*I have turned this into a sticky post for new visitors.

I was supposed to finish writing my “Goodbye and thank you to 2010, Hello 2011…” post, but ended up with this list of the best “How to” articles from Foreclosure Investing Philippines during the year that passed. After all, FIP is so much more than just listings of foreclosed properties and public auctions. I believe you also need to know how to invest in foreclosed properties and bank acquired assets.

I hope this list will help you get started on the right foot. Just in time for the new year right?!

Of course I won’t let 2010 go without counting the blessings that came my way, but for now, here’s a list of “How to” articles from 2010 that can help you get started with real estate investing in 2011:

How to keep the passion burning for real estate investing – 2011 has just started and I know you are all fired up and ready to take on just about anything to succeed with real estate investing. Even with a good start, challenges and problems will surely try to block your path to financial freedom, and how does one “Stay hungry and foolish”? This post aims to help take care of that.

How to turn listings of foreclosed properties into opportunities – So you’ve played cashflow 101 and you got out of the rat race by buying passive income generating real estate, including some foreclosed properties. However, one may realize that buying properties in the game is not as easy in real life. Read this to learn how to start finding those “opportunity cards” for real inside listings of foreclosed properties.

How passive income through real estate investing can lead to financial freedom – What exactly is passive income? Why do you need to start getting those passive income deals to get out of the rat race? Just how does one get out of the rat race faster? Read this to find out.

How to be a proactive real estate investor – We always hear people say “I can’t do this and I can’t do that because of this and that…I have no choice.”. Most of the time, we talk like this to ourselves, unless we begin to be proactive. This article tries to convince us to start believing that we always have a choice.

Are foreclosed properties good deals? – If you think that just because a property is a foreclosed property, then it is automatically a good buy, think again! Before you get started with investing in foreclosed properties, find out why it is often said that real estate investing is a numbers game.

4 reasons why we need to be financially literate real estate investors – More money is never the solution if the problem is lack of financial literacy. Learn how having financial literacy is the only way to get started with real estate investing, and how it also prevents you from becoming like most lotto winners, who lose their money fast.

How to compute for the ARV of foreclosed properties – Okay, so you found a foreclosed property and you want to make an offer, or you want to bid for it. But before anything else, you need to determine what it could be worth, this would help you calculate this.

How to compute for the Maximum Allowable Offer or MAO for foreclosed properties – After computing for a property ‘s “value”, you also need to determine at what maximum price you can pay for it, leaving enough room for you to make enough money and be happy.

How to compute for the projected costs for acquiring, carrying, and selling a property – But wait, how does one know that the estimated costs for buying and holding a property are accurate? One needs to make sure just how much it would cost to buy a property and also the related costs of holding it for the projected amount of time needed to sell it.

How to compute for Net Operating Income or NOI and find good investment properties – Rental properties are not all profit, there are operating expenses that will be incurred, and you need to consider these to get the NOI, and see if a property can really generate positive cashflow and passive income.

Instant gratification versus delayed gratification – Want to learn how practicing a little delayed gratification can help you get started with real estate investing? Read this!

How to find opportunities and get started with real estate investing – If you really want to get started with real estate investing, you need to learn how to see those opportunities and grab them. They can lead to a series of advantages and lead to even more opportunities.

2010 has passed and lessons have been learned, but I would like to say thank you to 2010 one last time.

Happy Investing!

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

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

PS. Don’t be the last to know, subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. Mailbox getting full? Subscribe through my RSS Feed instead.

FIP’s best of 2010 to help you get started in 2011 is a post from: Foreclosure Investing Philippines

Incoming search terms:

After inspecting a bunch of foreclosed properties recently, I was to drop-off my real estate broker at her house. Her grandson who was around 7 years old, approached us after I parked, while we were still inside my car.

He signaled me to open the window, which I did, and he noticed I was using my HTC Touch Pro 2 while I was texting someone and he said “Wow, you have a nice phone! Are you rich?”.

My HTC Touch Pro 2 with my property analyzer worksheet loaded

Both my broker and I answered without hesitation “Yes of course, we are rich!”. (If someone asks you the same question, you should always say yes, and let the Law of Attraction do its magic!)

He then sarcastically said “Yeah, you must be rich, it’s probably the reason why you have such an expensive car”. Take note that my car is an SUB… a subcompact! It’s a turbo-diesel Hyundai Getz.

The 2008 Hyundai Getz. My car is the CRDI variant

I said “Well, because this was the car I bought, I was able to buy three houses the following year…”.

He then said to his grandma “Lola, let’s buy Jollibee…”.

I guess my answer did not sink in and he was more interested with satisfying his craving for burgers and fries, which is totally understandable for a kid his age.

In retrospect, I believe that my broker’s grandson was just frank enough to ask me the very same question which I believe some people who see my car dare not ask me, why did I buy my car, when I could have bought a more expensive or bigger one?

When I availed of the car plan offered at the company I used to work for way back in 2008, I could have bought the newly released 8th generation of the Honda Civic or a Ford Focus. I knew some people at the office back then had this question in mind, according to some of my close friends.

Why did I buy my car?

One of the reasons why I bought a diesel powered subcompact was to manage my cashflow, which in turn helped me buy three foreclosed properties the following year. Hard to believe right?

Aside from the lower monthly amortizations, which was less than two-thirds of what I would have paid for on a monthly basis if I had bought a Civic, my monthly expenses for diesel fuel was just less than Php2,000 per month. Compare that to my wife’s 1998 Honda Civic for which I had to spend more than Php4,000 for unleaded fuel per month.

Maintenance for my new car was also easy on the pocket, at about Php6,000 per quarter. Our old car needed about Php25,000 per quarter on the average for maintenance and repairs (new problems were always being found that needed to be repaired… that sucked big time!). By the way, I forgot to mention that my car is covered by a 5 year warranty… nice!

It’s hard to believe but the net effect of my choice of buying my car was it lowered my monthly expenses by about Php5,000 per month, as compared to buying a more expensive car, or maintaining the old car we had.

Php5,000 per month may not sound much but that is already comparable to the positive cashflow of one rental property. It is also just about equal to 10% of my take home pay back then, which meant I already had enough to fulfill my target of setting aside at least 10% of my total monthly income for my Financial Freedom Account or FFA.

Instead of draining my savings, buying a car actually helped me increase my savings by lowering my expenses. Who wouldn’t want to have that?!

Delayed gratification

Even if I could have bought a more expensive car back then, I chose not to do so, and bought a small car instead.  I simply needed a car that can take me and my family safely and comfortably from point A to point B (It did just that when we drove from Antipolo to Baguio and back to Mandaluyong with just 1 full tank of diesel back in 2008).

I believe what I did was an example of delayed gratification. My logic here was I can buy a small car for now, and it would not hinder my goal to build my Financial Freedom Account, which I will use to buy real assets that put cash in my pocket.

After I buy real assets first, I can then use any excess cashflow or money from capital gains to buy a bigger or more expensive car, if I wanted to. So far I am very happy with my Getz.

But wait, you might be thinking I did not practice delayed gratification when I bought my mobile phone. Not really, the HTC Touch Pro 2 was released more than a year ago and the one I bought last October was a second hand unit, although it was good as new. A brand new unit at malls would retail for around Php35,000 but I bought mine for less than a third of  the retail price, from a reputable seller at tipidcp.com.

Instant gratification

Imagine if I had bought a more expensive car first. That would have resulted in little or no money left for me to invest in real estate. I probably would not have been able to buy the three foreclosed properties I acquired last 2009.

Who knows, maybe I would not have been able to save enough money for my emergency fund, and I would not have had the courage to resign and get out of the rat race.

Buy assets first, liabilities second

Another great example of delayed gratification would be to buy assets first, liabilities second, just like what Robert Kiyosaki mentioned in the video below.

He bought a Porsche by first investing in a storage facility, and then he used the cashflow it generated to pay for the Porsche. The cashflow remained even after the Porsche was already fully paid. Now that’s a smart way to buy a liability!

Let me see… a Hyundai Tucson, a  Ford Fiesta, or even a Toyota Prius would be nice. I guess I should be asking myself  “How many good real estate deals do I need to buy first?”. What do you think?

Happy investing!

To our success and financial freedom!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Follow me in Twitter:http://twitter.com/jay_castillo
Find us in Facebook:Foreclosure Philippines facebook page

Text by Jay Castillo and Cherry Castillo. Copyright © 2010 All rights reserved.

PS. Attend Larry Gamboa‘s Think Rich Pinoy Seminar on December 4, 2010. Click here now to grab your seats now! or download more information about the Think Rich Pinoy Seminar (please feel free to forward to your friends).

PPS. Don’t be the last to know, subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. Mailbox getting full? Subscribe through my RSS Feed instead!

Instant gratification versus delayed gratification is a post from: Foreclosure Investing Philippines

Incoming search terms:

I was cleaning out my archived emails in preparation for returning my company issued laptop when I stumbled upon this very interesting story in one of my emails in my sent items. I forwarded this same story to my friends way back in January 2006, a few months after I first read “Rich Dad Poor Dad” by Robert Kiyosaki. This was the time when I experienced a paradigm shift in my head after reading the book and started to devote most of my spare time to learn all about passive income, getting out of the rat race, and financial freedom.

Although I read this story almost 4 years ago, I still want to share it with all of you here as I believe that the story clearly illustrates the difference between earned income and passive income. Enough of the chitchat, please continue reading the story below…

A Parable: Creating a Stream

Adapted from an audio segment by
Robert Kiyosaki, best selling author of “Rich Dad, Poor Dad”

A Spring Runs Dry

The story is told of a spring that ran dry in a small mountain village. The leaders gathered to determine how they would supply the village with clean water. There was another spring and reservoir about a mile away but was too far for the villagers to travel.

One of the men volunteered to solve the problem by carrying water into the village himself each morning for a set fee. Since the need for water was clear, the leaders agreed to the offer and determined a fair price for each bucket of water delivered.

Early the next morning the “bucket carrier” arose and began transporting water. It was hard work but he was pleased with the immediate pay for his efforts. He awoke each day and hurriedly carried water.

The more he delivered, the higher the pay.

As time went on, he began to think there had to be a better way. So,he designed buckets that could hold more water and were easier to carry. He bought better shoes and discovered a quicker route between the reservoir and the village.

The problem was, despite all his improvements, the bucket carrier still had to get up each day to carry water.

A Better Solution?

Some time later, another villager came forward with an offer to supply water. He planned to build a pipeline from the reservoir to the village.

The leaders were skeptical but eventually agreed to the competing plan, especially since the new proposal would cost the villagers less for the same amount of water.

So, while the bucket carrier continued his daily routine, the second man began work on the pipeline.

The digging was tedious through the treacherous mountain terrain. The necessary tools and materials proved costly but he continued his work diligently for many months.

Finally, the “pipeline builder” installed the last piece of pipe and ceremoniously opened the valve while a crowd gathered. Everyone cheered as they watched clean water flow into the village cistern.

How Things Changed!

The following day the two men’s worlds changed dramatically.

The bucket carrier had to lower his prices significantly to remain competitive. He worked harder and yet found himself worrying about losing his job.

The pipeline builder, however, began enjoying the fruit of his labor. He stopped working long days and began enjoying the income his venture generated. He found the pipeline required minimal maintenance, so he was free to spend his days fishing the mountain streams and enjoying time with his kids.

Years Later

Many years later, after both men had died, the pipeline was still an integral part of village life and the pipeline builder’s children continued to enjoy the benefits of a father’s entrepreneurial spirit.

Observations…

	Bucket Carrier	Pipeline Builder
Description	Employee – Has a job	Entrepreneur - Owns a system
Income Type	Linear Income	Ongoing Income
Effort	Constant	Intensive early with minimal later
Implications	Time Poverty	Time Freedom
Reward	Immediate gratification (paycheck)	Delayed Gratification (fees for service or royalties)
Examples	Construction worker, Doctor, Secretary, Lawyer, etc.	Author, Inventor, Artist, Musician, Business Owner, Entrepreneur, etc. (Real Estate Investor)

Consider building a pipeline…

It doesn’t matter how efficient you are at “carrying water” (your job). Nor does it matter the size of your paycheck. Going to work tomorrow, next week and ten years from now will still be the prerequisite to collecting a paycheck.

When I forwarded this story to my friends almost 4 years ago, I had no idea where this adaptation came from as this was not in the book Rich Dad Poor Dad. Now I’m quite sure that this was adapted from a story in “The Cashflow Quadrant”, also authored by Robert Kiyosaki as I have just finished listening to the audiobook version  for the nth time and I heard this story near the beginning of the book.

Coincidentally, I also remember that a friend of mine and I were able to watch another version of this story just a few weeks ago when we were invited to a presentation by a certain multilevel marketing company. They showed a video of this story to prospective recruits. By the way, Roel of bloggista.com also shared a video of this version of the story through one of his posts and you may also watch it here: The Story of Pablo and Bruno.

My Insights

This is exactly the kind of passive income stream that I started to create through rental income by investing in foreclosed properties. It wasn’t easy at the start and it took quite some time. Keep in mind that I started on my quest 4 years ago. I guess what really matters is I decided to start and take action and I am still able to sustain it  after all these years in spite of the challenges that I faced, and I’m sure there will be more challenges ahead. One of the things that keeps me going is the vision that as long as I continue doing this, I will eventually be able to create a big enough passive income stream which would allow me to stop carrying buckets.

So what bucket are you carrying?!

—

My vision – financial freedom for all!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Click here to contact me via E-mail
Mobile phone (Call/SMS): +639178843882
Follow me in twitter: http://twitter.com/jay_castillo
Become a Fan in Facebook: Foreclosure Philippines fan page

Text by Jay Castillo. Copyright © 2009 All rights reserved.

PS. If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.

PPS. If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.

A parable on creating a Passive Income Stream is a post from: Foreclosure Investing Philippines

Incoming search terms:

While I have said in the past that it would be great to buy a house and treat it as an investment, I want to take it a step further. What if instead of buying a house outright, one would first buy an income generating asset that would generate positive cashflow and help take care of the monthly amortizations of the house that one would then buy afterwards?

Just this morning I mentioned this idea to my wife and I said “Wouldn’t it be a great idea to buy an investment property that would be able to pay for the monthly amortizations of the house that we intend to live in?”

Call it coincidence but while I was driving to work,  while I was listening to an audio book entitled “You can choose to be rich”, I heard the author, Robert Kiyosaki, mention that one big difference between the rich and the middle class is the rich buy assets first and then they use the income from these income generating assets to buy their liabilities. At least that was how I understood what he said.

Furthermore, the middle class buy liabilities first and then hope that someday they will have the chance to buy income generating assets. Believe me when I say that it really is difficult to buy assets once you have already bought liabilities that don’t generate any income as you already have a big burden which comes in the form of those big monthly amortizations. Furthermore, this makes it really difficult to raise the capital needed  for the downpayment for income generating assets.

In effect, the scenario of buying liabilities first produces a situation that traps a lot of people in the rat race. They have no choice but to work hard to keep up with the monthly payments and they lose the opportunity to buy income generating assets first. This sounds like the situation we were in a few years ago. I guess this time around, a little delayed gratification is needed.

Am I making sense? What do you think?

—

My vision – financial freedom for all!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Click here to contact me via E-mail
Mobile phone (Call/SMS): +639178843882
Follow me in twitter: http://twitter.com/jay_castillo
Become a Fan in Facebook: Foreclosure Philippines fan page

Text by Jay Castillo. Copyright © 2009 All rights reserved.

PS. If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.

PPS. If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.

Buy income generating assets first is a post from: Foreclosure Investing Philippines

Incoming search terms: