Foreclosure Investing Philippines » Real Estate Investing

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

Jay Castillo — Wed, 04 Jan 2012 04:50:09 +0000

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.

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

Full disclosure: Nothing to disclose.

Photo credit: pobre.ch, on Flickr

7 tips to help you get you started with real estate investing is a post from: Foreclosure Investing Philippines

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Goodbye and thank you 2011! Hello 2012!

Jay Castillo — Sun, 01 Jan 2012 19:50:33 +0000

Goodbye 2011 and thank you 2011, Hello 2012!

Whew, we made it through 2011, and now we start anew! Thank God we made it through! 2011 was truly an awesome year. But before we move on to 2012 I would like to look back at the year that was. May we not forget the challenges we faced, the lessons we have learned, the blessings that came our way, and all of the things we are thankful for in 2011. Let us look back at 2011 one last time…

My favorite articles from 2011

Here’s a list of just some of my favorite articles I wrote in 2011, just in case you missed any of them.

5 things real estate investors need to succeed and stay successful - I wrote this last May as a reaction to disturbing observations I had back then. I can still remember a lot of people asking me why I was writing about such things…

“The reason I must be rich is because I have kids” – a Father’s Day reflection - This one is very close to my heart. Yes, we all want to become successful real estate investors, but we should never forget that this should be for the right reasons and we should also stop playing the blame game.

7 questions you need to ask to avoid investment scams - My goal was to create an objective checklist and give some pointers to those who might be thinking of investing their hard earned money. I just wish I had written this sooner.

Are you violating the RESA Law? - This is an offshoot of one of the comments from the article above. It seems people are being asked to do things which might be illegal. This article aims to remind people to stay out of trouble.

The “aha!” moment that made me decide to take action towards financial freedom - Want to learn what pushed me to take action? Read this and don’t forget to read the comments as well, where other mentors of mine shared their own “aha!” moments!

“The greatest wealth is health” - I wrote this after I was reminded of a very important lesson. Sometimes we forget that all of this is pointless if we neglect something as important as our health.

My “dream” team was born

One of the highlights of 2011 was when my wife Cherry took the March 2011 real estate brokers exam. Not only did she pass, she also made it to the top 10 and ranked fourth place! Actually, I never thought she would ever be involved with real estate. I guess there really is a time for everything. Even with real estate, we are now a team! Yes, my “dream” team was born in 2011!

Real estate brokers exam results in a lot of frustrated examinees

Speaking of the March 2011 brokers exam, I believe it resulted in a lot of frustrated and disappointed examinees (even those who passed had these sentiments). The keyword here is “Ecology“. I just hope that the coming March 2012 real estate brokers exam results in a lot of happy new real estate brokers this time around!

We were a finalist in the 2011 Philippine Blog awards

Foreclosure Investing Philippines made it as one of the finalists in the Philippine Blog awards 2011, Business Category – National Level. Although we did not win, I it was still quite an honor to be included in the list of finalists that included Ready to be Rich, Business Tips Philippines, The Products Blog, and The Sagada Lemon Pie House. By the way, I would like to congratulate Fitz Villafuerte of Ready to be Rich for the much deserved win. I hope to reach the finals again next year!

Media exposure

2011 was also an exciting year because I got some unexpected exposure from various media. These really made 2011 more memorable for me:

I became a studio guest at DZMM TeleRadyo’s Trabaho Panalo program last February 20 and August 7 where I discussed about blogging.

That's me with Jasmin Romero of DZMM TeleRadyo'sTrabaho Panalo

I was interviewed by John Calub and Cheska San Diego for Success TV last March 25, 2011 and shared info about investing in foreclosed properties.

That's me with John Calub and Cheska San Diego of Success TV

I was invited by Liza Gaspar in Ka Mentong Laurel’s Radyo OpinYon show on 1098AM where I also met Ka Linggoy!
My article on Low Home Loan Rates was featured in Philippine Star last September 21, 2011.
I was also a guest speaker at a lot of seminars and workshops which includes the Money Summit and Wealth Expo 2011, Internet Marketing for Real Estate Agents Developers and Investors (IMREADI), the PayPal 101 workshop last November with Eireen Diokno-Bernardo, the Think Rich Pinoy Seminars conducted all throughout the year, and other real estate seminars.

Thanks a lot guys for having me!

2011 was also a time to move on…

It was a year when I finally disengaged from certain people I don’t want to do business with. Let’s just say it was all about principles which are very important for me. It seems some people don’t share this point of view. A good friend of mine said it was a moral responsibility for those who knew what was going on. She was right, and so I did what I had to do. Enough said, let us all move on.

It was also an overwhelming 2011…

2011 marked another year of growth for foreclosurephilippines.com in terms of traffic, as it grew be more than 54% compared to 2010. Don’t get me wrong, I’m not complaining! In fact I’m very happy and grateful to all of the readers and subscribers of this blog. But it did cause some issues that I had to address.

I was worried that my web hosting account would be suspended for using more server resources than what was allowed. Because of that, I had to move this blog to a new web host last March, just to make sure the blog can withstand additional traffic. I moved from Hostgator to Dreamhost and things looked pretty okay at the start.

Later on however, I noticed that during peak hours, the blog became offline at times, and it was most probably because the site had already outgrown shared web hosting, and I had to upgrade to a Virtual Private Server (VPS) with more server resources. The VPS I got that could cope with the incoming traffic costs 6 times as much as my old hosting account, but it has been stable ever since and was well worth it. To offset the additional cost, I have also started to accept direct advertisements on this blog (Click here if you want to advertise at foreclosurephilippines.com!).

To avoid the need for additional upgrades, I also optimized the site by purchasing and installing Thesis which is a premium wordpress theme that not only gave the site a more professional look with far less coding (this saved a lot of my time!), it also enhanced search engine optimization (SEO), reduced loadtime, and consumed less server resources. I also changed my wordpress caching plugin to W3 Total Cache, and installed Disqus to enhance the comments section.

I hope these things I did behind the scenes will allow the site to withstand the growing incoming traffic by at least another year so I can focus on finishing our other projects.

Other projects?

Yes, I am working on 7 other websites that I have yet to complete, although some are already online. My wife wife and I also have a lot of plans with regard to growing our real estate business in 2012. The coming year is really something to look forward to!

Thank you to all of you!

Thank you to my family! Thank you to my friends! Thank you to my internet marketing and real estate investing mentors and colleagues! Thank you to my business partners, clients, and service providers! Thank you to my fellow real estate investors, real estate brokers, and other real estate professionals! Thank you to all our readers and subscribers! Thank you to all the banks and all our sources of our real estate listings! Thanks be to God Almighty for all the blessings and opportunities and for making all of this possible!

Goodbye 2011, Hello 2012!

Wishing you all a Happy and Prosperous New Year!!!

~~~

To our success and financial freedom!

Jay Castillo

Full disclosure: Nothing to disclose.

Goodbye and thank you 2011! Hello 2012! is a post from: Foreclosure Investing Philippines

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No increase in real property taxes in Paranaque City for 2012

Jay Castillo — Thu, 29 Dec 2011 11:00:00 +0000

This is a follow up to my post about the possibility that Paranaque City will be adopting a revised schedule of values for real properties. It turns out that Paranaque City Ordinance No. 31-2011* was approved by the City Council and Paranaque Mayor Jun Bernabe last October 13, 2011, and was later published in the Philippine Star last October 25, 2011. The ordinance should take effect immediately after it’s publication.

However, the implementation of the newly approved ordinance, which would have resulted in higher real property taxes starting 2012 for Paranaque City residents, was stopped by the Supreme Court (SC) through a temporary restraining order or TRO. Yes, the TRO issued by the SC stopped the real property tax increase in Paranaque, at least for now.

*Click here to view the full text of the Paranaque City Ordinance No. 31 (Series of 2011) in PDF format

No real property tax increase in Paranaque

The TRO that stopped the real property tax increase in Paranaque City would best explain the notice below that would greet visitors of Paranaque City’s official website, as of December 2011:

Paranaque real property taxes have not been raised as can be seen when you visit http://www.paranaque.gov.ph/

As stated on the notice above, the prevailing fair market values of land remains at 1997 levels, while the valuation of buildings and other improvements stays at 1992 levels. In other words, there is no real property tax increase in Paranaque City, that is according to the notice above.

10% discount for prompt payment of real property taxes

Furthermore, the notice above also states that real property tax and business tax payers who pay their taxes promptly according to the schedule above will enjoy a 10% discount.

Actually, most Cities and Municipalities offer the same incentive for prompt payments of real property taxes ( I remember the discount in Marikina City was 20%, this was before Ondoy and we still lived in Marikina) so if you want to save on real property taxes, I suggest you check with your local government units before it’s too late.

Paranaque RPT Online Payment System is under maintenace

In related news, Paranaque’s Real Property Tax (RPT) Online Payment System, which allows taxpayers to pay through the internet without the need to go to the Paranaque City Hall, is currently under maintenance. This was posted on Paranaque City’s website, as of December 29, 2011.

~~~

To our success and financial freedom!

Jay Castillo

Full disclosure: Nothing to disclose.

No increase in real property taxes in Paranaque City for 2012 is a post from: Foreclosure Investing Philippines

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Learn “Best Practices” in setting up real estate websites at the PayPal 101 workshop on November 19, 2011

Jay Castillo — Mon, 14 Nov 2011 04:57:17 +0000

So you want to create your own real estate website? Let me help you get started.

I will be a guest trainer at the upcoming PayPal 101 Workshop on November 19, 2011 at the 18th floor, UnionBank Plaza, Meralco Avenue corner Onyx & Sapphire Streets, Ortigas Center, Pasig City, Philippines.

I look forward to sharing what I consider to be “best practices” in setting up real estate websites during the workshop.

What I shall cover during the workshop

Paypal 101 Workshop on November 19 2011(outline of topics for Jay Castillo's talk) - Right click to save or click to view

I will be using www.foreclosurephilippines.com and a couple of other websites we own as case studies. Obviously, I won’t be discussing “theory”. I will be sharing information on what has actually worked and continues to work for me, and how you can apply these to your own real estate websites.

I will also discuss things you should avoid!

By the way due to limited time, I will not be able to discuss “all” the “best practices” for setting up your real estate websites, I will just discuss the most important that I can fit in an hour. One more thing, I believe that most of the things I will discuss are also applicable to other niches!

I will also give short tutorials on a couple of tools I use which I hope attendees would really apply to their own websites. If you bring your own laptops and internet connection (just in case the wifi at the workshop venue becomes overloaded or enounters any problems), you can even follow along my tutorial and implement what I am teaching during the class.

Of course, I will also share info on why I use PayPal with my website and I will also share tips on how to keep your PayPal account secure.

Reminders:

This workshop is not for free, there is a very minimal participation fee of Php800/person.
To attend the workshop, you need to have a PREMIER or MERCHANT PayPal account. No PayPal account? Don’t worry, it’s completely free to sign up for a PayPal account! To sign up or learn more, click here: https://www.paypal.com/ph/mrb/pal=V5NBQFDXCU9D2

Get more info or to sign-up

To get more info and reserve your seat(s) for the PayPal 101 workshop on November 19, please checkout this link: http://www.sendmaillogistic.com

Thanks again to my good friend and eBay power seller Eireen Diokno-Bernardo for inviting me to speak. It is truly a great honor!

Eireen will be the head trainer for the PayPal 101 workshop. She is a recognized eBay and PayPal E-Commerce Education Specialist for Southeast Asia. She is also recommended by Jim Griffith, the Dean of eBay University in the U.S. as an eBay Education Specialist for worldwide online trading in the Philippines. She has been endorsed by UnionBank for E-Commerce and E-Learning. Eireen also runs several top rated power seller eBay stores.

I hope to see you there!

Happy learning!

~~~

To our success and financial freedom!

Jay Castillo

Full disclosure: Each time a new merchant signs up for a PayPal Business or Premier account via the link or banner provide above, I will be eligible for a Merchant Referral Bonus.

Learn “Best Practices” in setting up real estate websites at the PayPal 101 workshop on November 19, 2011 is a post from: Foreclosure Investing Philippines

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Why Property is a Safe Investment

Jay Castillo — Sun, 09 Oct 2011 15:59:29 +0000

A guest post by Tom Mallet

When looking to turn your earnings or profits into a larger income there are many options available to you. Rather than spend your income on flashy cars, it is wise to invest in property because it is both stable and reliable. Whilst other investments will give you greater short term returns, they have a greater element of risk involved which could end up costing you everything you invested.

The property market in Australia is relatively stable (just like in the Philippines – by Jay Castillo) and whilst it is seeing a current dip the trend has been upwards over the last 5 years. Given the rate at which the population is increasing in Australia and the amount of housing being built by the government and by businesses, the cost of property is set to increase for years to come making it a worthwhile investment.

This short guide will provide you with some reasons why buying an investment property will offer you large returns over the long term without the risk of stock trading.

1. Large investments

One of the biggest benefits to buying a house is the fact that you can almost always borrow money with which to do it. When trading on the stock market or investing in any kind of trade, you will not be able to do so. This means that you can make a much larger investment than you actually have the capital for.

When taking out a mortgage to buy a house you will be able to place a relatively small deposit and borrow the rest against the property you wish to purchase. This means that your risk can be limited to losing only a fraction of the actual investment that you make if you are unable to meet the mortgage repayments for any reason.

2. Off plan property

One method of investment which can see a high rate of return over a short period of time is buying investment property off the plan. What this means is that you are purchasing a building or apartment which has not yet been built.This practice is carried out because it benefits the developers who can secure funds with which to build before they start constructing anything, limiting their risk.

This practice also benefits a buyer who can purchase an apartment in a prime location for a reduced price. Once the building is complete you will have the choice of renting or of selling the property immediately to make a fast return on your investment.

3. Growing investment

By purchasing property for investment purposes you will be able to watch your investment grow over time. If you are renting the property to tenants then they will be paying the interest on the mortgage for you in effect. If you decide to live in the property then the monthly bills you pay will be going towards your ownership of the house, rather than into someone else’s pocket.

Investment of this kind enables you to accrue wealth in the form of bricks and mortar which are both safe and stable. You will always be in control of your investment and won’t be susceptible to large fluctuations in the market as you would with stock trading.

About the author: Tom Mallet is an Australian freelance writer and journalist. He writes extensively in Australia, Canada, Europe, and the US. He’s published more than 500 articles about various topics, including investment property and investment property off the plan.

A note from Jay Castillo

I can’t help but think that what they refer to in Australia as “off plan property“, is what we call here in the Philippines as pre-selling properties. For me, buying pre-selling properties is okay as long as they are from reputable developers who have a track record that they can deliver their projects on time, at agreed specifications. It also doesn’t hurt if the downpayment is spread up to the turn-over date at zero interest.

As for leverage and growth, these are definitely applicable in the Philippines as well.

Thanks again to Tom Mallet for his guest post.

If you want to get featured here through a guest post, and as long as you can provide valuable information to our readers and subscribers out there, just let me know through the comments section below so I can send you the draft guidelines which will be made public soon.

Yes, I am opening up this blog to guest posts soon!

~~~

To our success and financial freedom!

Jay Castillo

Real Estate Investor
PRC Real Estate Broker Registration 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

Full disclosure: Nothing to disclose.

P.S. I am helping a fellow real estate investor market a Quezon City Townhouse for sale located in Kamuning. This is also available through a rent-to-own scheme. Please call/txt 09157603090/5059259 for more details. A video of the townhouse can be seen below. Click here for more details.

Why Property is a Safe Investment is a post from: Foreclosure Investing Philippines

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Watch out for floodlines when inspecting foreclosed properties!

Jay Castillo — Mon, 26 Sep 2011 04:30:03 +0000

I visited the Registry of Deeds in Binangonan a couple of weeks ago and on my way there, I noticed something that every real estate investor or anyone buying a property should watch out for as part of due diligence, BEFORE buying a property in any area – floodlines!

Floodlines are the stains that remain on the walls, fences, gates, etc., after an area gets flooded. It can mean an area is flood-prone and can be a sign of things to come, unless something concrete was done to prevent future flooding.

I’ll let the pictures do the talking

How about the graffiti or “art work”? Those are things you should also avoid, but that’s another story!

These may look like ordinary pictures of floodlines. However, these were the same floodlines I saw in the same area in Pasig just after Ondoy. Yes, the floodlines caused by Ondoy exactly 2 years ago as pictured above are still very visible.

Where do you look for floodlines?

Obviously, you won’t see any floodlines if a property’s walls, fences, gates, etc. got repainted or cleaned up already. So you should look for them at the following:

Concrete walls, fences, of VACANT LOTS. Those that have rough surfaces that would retain the dirt and mud after a flood has receded would be a good place to start.
Unoccupied properties. Since these are unoccupied, it is less likely that they are maintained, hence you will see the floodlines, even after several years have passed.
Public or private properties that are not well maintained. Just look at the pictures above!

What if you don’t see any floodlines?

If you don’t see any floodlines, you should still ask around the area. For sure you will find people who are more than willing to share their flood-related stories. Check out sari-sari stores, barangay halls, or even the property owners in the same street or area.

While banks will disclose any info they have with regard to flooding, don’t rely solely on them or their caretaker who lives in the foreclosed property as they might not know exactly how high the flood was, if any, or they may simply not know if it was indeed flooded.

For FSBO (for sale by owner) properties, the seller might be hesitant to disclose any information with regard to flooding, as it might make you lose interest on their property. Just ask anyway and confirm by asking others who live in the same area, as mentioned above.

Online resources for flooding in the Philippines

You can also check out the following online resources with regard to flooding in the Philippines.

Typhoon Ondoy Maximum Flood Height interactive map

Typhoon Ondoy Maximum Flood Height interactive map(Click to visit)

Map of Potential Flooding in Philippines - http://globalfloodmap.org/Philippines

Philippine flood hazard maps - http://www.nababaha.com

A solution to flooding in Metro Manila?

Has the MMDA found the ultimate solution to the flooding problem in Metro Manila? Check out the picture below and tell me what you think!

If you know other resources that can help determine if an area is flood-prone, or if you have more pictures of floodlines here in the Philippines, please share them here by leaving a comment below. Thanks!

~~~

To our success and financial freedom!

Jay Castillo

Full disclosure: Nothing to disclose.

Watch out for floodlines when inspecting foreclosed properties! is a post from: Foreclosure Investing Philippines

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What happens when you put your own property up for auction?

Jay Castillo — Wed, 21 Sep 2011 12:30:11 +0000

This is a guest post by Tom Mallet.

Sometimes you will come across real estate agents that are keen to take your house to auction. They may see that your home is quite special and has the potential to ignite excitement leading up to the auction, therefore possibly driving the sale price as high as possible. It is also a good way to almost guarantee a sale on a set date, so for anyone that needs to sell fast it is a great option. Also, because you are setting the reserve price, you know that if it does sell you will get the minimum price that you are looking for.

To go to auction, you will need to select an auctioneer. When looking at auctioneers, make sure they are fully qualified for the job and also check their credentials and how successful past auctions have been for them. If you have time, find out when one of their auctions is on so you can go along and see what they are like in action and if they get the crowd motivated to bid.

Make sure you select your auctioneer carefully and are happy with them before you sign an agreement, as once that is signed it is legally binding and you are not able to break the contract if you are unhappy with the services the auctioneer is providing.

As with other house sales, your agent will do a marketing campaign to ramp up interest in the home before auction date. There will be inspections and open house days to give people a chance to inspect it thoroughly and decide if they want to bid once the auction day approaches. Sometimes a house will go to auction only after a lot of interest is generated in the property.

On the day of the auction the agent will open the house again for one last look. It is at this stage the bidders can register to be included in the auction.

The agent will make sure there is information about the property accessible to the potential bidders on the day. Before the auction starts, the auctioneer will need to answer any questions people may have about the property and they will also have to read out the rules and laws that govern an auction. This way everyone understands the rules of the day before going into a financial commitment.

Now it is time to start the auction. The auctioneer will set the opening bid and will let bidders know what increments they can raise their bids by. This might be increments of $5,000 but if someone puts in a bid that is only $2,000 it is the auctioneers discretion on whether they will accept this or not. They will often decide based on the hype and speed of the auction at the time.

It is only after the house reaches the reserve price that it is ‘on the market’ and it will now be sold to the highest bidder. If it doesn’t hit the reserve price, the auctioneer will check with the seller if they want to proceed with the sale at the lower price or stop the auction – the seller is not obliged to sell at a lower price.

Once the auctioneer has said SOLD the highest bidder needs to put down a deposit on the house on the spot, usually up to 10% of the value.

However the property is not considered sold until both the seller and the buyer have signed contracts, the final checks have been done and the rest of the payment has been made. It is after these final checks and transfers that you and your real estate agents in Melbourne (or wherever you are in Australia) can toast your success!

A note from Jay Castillo

I would like to thank Tom for his guest post which makes me wonder if property owners in the Philippines can sell their properties through property auctions just like they do in Melbourne. Very interesting right?

While property auctions are regularly being conducted by banks for their foreclosed properties, do you think this is also possible for property owners in the Philippines ?

Let me know what you think by leaving a comment below. Thanks!

~~~

To our success and financial freedom!

Jay Castillo

Full disclosure: Nothing to disclose.

What happens when you put your own property up for auction? is a post from: Foreclosure Investing Philippines

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Paranaque adopting revised schedules of real property values?

Jay Castillo — Tue, 13 Sep 2011 13:15:29 +0000

I spotted this tarpaulin along Sucat Road across Duty Free Philippines and I thought Paranaque residents might want to check this out. The tarp says a public hearing on “Adopting the revised schedule of values of real property in the City of Paranaque” will be conducted from September 12-15, 2011.

I’m not really sure if this has anything to do with the Bureau of Internal Revenue (BIR). If you will recall, the BIR started to update real property zonal values nationwide more than a year ago. I do believe this will have an effect on Paranaque zonal values and real property taxes.

Anyway, I have posted below the contents of the Notice of Public Hearing which can be seen in the picture above.

Notice of Public Hearing

What: Public hearing by the Committee on Ways and Means on Draft Ordinance No. 031 entitled:

“Adopting the revised schedule of values of real property in the city of Paranaque”

Where: San Antonio Gym

When:

September 12, 2011

9AM Barangay San Antonio/Barangay Sun Valley
2PM Barangay Moonwalk/barangay Marcelo Green

September 13, 2011

9AM barangay Don Bosco/Barangay Merville/Barangay San Martin De Porres
2PM Barangay BF

September 14, 2011

9AM Barangay Baclaran/Barangay Santo Nino
2PM Barangay San Dionisio

September 15, 2011

9AM Barangay Tambo, Barangay Don Galo, Barangay La Huerta, Barangay Vitalez
2PM Barangay San Isidro

Why bother attending the public hearing?

If you have properties in Paranaque, you might want to check this out to see how the revised schedule of real property values might affect you. This is your chance to participate and let your voice be heard.

For example, if the real property values are raised, this would lead to a corresponding increase in real property taxes.

I just hope the revised property values would be close to actual market values of the properties in Paranaque.

If you are able to attend any of these hearings, please do leave a comment below to share what may have transpired. Thanks!

~~~

To our success and financial freedom!

Jay Castillo

Full disclosure: Nothing to disclose.

P.S. A friend of mine will be having an OPEN HOUSE of their Rent-to-own Townhouse in Kamuning, Quezon City this coming Saturday, Sept 17, 2011, from 10am to 2pm. A special discount awaits the buyer who closes the deal during the open house. You may also bring your friends or other people you want to refer. Broker/agents are very welcome. Please call/txt 09157603090/5059259 to register your name/friends/broker/prospect buyers to avail the special discount. Click here to view property details, more pictures, and video.

Paranaque adopting revised schedules of real property values? is a post from: Foreclosure Investing Philippines

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Which way to make money in real estate would you recommend?

Jay Castillo — Thu, 11 Aug 2011 03:30:21 +0000

This is Part 2 of a series about the questions that were asked during a panel discussion in the recent Manila leg of the Money Summit and Wealth Expo 2011. This post tackles the question on which way to make money in real estate is recommended. If you missed Part 1 of this series, you can check it out here: The “aha!” moment that made me decide to take action towards financial freedom. Don’t forget to read the comments section where people already shared some very inspiring “aha!” moments of their own.

We now move on to the next question

This was also asked during the Money Summit and Wealth Expo 2011:

“There are different ways to make money in real estate like brokering, flipping, rentals, rent-to-own, buy and hold etc. Which would you recommend and why?”

Here’s my answer:

“If you have limited funds, maybe you can start with brokering, of course you need to be a licensed broker. If you are not yet a licensed broker, you can work with a broker, you can become an agent, but still you have to be registered by the broker with the PRC, you have to comply with the RESA Law. But you don’t need any capital, you just need to work hard, just like in any other field.

If you want long term wealth, rentals or even rent-to-own would be fine. However, I noticed that with rent-to-own properties, it is finite. Once the tenant-buyer pays in cash, you will no longer have any cashflow.

For rentals, it is continuous. Since I won’t give the tenant an option to buy, since it is purely rentals, I won’t lose my cashflow down the road. For long term wealth, I would recommend rentals.”

More insights…

On becoming an agent

When you work with a licensed broker as an agent, this means you will be a licensed real estate salesperson who is registered under that real estate broker.

Section 3 (g)-5 of the RESA Law Implementing Rules and Regulations has a definition for Real estate salespersons as follows

“(5) Real estate salesperson – a duly accredited natural person who performs service for, and in behalf of a real estate broker who is registered and licensed by the Professional Regulatory Board of Real Estate Service for or in expectation of a share in the commission, professional fee, compensation or other valuable consideration.”

The full text of the RESA Law IRR can be found here.

Whether you are a real estate broker or a real estate salesperson, you need to work hard, even if technically you do not need capital to acquire properties to sell or rent out. You still need to build your network, build your buyers and sellers database, you need to market properties well, you need to be a able to find properties that match the requirements of your buyers, etc., along with all the other duties and responsibilities of being a real estate broker or salesperon.

Obviously, this entails a lot of hard work, but it can be the start of something big!

It can be done!

I once met someone who used to work for a government agency and his salary was just a bit higher than minimum wage. He told me that he realized back then that even if he combined his salary with the salary of his wife (who was also working with a government agency), they would never have had enough money to buy their own home, no matter how hard they tried to save.

One day however, a friend of his who worked for a real estate company invited him to work as an agent as his “sideline”. With patience and hard work, he eventually bagged his first sale. This made him realize that real estate can really be a better way to earn money. According to him, this happened decades ago.

Fast forward to present day, he already has his own real estate company which according to him is one of the top sellers of a big developer and they also handle the selling of their repossessed properties. (I met him when I checked out some of these repossessed properties).

Yes it can be done!

More on rent-to-own

Yes, you do get your profits early in the form of capital gains if your tenant-buyer decides to pay in full in advance either through cash or through a loan take out. Don’t get me wrong, I’m not saying this is not good. Personally however, I would prefer long term cashflow over capital gains.

For example, in one of my deals, my passive income and cashflow stopped when my tenant-buyer decided to take-out a loan with Pag-IBIG which they used to pay me in full. Now I need to find another deal to replace the passive income that I had before from this particular deal.

Even if the tenant-buyer decides not to pay in full in advance, and decides to finish the whole rent-to-own term, your cashflow will still end, when it is fully paid. In the end, you won’t have an asset because that asset is no longer yours. It’s like flipping properties on installment.

Still, rent-to-own has its advantages like less property management hassles, and the monthly payments can be bigger which can translate to more positive cashflow and passive income, as mentioned here. You just need to ensure that you have more properties in the pipeline to sustain your cashflow.

How about buy and hold?

If you want to learn more about my thoughts about buy and hold, please checkout what I have previously written about it in my article entitled 9 ways to invest in foreclosures and earn money.

Up next

In the next part of this series, let me share my answer and additional thoughts about the question “Why choose real estate?”. See you next week.

In the meantime, what are your thoughts on becoming a real estate broker or agent?

Would you rather go for flipping, rent-to-own, or rentals?

Please share your thoughts by leaving a comment below. Thanks!

~~~

Photo credit: WoodlyWonderWorks via Flickr

~~~

To our success and financial freedom!

Jay Castillo

Full disclosure: Nothing to disclose.

Which way to make money in real estate would you recommend? is a post from: Foreclosure Investing Philippines

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4 tips when negotiating with banks

ronaldcagape — Wed, 03 Aug 2011 03:00:05 +0000

This is a guest post by Ronald Cagape of Living Cashflow 101.

Negotiating with banks for their foreclosed assets can be scary and intimidating when you haven’t done it.

We always have this image in our mind that bankers are snobbish people who look at you from head to toe and make a quick evaluation if you have money or not. That image may have been true in the past but competition has driven banks to become better at customer service and thus be nicer to prospective customers.

Since you are a prospective buyer of real estate, they will also be nicer to you.

Here are some tips when negotiating with banks especially if you feel that you have zero negotiating skills.

Start with the smaller banks. It can really be intimidating to negotiate with the big banks like Metrobank or BDO but the smaller ones are manageable. Usually, you will talk with account officers first. You don’t need to make an offer right away. Establish rapport first with the officer. Get to know their inventory and their processes.
Learn how to write an offer. An offer is not just a document where you put your price and terms. Make a cover letter for the offer that explains the rationale for your price. When we bought from a bank, we wrote in our cover letter that the property needed massive repairs and the location was not desirable because of squatters in the area. That set them up for the low-ball offer that we were about to give. When you make the offer, it should be something that they will refuse. That’s right, they are supposed to reject your first offer. If they accept it right away, then your offer was too high.
If you don’t want to negotiate in person because you are too afraid then use a fax machine. Fax your offer then follow-up on the phone. Let your offer do the talking. Make sure to appear though when the bank accepts your offer.
Make a lot of offers. When they reject your first offer, ask for a counter-offer. If they move in price then you know that they are willing to negotiate. If not, fax the offer next month or 3 months from now if the property is still for sale.

Negotiating with banks need not be a terrifying experience. Get over the fear and start faxing your offers.

Photo credits: LuMaxArt

About The Author: Ronald Cagape is a real estate broker and investor. He teaches investing through the Cashflow 101 Game.

4 tips when negotiating with banks is a post from: Foreclosure Investing Philippines

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