Foreclosure Philippines » real estate investment

Are foreclosed properties good deals?

Jay — Sun, 29 Aug 2010 22:00:36 +0000

It depends! Obviously not all foreclosed properties are good deals.

It’s common sense that not all properties are good investments, foreclosed or otherwise, you don’t need to be a real estate investing guru to know this. However, based on the number of times I’ve either heard people ask or get asked this very same question, I feel that a significant number of people out there either have a misconception about foreclosed properties, or they are simply clueless.

Let me make it clear, NOT all foreclosed properties are good deals, and it would be foolish to think all of them are.

Don’t ever expect all foreclosed properties to be good deals because if you do, you are setting yourself up for frustration, disappointment, and failure, especially when you start finding foreclosed properties that turn out to be horrible deals. More on this later.

“Hey Jay, are you saying foreclosed properties are no good?”, you might be asking.

As I said, it depends. No, I’m not discouraging you, I’m just trying to help with managing expectations. Admittedly there are more bad deals out there than good deals, but there are still more than enough hidden gems out there that can make worthy real estate investments, and the key is finding them. One needs to look at a lot, and when I say a lot, I mean a lot of properties, to find those hidden gems, after all, investing in foreclosed properties is a numbers game.

Investing in foreclosed properties is a numbers game

I’ve said it before and I’ll say it again, investing in foreclosed properties is a numbers game.

: Image by nickhall via Flickr

The greater the number of foreclosed properties you look at, the greater the chance that you will find those good enough deals, and even some great deals. However, you will find a lot of bad deals in the process, but that’s just part of the game. It’s okay to find horrible deals, as long as you find out before you bought the property, and move on.

Keep in mind that one cannot just give up after looking at a few properties. I often hear people get frustrated with foreclosed properties after looking at just one or a couple of properties, or even with just one listing that really did not have many properties to begin with. And then they give up and say things like “I’ll never find any good deals…” or “The numbers will never work…” or “This is too hard…” or “I’m just wasting my time…”. Sorry, nobody said foreclosed real estate investing is easy! It may sound simple, but it isn’t easy.

The 100-10-3-1 Rule

You basically need to look at a significant number of properties to find those properties that are worth a second look.

How many would that be? The general recommendation would be to find about 100 properties worth a second look, after doing initial shortlisting. Out of those 100 properties, you will probably find 10 worth inspecting. Out of those 10 worth inspecting, you might find 3 properties that are worth giving offers for or bidding for, if they were for sale through a public auction. Out of the 3, you may end up buying 1.

That’s a brief overview of the 100-10-3-1 rule. I’ve read many variants of this rule from books and also from some of my mentors but they are basically the same. You analyze 100 properties, inspect 10, submit offers on 3, and end up buying 1. These are just average numbers, but you’d be surprised how accurate this average can be in real life. Been there, done that!

Other numbers to consider

Of course there are other numbers to consider when applying the 100-10-3-1 rule and when “doing the numbers”.

Numbers like After Repair Value (ARV), projected repair costs, target profit, Maximum Allowable Offer(MAO), Cash on Cash Return (CCR), Return-On-Investment or Return Of Investment(ROI), Net Operation Income(NOI), Cashflow, etc., to name a few, also need to be considered. For each of these numbers, you as the real estate investor will ultimately have to decide what is acceptable for you. These numbers will determine if a foreclosed property is a good deal or not.

If this sounds too daunting and tedious for you, I would be the first to say that this might not be for you. But there’s no harm in trying right?! Imagine what could happen if you consistently did this until doing the numbers became a habit and you actually became good at it!

No, I won’t have time to explain all of these numbers now, but one by one, they will be covered here soon.

Sometimes it’s all in the mind

I still remember during the early part of 2008 when I found myself unable to find any good deals in any of the listings of foreclosed properties that came my way.

I was still recovering from feelings of being betrayed after how Dinna Revilla, a former real estate mentor, got arrested and became a “fallen real estate guru”, and in disgust of what she allegedly did to those who trusted her(as far as I know, the case is still pending), I just decided to invest in mutual funds instead of real estate.

My respite from real estate investing however was short-lived because I eventually met another mentor, Doctor Jon Abaquin, who was also featured in Larry Gamboa’s book “Think Rich Pinoy”(see page 155), who later challenged me and a couple of my friends to each buy a property within 90 days.

Lo and behold, from the same listings lying on the table in my bedroom where I could not find any suitable properties, all of a sudden I was able to pinpoint at least 3 very promising foreclosed properties from 3 banks and I ended up submitting an offer for the most promising one. Later, that one offer got accepted. That experience opened my eyes and from that point onwards, I truly believed that there were good, and great deals out there, I just had to look a little bit harder!

But what if I do find a good deal but have no money to invest?

My take on this: Financial literacy is a prerequisite to real estate investing. Being financially literate leads to proper management of one’s money and finances, which should then help one save enough capital for investing. When that right deal comes, you will be ready. If you think that would take too long, then another option would be to find investors for your deal, although personally, I would recommend that beginning investors do it by themselves, especially on the first few deals.

I believe you should build your track record with your own money first before risking other investors’ money. If you can’t even handle your own money, how do you expect to be able to handle the money of investors?! Sorry if I may sound harsh, but hey, this is just my opinion.

So how many properties have you looked at?

Have you looked at 1, 2, 3… and have given up already? Are you looking hard enough?

Remember, the more you look and do the numbers, the greater the chance that you’ll find that real estate investment for you.

Next time someone asks you, “Are foreclosed properties good deals?”

I’m pretty sure most of you out there will eventually encounter this question once you decide to invest in foreclosed properties and people learn what you do. Well, I hope to help save you the trouble of coming up with your own answer, which can turn out to be a very long one, just like mine. If you want, you can just send them over here, and I hope my answer above will be of help.

Next question please!

Good luck and 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

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Get ready as the 4th Philippine Housing Fair pushes through on December 27-29, 2009!

Jay — Mon, 07 Dec 2009 09:00:47 +0000

This is just a reminder for interested parties to get ready for the 2009 Philippine Housing Fair which pushes through on December 27-29, 2009 at the SM Megamall Megatrade Halls 1 and 2. Originally scheduled on October 27-29, 2009, the 4th Philippine Housing fair was postponed, most probably due to the complications caused by Typhoon Ondoy’s visit. I’m just glad that the housing fair will finally push through. This was also mentioned in a recently published news article in Pag-IBIG’s website, a copy of which can be seen below.

HUDCC holds 4th housing fair on Dec. 27-29

December 4, 2009

For the fourth time in a row since 2006, the Housing and Urban Development Coordinating Council (HUDCC) chaired by Vice President Noli “Kabayan” De Castro, will spearhead the conduct of a three-day Housing Fair from December 27 to 29 at the SM Megamall Megatrade Halls 1 and 2 in Mandaluyong City.

The Fair will be participated in by the Home Development Mutual Fund (Pag-IBIG Fund), the Home Guaranty Corporation (HGC), the National Home Mortgage Finance Corporation (NHMFC), together with the Bangko Sentral ng Pilipinas (BSP), the Social Security System (SSS), and the Government Service Insurance System (GSIS).

These agencies will sell their acquired properties with interest rate as low as 6 percent payable up to 30 years. Housing developers will also showcase their latest projects while suppliers of home interiors and furnishing will feature their products in the fair.

De Castro said the housing fair is part of government’s continuing effort to provide decent and affordable homes to low-income workers.

“We understand their aspiration to have decent homes they can call their own. This is one way of helping them realize that dream,” De Castro stressed.

Close to 75,000 properties all over the country will be offered for sale to government and private employees and overseas Filipino workers.

The Pag-IBIG Fund comprises the bulk of the total with 31,476 properties, followed by the BSP – 21,673; the GSIS – 20,206; the NHMFC – 711, the SSS – 357 and the HGC – 356.

Under the program, Pag-IBIG has disposed acquired properties valued at P5.6 billion.

According to De Castro, the Fair benefits both homebuyers through the availability of affordable homes, and the government financial institutions through the sale of their idle assets. (end)

Source: http://www.pagibigfund.gov.ph/nr_deca.htm

For more details about the 4th Philippine Housing Fair (2009), you may also visit my earlier post: Philippine Housing Fair 2009 which contains a tabulation of the terms and conditions, direct links to the listings of acquired assets/foreclosed properties of each of the key shelter agencies and government financial institutions, and other useful information.

Lastly, if you are attending the housing fair to buy your first home, why not treat it as your first real estate investment?!

Happy investing!

—

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

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.

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Our journey to our new house – Finding a new home like true real estate investors

Jay — Fri, 20 Nov 2009 01:07:43 +0000

My wife who has become so obsessed with finding a new house we can call our home shares updates on what we are thinking of doing with our old house that was devastated by Ondoy, what things to consider, our target locations, finding not just a house but also a sound real estate investment by searching foreclosed property listings, and applicable tax exemptions and pending articles about this and other taxes that apply to real estate, which I hope she finishes soon…

I’m just glad that I was able to convince her to buy a property the way true real estate investors looks for a good deal. Knowing how stubborn she is, I was surprised how easy it was for me to convince her that this is a perfect opportunity for us (as a team) to find a really sound real estate investment that will produce a good positive cashflow if we decide to have it rented out, or sell it for a significant profit down the road. This can only happen if we buy a house well below market value and apply Rich Dad’s principle “… You make money when you buy, not when you sell” as often mentioned by Robert Kiyosaki, best selling author of “Rich Dad Poor Dad”.

Our journey to our new house

By Cherry Castillo

As most of you may already know, we are looking for a new house, as our old house was totally devastated by Ondoy. I am sure many of you are in the same boat as ours. Of course, our decision to move entails more decisions with regard to the next steps, such as:

1. What do we do with our old house? Right now, we have a payment holiday until January 15 with Pag-Ibig. But after that date, we have to continue paying the monthly amortizations. Admittedly, the market value of the house is in question, and it’s not practical to continue paying the amortizations which was based on the market value of Provident Village prior to Ondoy. The next question is, do we sell it now, do we let Pag-Ibig foreclose it, or do we surrender it through a dacion en pago (a.k.a. payment in kind – that is, we give the house as payment for the loan)? If we sell it now, we will be selling it at a loss, but we will be cutting our losses since we will stop paying the high monthly amortization. If we let Pag-Ibig foreclose it (or if we surrender it through dacion en pago), how do we go about it? While it is clear that my husband will no longer be able to take out another housing loan from Pag-Ibig, would it also affect my husband’s credit rating and prevent him from taking out a loan from banks?

2. Granted that we will be moving, where do we go? We can go anywhere! Anywhere where there’s no flood of course. And since we are now so paranoid of natural (and man-made) calamities, if we are to move, we have to make sure that the area is one that was not reached by floods and that there is at least a second floor. I don’t want to be in the mountainside too for fear of landslides. We are now open to condominiums (unlike before, when I really could not imagine living in one), but not those that are too high, as I am also concerned about earthquakes. You may have noticed that there have been a lot of news about earthquakes in the Asian region and in the Philippines in particular. I have been telling my officemates that the best place to be is in a low-rise condominium, somewhere in the 3^rd or 4^th floor, since it will not be reached by floods, the structure will be strong enough to withstand earthquakes, and if there’s a fire I can jump out of the window and just have broken bones, or, if there’s a swimming pool nearby, I can just go straight to it. I know it’s a bit on the psycho side but you really get to think a lot about these things if you’ve gone through the great flood brought about by Ondoy. Oh, I forgot, I don’t know how to swim. I better join my son in his swimming lessons this summer! And time to turn into reality the Ondoy-related ideas I have thought about.

3. Where are our target locations? I have narrowed down our choices to the elevated portions of Kapitolyo, Pasig, San Juan, and Quezon City near UP. Aside from the earlier-mentioned considerations, it is very important for us to be near to a good co-ed school for our son as he will be turning five in January 2010 already and it won’t be long before he enters elementary school. I have sort-of developed loyalty to Mother Goose Playskool and Grade School (This is my son’s school in Provident Village, Marikina which was also devastated by Ondoy. Because they have several branches, they allowed my son to finish the rest of the school year in their Makati branch. Mabuhay ang Mother Goose!) so I want to find a house near a Mother Goose branch. As for my work, I am currently working in Makati but I am open to moving to Ortigas or QC, or maybe if my husband’s business picks up, I might just help him in the business. One of the best lessons I learned in the past years is that TIME is the most precious commodity. There are only 24 hours in a day and spending it on the road is totally useless. So the house should be near the place of work and study. In the course of my research, I have learned that prices are really so steep in the good areas.

4. This of course led me to search our site for foreclosed property listings (In the right side of the this page, you can use the “search” function to look for listings in this site.) I have also called several banks so I have updated listings with me, which my husband will be posting soon. I have also revisited my husband’s post on the Ultimate List of Bank Websites and I have found some updated listings there too. I have found a lot of promising properties and I must admit that it’s really exciting looking for good buys. I have been a bit depressed since last week, after I visited our old house and saw its sorry state. I determined that the only way for me to get out of depression is to finally have a new house! I have been joking that leaving our house is like breaking up with a boyfriend of 5 years – the only way to have closure is to have a new house/boyfriend! The process of looking for and deciding on the perfect place to grow our roots is both tiring and exciting. I do hope we find the house meant for us soon. We have visited a foreclosed property in Mandaluyong last week, full of excitement, only to have our bubble burst because of the really bad neighborhood, one of the worst as my husband put it (And he grew up in Mandaluyong! I really don’t understand why the Mandaluyong local government spends so much money fixing the islands when they have so many squatters!). My husband reminded me that it should be the other way around – we should find the worst looking house in a good neighborhood. I have also selected several properties and when I called up the bank, I discovered that they either have pending cases or encumbrances, or the bank does not have possession. Hay! I guess we have to look at more foreclosed properties (Around 100 more according to my husband – that’s a lot!). In God’s time, I know we will find the one for us.

5. Applicable taxes and tax exemptions? Being the tax person that I am, I really have to consider taking advantage of the capital gains tax (CGT) exemption from the sale of principal residence. I also need to create a post about this and all the other taxes – real property tax (RPT), percentage taxes, VAT, etc. (Okay, I’m really delinquent I admit!).

So basically, we will be going through the entire process of choosing a property that will also be a good investment. We are also looking at other properties, though not foreclosed but are rather houses for sale by owner (FSBO), but which look like good deals. We will do our best to document each step of the way so that it can be a handy and useful guide for everybody, much like a walk-through of the process. Wish us luck!

Cherry is my wife. She is a certified public accountant (CPA) and lawyer.

—

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
Twitter: http://twitter.com/jay_castillo
Facebook: Foreclosure Philippines fan page

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

PS2. Larry Gamboa and Bo Sanchez will give the Think Rich Pinoy Seminar this November 21 at the Philamlife Building in UN avenue in Manila. Larry will discuss his unique Real Estate methods, buying foreclosed properties and turning them around for passive income. You’ll also get to play Robert Kiyosaki’s CashFlow 101 Game and learn! To attend, click here now!

PS3. If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.

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How NOT to invest in foreclosures

Jay — Fri, 16 Oct 2009 23:21:30 +0000

One of my mentors, bestselling author Trace Trajano, recently posted a story about Anna, who bought a property in a foreclosure auction in the US. Take note that some of the things in the story might not be applicable here in the Philippines. Nevertheless, there are lessons here that are applicable to real estate investors no matter where our locations may be. Before that, here’s the story of Anna…

The Story of Anna
Posted by Trace Trajano on October 15, 2009 at 8:31am

Let me tell you the story of Anna…

Anna excitedly attended a foreclosure auction because she read a book saying that you can get a good deal at auctions.

She bid at the auction and won – wow. “Now I am going to be rich”, she told herself.

She needed 10% down – so she withdrew her life savings and use that as downpayment. Her credit is very good so she was able to qualify for a loan. She pulled it off.

Now it’s time to rent out the property.

BUT, there is a problem. In FORECLOSURE auction, there is very limited time to inspect the property. In fact, she bought it because the outside looks good and she figured the inside should be in good condition also.

There is termite damage at the joints and it’s an additional $5,000 repairs that she couldn’t afford. She pulled out her credit card and got a cash advance – payable with 24% interest. She figured she can rent the property for $1,000 a month so that will more than cover it, right?

She got a tenant. She did not pre-screen her properly. She got a bad tenant. A tenant from hell in fact. Her tenant only paid the first month’s rent and now does not return her phone calls. She optimistically said, “No problem – I’ll get her evicted”. Her tenant from hell is a professional tenant. He (the tenant from hell) accused Anna of being a slumlord. The eviction was delayed.

Two months of no income…then three months. Now Anna had to skip paying her credit card because she cannot even afford the minimum payments. Anna had to fire her eviction attorney because he couldn’t handle the eviction against the professional tenant.

Wan’t to know the rest of the story? Read the rest here: http://buyfirstdeal.ning.com/forum/topics/the-story-of-anna

Real estate investing lessons learned

Let me try to dissect Anna’s story and share lessons learned with regard to real estate investing.

1. Invest for the right reasons
After Anna won the auction, one of her immediate thoughts was “Now I am going to be rich”. There really is nothing wrong with wanting to get rich, who doesn’t! However, I can’t help but feel that money was her biggest motivating factor. Besides, once you win your first auction, becoming rich is usually the last thing on one’s mind, at least that’s how I often feel when I win on my bids during auctions. I usually have thoughts like “Oh no, I won… what did I get myself into?”, “Now you’ve got a lot of work ahead of you Jay…”, and “I did my due diligence right, so this deal should work!”. That’s why I can’t help but feel there’s something lacking here based on the story because her focus was on the money.

Just remember that if you are going into real estate investing just for the money, something is definitely missing! Personally, I always try to keep in mind that my decision to go into foreclosure investing is not really just about the money, it’s about financial freedom!

2. Don’t risk everything when investing!
Anna withdrew her life savings and used that as down payment. Don’t ever do this, it is not a good idea to risk it all for one deal! You should at least have an emergency fund intact somewhere safe. I don’t believe in putting everything on the line like my entire life savings as I would rather set aside money for the specific purpose of investing and only use that. I refer to this as my “Financial Freedom Account” or FFA which is just one of my “money jars” which I learned from T. Harv Eker and you can read more about it here: Manage your finances by becoming your own Chief Financial Officer.

Some of you may be thinking “But maybe Anna did not have enough money so she needed to use her life savings?”. Just a word of advice, if one cannot manage his/her money in order to set aside enough money to put down for a real estate investment, then one is not yet ready to start investing. There should really be no need to use one’s entire life savings if one is able to manage their finances well. I believe that this is a prerequisite to real estate investing.

3. Always do your home inspections as part of due diligence
Anna bought the property because the outside looks good and she figured the inside should be in good condition also. Argh! Never buy a property without first doing a thorough inspection and getting estimates from reliable contractors. I made this mistake once but I was lucky that property’s after repair value (ARV) was more than enough to cover the actual repair cost that I underestimated by Php100,000.

In Anna’s case, had she done her inspections well, she could have discovered the termite damage and avoided buying the property since she could not afford the termite damage repair. Actually it would be okay to buy properties that have similar problems as long as they are discovered before purchasing the property, the costs are considered and justified after analysis, and the additional cost is reasonable and affordable.

With regard to the very limited time to inspect properties being sold in foreclosure auctions, this is very true, even here in the Philippines. This is the reason why I would rather buy bank foreclosed properties or bank acquired assets, which are also often referred to as ROPOA or ROPA. In the Philippines, properties being sold in foreclosure auctions are those that have just been foreclosed and they are often for sale on cash basis only and they still have a 1-year redemption period, just like tax foreclosures.

4. Always Pre-qualify tenants
Anna did not screen her tenants well. Without pre-qualifying tenants, one is inviting trouble. By Pre-qualifying tenants, you basically want to ensure that your tenants not only have the capacity to pay but are also good payers. A simple interview or a questionnaire and some background checks would have helped her avoid that tenant from hell.

Anna’s problems snowballed into something she could no longer handle but the sad thing about it is all of these could have been avoided had she done her homework. This is really one story which outlines how one should NOT invest in foreclosures and all real estate investors should learn from it as it contains perfect examples of what NOT to do.

Did I miss anything? Any reactions? Please share your comments below. Thanks!

—–

To our financial freedom!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Social Network: http://foreclosurephilippines.ning.com
Mobile: +639178843882
E-mail: ph.investor [at] gmail [dot] com

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

P.P.S – 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 instead to my RSS Feed.

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Why not treat your first home as a real estate investment?

Jay — Tue, 13 Oct 2009 09:54:01 +0000

I remember a lot of comments from readers and also from people I meet in person who tell me that they are just looking for a place to live and are not really looking for a real estate investment. My default answer is “Why not treat your first home as an investment?”

In reality, once you buy a property, you become a real estate investor. Buying a home is often considered to be the biggest investment one can make so it’s best to treat it as a real investment — one which will give you reasonable returns if you do decide to turn it into a rental property or if you sell it further down the road.

What are reasonable returns?

Normally, when a person buys a house which he intends to live in, he does not consider how much rent he would earn if he decides to rent the property out, and whether the possible rental income would be more than his monthly amortization. It is not uncommon for a homeowner who moves up the corporate ladder or improves his situation to move to a better home but keep his first home for sentimental reasons.

Thus, if in the future, the homeowner decides to move to another house and converts his first house into a rental property, the rentals are often not enough to cover the monthly amortizations, thereby producing a negative cashflow situation. Had the homeowner considered his first house as a real investment, he could have dedicated more time to finding a property that would fetch better rental rates which could cover the monthly amortizations, thus giving the owner a nice positive cashflow.

More often than not, factors that may affect market values and appreciation are not given too much attention by a home buyer as the primary goal is just to have a place to live in. When the time comes to sell the property, it is very likely that there is little or no room for significant profits. At times, the homeowner may even have to sell at a loss. This situation could have been avoided had the home owner considered buying a property that was way below market value*.

*-”Market Value” is the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.

Buying a property below market value would be in alignment with what Robert Kiyosaki often says which is “You should make money when you buy, not when you sell”. Money is made in the form of equity* at the time the property is bought and the profit is realized when the property is sold. Robert Kiyosaki is the bestselling author of Rich Dad Poor Dad.

*- Equity is the difference between a property’s current appraised value or market value and the loan principal balance

The opportunity is there so don’t waste it

Everyone at one point or another will really have to buy his or her own home so why not make the most out of the opportunity? If done well, one could gain passive income in the form of positive cashflow, or a significant profit, or both. At the very least, the education one can gain from treating his first home as a real estate investment is priceless.

It is virtually risk-free

Since initially the goal of the home buyer is to have a place to live in, he would not really be concerned with holding costs associated with properties that take time to lease or sell. He/she lives in the place anyway so this makes it virtually risk-free in my opinion. In fact, I apply the same strategy to all of the deals that I have done this year as my last fallback would be to live in the property just in case I am unable to sell or rent it quickly.

The challenge in deciding to live in one’s investment property

If one decides to live in his/her own investment property, chances are one will have the tendency to fall in love with the property and over-improve it. I guess that’s the only risk that one should manage. Falling in love with a property can cloud one’s judgment and introduce costly improvements that one might no longer be able to recover.

If your first home is good investment, it can lead to more investment properties

If one buys his first home as an investment and not just as a place of residence, it can help ensure that more real estate investments would follow or at least it won’t prevent the homebuyer from buying more investment properties. Believe me when I say that buying a home that costs too much and is considered to be a liability can really hinder one’s ability to build enough capital to buy the next investment property. This is based on first-hand experience.

Ready to buy your first home? I wish you successful investing!

—–

To our financial freedom!

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

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