Lessons learned by a real estate broker, homeowner, and investor from Provident Village

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This is the second part in my series on the reflections of a real estate investor(that would be me!) after Typhoon Ondoy’s wrath. If you missed the first part, you may want to read it before reading this. You can find part one here – Reflections of a Real Estate Investor: Ondoy’s aftermath

Next I try to share what I’ve learned and become aware of as a licensed real estate broker, homeowner, and as a real estate investor in Provident Village, Marikina City, Philippines. Here goes…

Bangon-Marikina-Kaya-Natin-ItoThis banner was placed on a wall at the entrance of Provident Village, Marikina City

Yes, I know we can!

Last Monday, I went back to Provident Village to see the situation and to check if we can already go back to our house to try to salvage what can be salvaged and assess the extent of the damage. As I turned right to the entrance of Provident Village, I saw the banner above and  tears rolled down my face immediately. No, they were not tears of despair but rather tears of hope. The banner reads “Bangon Marikina, kaya natin ito (Get up Marikina, we can do this!)”. I say yes, I know we  can!

I was also pleasantly surprised that there were a lot of bulldozers and trucks that were being used for the clearing up operations. Last Monday, the front of our house was still full of mud and debris which made it not passable to small cars like my Hyundai Getz but I can see that our entire street will be cleared before the end of this week.

Suggestions from Mayor MCF

After a quick visit to Provident Village, I then proceeded to the Marikina City Hall to attend a meeting between Mayor Marides C. Fernando (also known as MCF to her constituents in Marikina City) and the Real Estate Brokers Association of the Philippines – Marikina River City Inc. (REBAP-MRCI) chapter which I was a member of.

PA121253REBAP-MRCI President Malou Llado(left) speaks as MCF(center) and other REBAP-MRCI members listen
Meeting adjourned. I'm the guy in the middle, with glasses. Meeting adjourned. I’m the guy at the back but in the middle of the picture, with glasses.

As real estate brokers (and also as a real estate investor in my case), members of REBAP-MRCI wanted to know how we could help the Marikina City Government after the City of Marikina was badly hit by Typhoon Ondoy. We were also interested in finding out what plans the Marikina City Government had for Marikina after the devastation. Obviously, the floods will have a big impact on property prices and demand for such, which in turn would affect the livelihood of real estate brokers that focus on the City of Marikina. I’ll try to summarize what I learned from the meeting below:

  1. MCF suggested that houses in those areas that experienced very high floods should seriously consider using their first floors exclusively for garage or parking purposes and houses should at least have a second floor. A roof deck is highly recommended. It would be more like a house built on stilts.  I personally have thought of the same in case we do decide to push through with plans to have a major renovation done on our house. More on this later.
  2. During the conversation, one member of REBAP-MRCI asked if there were any plans to put up more water pumping stations in Marikina. MCF answered with another question, “Where would the flood waters be pumped to?” I guess the real problem is that the flood waters are not really from Marikina itself but rather from the surrounding areas. That’s the problem with being a valley.
  3. With regard to reports that some homeowners are selling their houses at ridiculously low prices and yet still have no interested buyers, MCF advised us that maybe we can find opportunities there. Of  course as licensed brokers we may help those that want to sell and also help find houses for sale for real estate investors.
  4. Another suggestion from MCF was to use low lying areas exclusively for non-residential purposes which are okay to get submerged by flood waters.

Our meeting got cut short because of an unplanned but very welcome healing mass with healing priest Father Suarez which was just about to start at the Marikina City Hall. The meeting was adjourned and  we just attended  the mass. This was just what we all needed, healing!

Father Suarez during the healing massFather Suarez during the healing mass at the Marikina City hall

Lessons learned and observations of a homeowner in Provident Village

1. Always have your house insured with coverage for Acts of God. Though a lot of people have said that what had happened was actually an act of man(ex. the alleged releasing of water from dams, climate change, etc.), it would not hurt to have Acts of God coverage. The higher premiums would have been well worth it. Unfortunately, our house only had fire insurance. I’m quite certain insurance premiums would sky rocket after the floods and I also won’t be surprised if insurance companies would start refusing to give such coverage to areas hit by the floods.

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2. Houses should be built like houses on stilts. In this configuration, the ground floor would be just a wide open space that can serve as parking or a basketball court, etc.  At the very minimum, houses should have a second floor that has an exit that won’t be hampered by flood waters (more on this below). There were a lot of reports of people being trapped at their second floors and they only got out by destroying the ceiling and the roof.

3. Functionality of doors and windows and their locks should not be affected by flood waters. One thing in common I found with most houses that got submerged by the floods was the doors and windows(including fire escapes) could not easily be opened. Either the door mechanisms/padlocks got jammed or the wood of the door itself expanded and got stuck with the door jamb. I’m not sure if there are water resistant door mechanisms and locks out there but I guess keeping them well lubricated would help. As for doors, I guess using high quality wood would help prevent the “pamamaga(expanding)”. Obviously, if the rising water had force and pressure, this would also hamper opening them.

4. Have rubber boats, air-beds, life-jackets, life-savers or inner tubes, or any acceptable “floatation” device handy. These would at least give you a fighting chance in case you needed to move to higher ground. When my son and Emily, his nanny, eventually had to transfer from roof-to-roof to reach the 3-story apartment building a house away, they used an air-bed from one of our neighbors. I’m so thankful for the courage and quick thinking of Emily, and Edgar, one of our neighbors. It turns out Edgar was a ship captain and was prepared for such situations. Thank God!

5. Have some sort of alerting mechanism in place that would warn against floods, etc. Here in the office, I implemented an automated monitoring system on critical servers which automatically sends SMS alerts which I receive on my cellphone in case conditions that can lead to problems occur. For example, if the free space on the system drive of our e-mail server goes below a threshold we have set, all concerned I.T. staff including myself will receive an alert through a text message. I just wish that someone can come up with a similar system that would alert the City Government just in case an unusually high amount of rain fall occurs or if flood waters or water released from dams  are detected from surrounding areas that would eventually end up in Marikina City.  The City government can then alert residents or even evacuate them. Maybe I should forward this idea to PAGASA, they already have equipment that measure rainfall right?

6. The flood receded very fast so the problem is really with the source of the floods. Would you believe that the flood that reached levels as high as the ceilings of the second floor of houses in Provident Village receded by the next day? Yes, it receded that fast. In fairness to the efforts of the Marikina Government, I believe that the drainage systems are functioning as they should, but it just so happened that the flood waters, wherever it came from, was just too much. What if there was a way to at least control the source of the floods? Another  challenge, how can the drainage systems be cleaned of the mud (that will eventually harden) left behind by the flood waters?

7. Just sell the house and live in a flood free area! I know a lot of you have this in mind just like me. This would be the ultimate solution for me and my family unless someone finds a permanent solution that would result in a flood free Provident Village. I just wish selling the house would be easy. We could then move to another place in Marikina that was not affected by the floods. In case I decide to, I would have to wait for the village to be cleared of all the mud and debris before I can sell the house. Let’s wait and see…

Points to ponder from the point of view of a real estate investor

1. Do I renovate the house and construct a second floor and a roof deck or do I repair the house at its present configuration (our house is just a bungalow)? The obvious things I should consider would be the cost involved and if these can be recovered if I have our house rented out or sold down the road. For the same cost of constructing a second floor plus roofdeck, I could already have a new house constructed somewhere else that is flood free, which I can definitely sell for a profit or rent with positive cashflow in the future.

2. Do I sell the house now (after doing some repairs to make it ready for occupancy) or wait for property prices to stabilize after a few years? As mentioned above, property prices in Marikina have surely been affected by the recent floods. Demand is also very low while supply is very high as I’m sure a lot of homeowners already have their Provident Village houses for sale while there are very few people interested in buying properties in areas affected by the floods(except maybe for investors). If I decide not sell the house now, I should be able able to find tenants to at least cover part of the monthly amortizations for our house.

3. As an investor, I really should avoid flood prone areas! I’m just lucky that all of my investment properties were not affected by the floods and only my primary residence was hit. Just the same, I should also treat my home as an investment as I have mentioned in my recent post:  Why not treat your first home as a real estate investment?. As early as now, the implications I see are getting a negative cashflow if I do decide to have our house rented out, the difficulty of finding tenants/buyers for a bungalow in the middle of  Provident Village, the time it would take for the clearing up operations to finish(I estimate this to finish around Christmas time), and more importantly, the safety of those who would be living in our house.

What do you think?

To be continued…

*Photos of MCF and Father Suarez are courtesy of Cora Uy of REBAP-MRCI: http://www.rebapmarikina.com

**I would also like to thank all REBAP-MRCI and REBAP-QC members for the relief goods given to fellow REBAP members affected by the floods, including me and my family.

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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 quit his job as an I.T. Manager to focus on Real Estate Investing and Internet Marketing. He is a PRC licensed Real Estate Broker (REB License # 3194)... [Read more]

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  • senn

    hello mr. jay! hope your ok now. gaya ng sinabi sa banner, kaya mong bumangon. anyway, interesado sana akong mag rent dyan sa provident. yung malapit lang sa may main road at may entrance. at least 3 bedrooms with 2 baths. ang budget ko ay P10k-12k lang. thanks.

  • randolf

    good day jay bago lang ako dto sa site interesado ako sa mga topic binabanggit nyo,mayroon ba kayo mentoring program tungkol sa real estate investing.thanks and more power.

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

      Hi randolf, personally wala pa akong nadevelop na mentoring program pero I do what I can to be a mentor through this site… hehe. Maybe in the future, I’ll develop one. :-)

  • Lelet Sanchez-Deza

    Hi Jay! I am also from Provident Village and you might be able to shed some light on my queries. Part of the land where my house was erected is still under court litigation, long story, but you know how most lots there has problems. Maybe I can explain this better if I can talk to you personally. Do you have a contact number I can call? More power and thanks for sharing!

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

      Hi Lelet, you can contact me using this number: +639178843882. You can also contact me through e-mail here: http://www.foreclosurephilippines.com/contact.

      I look forward to talking with you soon!

  • john

    First of all i want to thank you for all this information you are sharing to us for FREE.. I am just new in this realstate business. I am still looking for a potential lot or apartment to loan it with the bank.. recently, i found a lot in cubao and it is already in the name of the bank.. but the tenants are still there and they are 10.. Sir jay, can you give me tips on how can i deal with the tenants.. thank you very much for your time.. Godbless you and your family..

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

      Hi John, you’re welcome and thank you also for the kind words!

      May I ask if the tenants also include the former owner? Are they paying tenants or “informal settlers”? If the tenant turns out to be the previous owner then my advice would be to walk away. If the occupants are just tenants who are paying rent, then that would be a plus factor if the rents are up to par with current rental rates. If they are informal settlers, then you can do what some banks do, which is arrange for them to leave peacefully by giving them a relocation allowance. Maybe instead of the sheriff enforcing the writ of possession of which will cost you money, you can just pay them the relocation allowance instead. Of course you should only give the money one they actually leave, but be tru to your word and give them the allowance once they leave peacefully.

  • Mary Joyce

    Can i ask if u know any lawyer that i can consult about our house that is already foreclosed. I want to know what are my rights and i wanted to buy it back. Thanks!

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

      Hi Mary, I attended a lecture once that was conducted by a lawyer and the topic was foreclosure prevention. Unfortunately, the lecture notes where I wrote his name and phone number also got submerged when our house got flooded. I’ll see if it is still readable and get back to you.

      While I look for my notes, you can also try looking for a lawyer who is 1) Someone you know and can trust 2) Someone who is familiar with ACT NO. 3135 – AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS INSERTED IN OR ANNEXED TO REAL-ESTATE MORTGAGES. This act basically outlines the legalities of foreclosure proceedings here in the Philippines.

  • http://www.investingpinoy.blogspot.com Bryan Uy

    Hi Jay!

    You’ve come up with great suggestions indeed. I’m sure this has help many people living in Marikina and flood-proned areas understand their options on how to deal with their property, whether affected by Ondoy or not.

    Thanks again for the great post.

    Bryan
    .-= Bryan Uy´s last blog ..Investing in Instant Savings: The Ondoy Aftermath and A Classmate’s Untimely Death =-.

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

      Hi Bryan, thanks a lot! Actually my wife and I have been having a lot o ideas like an “Ondoy” bag that can serve as a lifesaver/floatation device and at the same time it contains all the stuff one would need to survice for 3 days, etc. Personally I was thinking of a floating section of the house, or a floating parking slot, etc. Really crazy ideas. :-)

      • http://www.investingpinoy.blogspot.com Bryan Uy

        Hahaha… Crazy ideas indeed… Crazy ideas like the telephone by Bell, incandescent bulb by Edison, internet and now, floatation devices for flood emergencies. Hmmm, you think this idea will produce the next multi-millionaire? Sana nga bro!

        God bless!

        Bryan
        .-= Bryan Uy´s last blog ..League of Extraordinary Minds FREE Training: 48 Hours Until Your Business Explodes =-.

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

          Haha, sana nga bro! Dami pang crazy ideas namin pero kwento ko na lang pag nag coffee tayo!

  • nightwatch

    Hi Jay,

    It’s really nice to read your articles again inspite of what just happened. I admire your positive view on creating a wealth of knowledge from an incident like this. It really teaches us a lot of things particulary in real estate investing.

    Now, you think we can have source of information that will tell us the height/elavation of a location with regards to the nearest body of water? Like, meters above sea level or nearest river level? Although, it’s been said the best source of information regarding things like this ay yung mga people within the area, kapitbahay and etc.

    Regarding your place at Provident, If there are other ways for you to avoid living in the area, I would advise you do so. It’s about peace of mind. Although I wish the ONDOY calamity is the last of it, I don’t want to leave it to chance.

    Goodluck, bro! Like you said, Kaya yan! It’s just a blip, a temporary set back.

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

      Hi Nightwatch! Thanks, I’m seriously considering your advice, for my peace of mind and for my family’s.

      Regarding the info on flood levels, someone started entering data in google maps and you visit it here: Typhoon Ondoy maximum flood height.

      Just zoom in and see the data that people like me have already entered.

  • http://www.expertmarketingcorp.com Caren Tiangco

    Jay, I have some investors who are open to check out Provident Village. Do send some listings.

    If I were in your position given the trauma of the event, it should be more exciting to find another primary residence. Since Provident requires investment better it be the next investor– as a broker, you will be exposed anyway to other projects.
    Since Provident is near the UP area and Riverbanks Call center, the dorm idea or callcenter dorm may be a good exit for you or your investor.

    Good luck and still looking forward to network with you.

    Caren Tiangco

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

      Hi Caren, thanks for the interest! I already have 2 leads (actually they are siblings from Provident who both want to sell their properties) and I’m just waiting for more details. once I get them, I’ll contact you. I also plan to spread the word in the village that I can help those who want to sell their properties. Hope to work with you the soonest!

  • http://www.jehzlau-concepts.com/ Jehzeel Laurente

    Grabe talaga yung baha sa provident village. Glad you and you’re family moved on na. :)

    In every tragic phenomenon, there’s always a new lesson learned talaga. ^__^

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

      Hi Jehz, yes, life must go on! Nice to see you here, thank you also for dropping by. Best of luck sa Singapore!

  • http://polprav.blogspot.com/ Polprav

    Hello from Russia!
    Can I quote a post in your blog with the link to you?

  • ces peralta

    Hi jay,

    Happy moving on……..kaya mo yan toghether with your family.My prayers goes with you…..

    ces

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

      Thanks a lot Ces, really appreciate it! :-)

  • soleil parker

    Well,hopefully ma solusyunan na po ang problems dyan sa tin. I’m just wondering why are there no people from the government ang may lakas ng loob na i address ang issues about squatters? are they afraid that mababawasan ang boto nila or magaling ang lawyer ng illegal settlers or kampi nila ang Human Rights??? Dapat na silang alisin permanently…lalo na sa may floodway din sa Cainta and Taytay…….at bakit sila dumami? sana pag ni relocate sila…pwede silang tumira for life..but don’t give them the title sa property at ibebenta lang nila…kawawa naman ang Pilipinas….how can people invest if napaka pangit ng mga lugar satin..unahin na muna ang pagandahin ang bansa….

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

      Hi Soleil, actually MCF mentioned that they are looking for properties where they can relocate “informal settlers” pero she can only do this for Marikina. I really hope those from other cities will also have the same political will. Tama ka diyan, yung iba kasi nagiging professional squatters at lumalakas ang loob kasi alam nila na iniisip ng karamihan na politiko na sayang din yung boto from them. tsk tsk.

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  • KamoteChunks

    THUMBS UP!!! very inspiring indeed.. salamat parin sa pagshare ng knowlage mo, newbies like us learn so many things from your blogs.. even na may “test” sa life mo ngaun.. salamat sa information.. and god bless, im sure people like you will have so many blessings in life. AJA!!

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

      Thank you so much Kamotechunks! God bless you and your family!

  • http://stormproof.wordpress.com/ Ronald Cagape

    Hi Jay,

    Here are my 2 cents:
    1. From what I heard Provident is flood-prone (especially if the river level rises) so your idea of putting a second floor the right move. You should go ahead and do so.

    2. I don’t think you need the money so you should definitely wait. Selling now would be a kneejerk reaction. You’re going to take a hit in the pocket for some time but as long as your cashflow can manage it, ride it out. Of course, if it proves that the house will be too much a burden, sell earlier. You don’t want to become a desperate seller!

    3. If you decide to keep your house as investment, explore other options such as turning it into a boarding house / dormitory to improve the cashflow.

    You actually touched on a lot of things I’ve been mulling on the past few days. I enjoy reading your blog so keep your hopes up. :)

    Regards,
    Ronald
    .-= Ronald Cagape´s last blog ..Birth of an Idea =-.

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

      Thank you Ronald for the valuable inputs, excellent advice!

      I understand how the flood also affected your real estate business. I’m sure you and your wife can bounce back easily! All the best!

  • http://yahoo mary

    Sir jay salamat sa mga inpormasyon d2 sa site mo sa pag tatyaga at sipag na binigay mo .Sir may kinuha po kaming property dyan sa quirino highway QC. westwing properties ask lang po kanino po kami magtatanong about sa place bukod sa agent namin kung binabaha ba doon or hinde kc as of now ginawa pa rin eh,nsa ibang bansa kc kami tapus sa malayo po ang family namin sa lugar na yon.

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

      Hi Mary! The best source of information siguro yung mga residents in the same area. Sana kung magaling yung developer, taasan na nila yung property para hindi na abutin ng baha, just in case binaha nga.