from those who have been there before me.  It’s now 5 months delayed from the promised completion so the little money that I have is tied up in this.  

    I have been looking for properties to buy away from where I live.  I should have used the money to improve the rental property that I got for free.   It’s located in the same town where I live and surrounded by a public elementary school, town plaza, Regional Trial Court, our town’s Municipal Hall, and Catholic Church.

    • http://www.foreclosurephilippines.com Jay Castillo

      Hi Daryl,

      I hope the condo will get completed soon, and I hope it will become a real income generating asset! At least it remains to be a tangible investment, unlike other forms of investments that can disappear without a Trace (if you get what I mean…).

      Sounds like you already have a very promising rental property where you live! I suggest you go ahead and start improving it, and turn it into a real income generating property!

      Good luck!

  • JR Rosales

    This is a nice tip for the new year! :) 

    May pinagagawa po kami ng asawa ko na duplex sa lupa ng parents ko sa probinsya. Balak po namin paupahan ito. Kung sakali na kumikita naman ang duplex at may pondo pa kami ay balak naman po namin magpatayo ng commercial building, sa probinsya rin. Interesado rin po ako sa pagbili ng foreclosed properties pero parang mahirap sa ngayon kasi pareho kami nasa abroad ni mister. Please keep the tips coming, thanks. :)

    • http://www.foreclosurephilippines.com Jay Castillo

      Thanks JR for sharing, maganda yan! Balitaan mo kami sa progress, thanks!

  • Jason

    Hi

    Are there any clubs which you would recommend? As a newbie, i dont know if there are any clubs even here in metro manila.

    • http://www.foreclosurephilippines.com Jay Castillo

      Hi Jason,

      Personally, I have been part of at least 3 real estate investing clubs, but all of them no longer exist. 

      The first was the “cashflow group” where “fallen guru” Dinna Revilla used to share how-to’s with those present, and sometimes she even gets apprentices. I learned about this from the Think Rich Pinoy attendees googlegroups. meetings were held at the Charter House in Makati, and then later at Starbucks Waltermart or Amici, both of which are near Don Bosco Makati. The group no longer met when news about Dinna’s bouncing checks broke out. 

      The second “club” I joined was the meetup group of Doctor Jon Abaquin (who was also in the book Think Rich Pinoy). After the Dinna Revilla fiasco, I was glad I got back into real estate investing through Jon who has an unblemished integrity. However, the meetup group also ended. This was the group I mentioned in this post: http://www.foreclosurephilippines.com/2008/12/ofws-back-for-good-through-foreclosures.html

      The third and last club I became part of was the Think Rich Pinoy Club Marikina which was formed by Thea Santos, a Think Rich Pinoy franchisee. This club also ceased to exist when everything was ported into the TRP Silver and Gold membership site, but Thea and other club members remain friends and business partners up to this very day!

      What I suggest would be for you to create your own club or group or network, whatever you call it does not really matter. As long as you have a group of like minded individuals who support each other in their prospective real estate deals. (FYI, I might setup an area in foreclosurephilippines.com that can be used by people to form groups per area but I will probably do that after I finish other projects I have already started and are long overdue.)

      Good luck!