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

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

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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You are all invited to the next Think Rich Pinoy wealth seminar this Saturday, August 27, 2011, 8am to 6pm, at the L/G Skyland Plaza Bldg. Sen. Gil Puyat Avenue, Makati City. The venue is very near the Makati Post Office.

If you want to learn from Larry Gamboa and the Think Rich Pinoy Team who have been investing in foreclosed properties for years in the Philippines, then this seminar just might be what you’ve been looking for.

I attended the same seminar last August 18, 2007 (yes, that was more than 4 years ago!) and here’s your chance to attend what I often refer to as a “life changing” seminar.

What to expect

Here’s a preview of what’s in store for you in the Think Rich Pinoy Seminar on August 27, 2011…

If you have ever inspected a foreclosed property, you know that most of them need a lot of repairs...

Here’s more:

• Discover how Pinoy Investors are applying Robert Kiyosaki‘s Rich Dad Principles for Investing in Real Estate
• Find out how to become part of an exclusive Buyer’s List for hot real estate prospects
• Learn the best techniques for raising capital today
• Unlock the secret of how to analyze the numbers to ensure maximum returns w/ minimum risk
• Get In Touch With The Only Group In The Philippines Franchising People To Real Estate Success
• Learn how to overcome your biggest investing challenge in 2011

I will be one of the facilitators during the Cashflow 101 game in the afternoon. As someone who has actually invested in foreclosed properties, I would be more than happy to share my own experiences and answer your questions in relation to the Cashflow 101 game and how you can do it in real life.

Yes, it can really be done, and it really is possible to do it all in an ethical, morally upright, and legal way!

I hope to see you at the seminar!

Click here learn more about the Think Rich Pinoy seminar on August 27, 2011

Happy learning!

~~~

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

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

Full disclosure: I am an affiliate of the Think Rich Pinoy Seminar on August 27, 2011 and may earn affiliate commissions.

You are invited to the Think Rich Pinoy Seminar this Saturday, August 27, 2011! is a post from: Foreclosure Investing Philippines

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I will be starting a series based on the questions that were asked during a panel discussion with Will Abriza, Sha Nacino, and myself, in the recent Manila leg of the Money Summit and Wealth Expo 2011. Due to time constraints, we all gave very short answers. I believe I was not able to say all that I wanted to. Aside from sharing my answers for the benefit of those who were not present, let me share additional thoughts through this series.

The first question

The first question asked by money Summit and Wealth Expo 2011 emcee Airick Daquioag went something like this:

“What was the “aha!” moment that made you decide to take action towards financial freedom?”

My answer

“I realized that I was literally killing myself because of my job and it was not worth it, even though I was making good money.  Just like Will, I started to realize this after reading the book “Rich Dad Poor Dad”, although it took some time before I finally took action. This was when I was diagnosed with hypertension at a relatively young age of 37 years old and I realized enough is enough and I just had to do something…”

The whole story

Why did I say “I was killing myself because of my job?” – In Filipino, this would be “Nagpapakamamatay ako para sa trabaho!”.

You see, way back in 2006, I ended up doing the job of 3 people. My department was supposed to have 5 people at full strength and all but one either resigned or transferred to other departments, including me, and I was the first to resign.

I resigned to work for a small IT consulting firm that had a better offer for me. While working there, my staff introduced me to the book “Rich Dad Poor Dad” by Robert Kiyosaki. But because of the almost daily trip to/from Marikina-Makati-Batangas, I quit after 7 months and returned to my old company. I even took a pay-cut just to get out of there.

Anyway, when I came back, I believed that it would be easy to get us back at full strength, or so I thought. But I did not mind because I loved my job.

That changed, however, when one morning I thought the world had turned upside down, literally. I woke up early that morning because I had  to attend a managers’ meeting, but when I stood up I immediately fell down to the floor. I did manage to get up and reach the bathroom by walking while holding on to the walls of our house.

I was able to get myself ready to go to work, and after vomiting a number of times, I drove myself to work and attended the meeting. After the meeting ended, that was the only time I said I did not feel well and when our company nurse checked my blood pressure, it was at 140 over 100, well above the normal levels.

I ended up at the emergency room and was later diagnosed with vertigo and high blood pressure.

A deeper concern

Looking back, I was really crazy and stupid to insist on going to the office even though I was obviously sick right? During that time, I felt that I loved my job but I was literally killing myself for it.

I still remember my thoughts during those days.

I felt angry because my job has already affected my health, and what would happen to my family if something happened to me?!

I love my family and I felt it was foolish for me to just let this happen and I really had to do something!

This goes beyond the basic need of spending more time with your family which others may think is a bit shallow.  It was a deeper concern where I wanted to be healthy and alive to take care of my family!

It was all about passion

In the book Rich Dad Poor Dad, Robert Kiyosaki defined passion as a combination of love and anger. I guess I was able to combine my own feelings of anger caused by what was happening to me, and my love for my family, into passion, which finally pushed me to take action.

Let me leave you with a quote from the book “The 4-Hour Work Week” by Tim Ferris which I read several years later but captured in essence what led to that aha! moment for me to take action.

“ Pure hell forces action, but anything  less can be endured with enough clever rationalization.”

How’s my health?

By the way, in a follow-up question I was asked “how’s your health?” I quickly answered that my ex-office mates often say I look younger and stress free when I visit them.

Yes, it’s true! Without the stress and a healthier lifestyle, I can definitely say I have managed my hypertension very well, and even my cardiologist can attest to this.

Up next

In the next part of this series, let me share my answer and additional thoughts about the question “There are different ways to make money in real estate like brokering, flipping, rentals, rent-to-own, buy and hold etc. Which one would you recommend and why?”

I look forward to sharing that with all of you next week.

In the meantime, what is your “aha!” moment?

I’m sure a lot of you out there are also on a quest for financial freedom and are planning to do this by investing in foreclosed properties (which led you to this site). Please share your “aha!” moments, thoughts, and reactions by leaving a comment below. Thanks!

~~~

Photo credit: Aha!! by farleyj, on Flickr

~~~

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

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

Full disclosure: Nothing to disclose.

The "aha!" moment that made me decide to take action towards financial freedom is a post from: Foreclosure Investing Philippines

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As we celebrate and greet all fathers out there a Happy Father’s Day today, I can’t help but look back at what I believe are just some of the most powerful words that caused a paradigm shift in me, when I read the book Rich Dad Poor Dad by Robert Kiyosaki.

In the book, Robert narrated how his two dads’ way of thinking were worlds apart. In chapter one, his Poor Dad, who was actually his biological father, said “The reason I’m not rich is because I have kids.”. On the other hand, his Rich Dad, who was really the father of his best friend Mike, said “The reason I must be rich is because I have kids”.

Blaming others versus being proactive

Think about it for a moment. The Poor Dad was blaming his having kids as the reason he is not rich. Maybe he thinks that because of his kids, he has a lot more expenses, and he can’t save enough money he can use to invest in real estate for example. Maybe he thinks that he has no time left for real estate investing because he has to do his part to take care of his kids, which obviously takes a lot of time.

Rather than taking control of his life, he blames others.

The Rich Dad was totally different. I have a feeling he believes his kids are his inspiration to be the best dad he could be. He loves them so much that he wants only the best for them, and instead of blaming them, they have become the “big enough why” that fuels his passion to become truly rich and financially free. Without this, even one knew how to be rich, it won’t be sustainable.

He was proactive and took charge of his life.

Which would you rather be?

Why I’m glad I have read Rich Dad Poor Dad

At one point in my life, I too felt that I was trapped in the rat race because I became a dad. I felt I had no choice but to face reality that being stuck in the rat race is something that comes with being a father. I believe I had this feeling barely four months after my son was born way back in 2005, and It was just a month after I accepted a job in another company.

The pay was good, but I had to travel to Bauan Batangas almost every other day, and then I had to head back to the office in Makati in the evening. Keep in mind that after all of this, I had to drive home to Provident Village in Marikina back then.

Later on, my staff introduced me to the book Rich Dad Poor Dad, and after reading chapter one, I knew that I was not really trapped in the rat race. I realized that I should never blame my being a father if I was stuck doing something I would rather not.

From that point on-wards, I knew that I always have a choice. It was really up to me to make that choice, which I did.

Now I just have to teach my son CJ what it means to be a Rich dad who is truly rich, so that he himself can become one when he grows up and becomes a father, maybe in 25 years (my wife insists that should be at least 30 years from now) .

I believe the best way is to lead by example.

A Happy Father's Day greeting card from my son CJ (here's the cover)

A Happy Father's Day greeting card from my son CJ (here's what he wrote inside)

Happy Father’s Day!

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

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

Full disclosure: Nothing to disclose.

PS. Facing foreclosure? Tired of being a landlord? Need to liquidate your proprty because you need money? Click here to sell your property fast!

"The reason I must be rich is because I have kids" – a Father’s Day reflection is a post from: Foreclosure Investing Philippines

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After attending the “How to be Truly Rich Seminar” by Bo Sanchez last July 21, 2007, I saw a flyer about the Think Rich Pinoy Seminar that was to be held on the following month.

I was so excited and I hurriedly registered because my wife and I had already read the book “Think Rich Pinoy” by Larry Gamboa about 8 months earlier. We both believed that the book was like an outline on how to apply Rich Dad Poor Dad principles and do foreclosed real estate investing in the Philippine setting. I wanted to learn more!

August 18, 2007 came and it turned out to be a very stormy Saturday, but the flooded streets I encountered on my way to the seminar venue did not deter me from attending. I had a good feeling about this seminar.

I was not disappointed!

Although I was a bit late, I was still able to attend and I met Larry and the rest of the Think Rich Pinoy team.

A stormy Saturday... but the seminar room was full! That's me in the red shirt on the right listening to Larry Gamboa's talk.

I learned about the “desert experience” from Bo Sanchez and how important it is, not just for me, but also for the people around me, especially my son. I Also remember answering a questionnaire that Bo gave to all attendees. It gave an accurate picture of how financially literate I was back then, or the lack of it. Bo also talked about the true purpose of becoming rich. Awesome!

I also saw more examples of investing in real estate in the Philippines through real life real estate deals, not just from Larry, but also from the Think Rich Pinoy franchisees. I wanted to validate what I understood from the book, and I felt I was on the right track.

And then there was also this one thing that happened during the seminar that I shall never forget.

A preview of things to come?

In the afternoon session, seminar attendees played Robert Kiyosaki’s Cashflow 101 board game. I remember that I had already played the board game before, but I was not able to get out of the rat race. (You can read more about cashflow 101 here: Top 7 lessons learned from playing cashflow 101)

That changed however during the game in that fateful day more than 3 years ago. Our team got out of the rat race, in record time(we were the second team to get out), when we simply grabbed an opportunity that came our way in the game and never looked back.

It also helped that the game card we picked was for a truck driver, which meant our expenses were very low, and this really helped us get out of the rat race faster.

It was exhilarating to hear game master Ronald Cagape announce that we got out of the rat race and later on I was congratulated by Larry Gamboa himself!

I shall never forget the words Larry said to me on that day.

“Great work Jay, now you just have to do it in real life.” as he shook my hand.

Our team got out of the rat race! In this picture, we were holding our financial statement and money from the game. (Sorry I forgot my teammate's name and I also lost her number thanks to ondoy)

Was this a preview of things to come? Will I really be able to get out of the rat race for real?!

Of course, getting out of the rat race in the Cashflow 101 game is one thing, but doing it in real life is something totally different… or is it?

You see, last January 31, 2010, I got out of the rat race. But this time around, it was for real.

Yes, it really is possible!

As I look back, I truly believe It was just a matter of believing that it can really be done. Because of the seminar, I was off to a good start!

Now you know why…

Whenever I get the chance, I volunteer to help facilitate the Think Rich Pinoy Seminars. I even bring my own Cash Flow 101 board game to help make sure that there are enough boards for all to play.

I also actively promote the seminar here in Foreclosure Investing Philippines. I believe this is one seminar that I will never regret promoting.

Now I get to share my story

I was invited by Larry Gamboa to speak at the upcoming Think Rich Pinoy Seminar on May 28, 2011, and I look forward to sharing how I got out of the rat race for real.

Let me give you an idea of what I’m going to share. People are known to attend seminars and get to learn new ideas, and do nothing with them. I was also like that before.

But things happen and you just have to believe that it can be done, and you have to start taking charge of your life… and that’s exactly what I did!

I look forward to sharing my story. See you at the seminar!

Photo credits: Jomar Hilario

~~~

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

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

Full disclosure: Nothing to disclose.

PS. Join me at the next Think Rich Pinoy Seminar by Larry Gamboa! Click here for more details.

My Think Rich Pinoy Seminar experience and how it changed my life is a post from: Foreclosure Investing Philippines

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I first learned about the “Matthew Effect” when I read the book “Outliers: The Story of Success” by Malcolm Gladwell. In his book, Gladwell cited stories of successful people ranging from professional hockey players in Canada, to the likes of Bill Gates, and The Beatles,  as examples of how “accumulated advantage” played a big part in the success of these people. I believe the same applies to real estate investing.

“For to all those who have, more will be given, and they will have an abundance; but from those who have nothing, even what they have will be taken away.” ~ Matthew 25:29, New Revised Standard Version

In the first chapter of Outliers, the bible verse above was the very first thing that I heard (I was listening to an audio book version of Outliers), and as I listened further, it all made more sense to me.

In Outliers, Gladwell tries to convince readers that successful people neither achieved success only through sheer hard work, nor did they achieve it all by themselves, but rather with the help of advantages and opportunities from “where they came from”. Successful people used these opportunities to their advantage. In turn, these produced even more advantages and opportunities.

In essence, to those who have (made the most of advantages and opportunities that came their way), more (advantages and opportunities) will be given, thus the term “Matthew effect” in reference to the passage quoted above.

In other words, success leads to more success, and failure (or the lack of success), can sometimes lead to even more failures or continued lack of success.

Obviously, I was convinced by what Gladwell proposed in his book, which in turn has led me to believe that this also applies to real estate investing.

How the “Matthew Effect” applies to real estate investing

Have you ever wondered why some people who venture into real estate investing seem to have more success or were able to achieve it faster than others? Sometimes I also find myself asking the same question. I now have a more concrete answer, thanks to Outliers. Let me offer the following examples on how I got started with my own real estate investing career.

The “opportunity” to learn and be financially literate

What if an aspiring real estate investor just happened to learn about the importance of being financially literate and took concrete steps to manage his money properly?

I believe that pretty soon, he will have a little bit of extra money, which can eventually grow big enough for him to actually acquire his first real estate deal.

His advantage is his growing financial literacy.

His opportunity that led to this advantage is the opportunity to learn about the importance of managing money and his personal finances.

That could have come from a book, a seminar, or even from a friend, as the case may be.

In contrast, someone who wants to be financially free, but falters in managing his personal finances, may find it very hard to move forward. He never gets past the question:

”Where do I get money to invest in real estate, I can barely manage to get through a month and I’m living paycheck to paycheck?!”

This question lingers in his mind even though he is moving up the corporate ladder.

His disadvantage is he does not know that more money is not the solution, managing money properly is.

Actually, the person I described above was me. The opportunity that I was missing then was the chance to learn about financial literacy, and the proper way to manage money.

I had nothing (in terms of financial literacy), and even what I had (my monthly paycheck in this example) was taken away, or it was mostly gone before the next payday.

I’m just glad the opportunity to learn about financial literacy eventually came through a friend, who introduced me to the book “Rich Dad Poor Dad” by Robert Kiyosaki.

After I read the book, I was hooked, and I looked for more knowledge about financial literacy. This gave a jump-start for my quest for financial freedom.

I truly believe that financial literacy is a big advantage when you want to go into real estate investing.

In fact, I also believe that it is required!

How would one be able to manage the financial aspect of having investment properties, if one cannot even manage his own finances?!

The opportunity to be financially literate is available for everyone, but I guess very few people actually take time to learn about it, and apply it in real life.

The “opportunity” to learn how real estate investing can be done in the Philippine setting

This time around, the “opportunity” began with an “incident” that happened last December 31, 2006.

I was in a drugstore and I was about to pay for my medicines when my wife called me on my cellphone because I had to move my car. I hurriedly went back to the car and as I sat on the driver’s seat, a soft cracking sound came from my pant’s rear pocket.

Apparently, I had put my cellphone there instead of my wallet. I had just destroyed my phone’s LCD.

Anyway, because of that incident, I decided to go to Nokia Care at Greenbelt 1 to have my phone fixed. After I got a quotation and a referral to another Nokia authorized service center who might have parts readily available, we went to National Bookstore which was nearby.

As I entered, the first book that got my attention was “Think Rich Pinoy” by Larry Gamboa.

Larry’s book was an eye opener, it showed how real estate investing can be done in the Philippine setting. I believe this was a big advantage and opportunity.

Reading the book eventually led to my attending Bo Sanchez’ “How to be Truly Rich seminar“, from where I learned that Larry also had Think Rich Pinoy Seminars which I also attended.

This also made me look for more seminars about real estate and I found Urban Institute’s Comprehensive Real Estate Seminar And Review (CRESAR) for the November 2007 Real Estate Brokers licensure exam which I also attended.

Although I attended primarily to learn more about real estate in the Philippines, I also took and passed the licensure exam and became a licensed real estate broker.

I also became a member of REBAP Marikina and through another member, I learned about an auction during the first Philippine Real Estate Festival way back in 2008. I participated in that auction and it was the first time I made a winning bid for a foreclosed property. As they say, the rest is history.

I would like to believe what happened to me was a series of “opportunities” which I grabbed, that helped me get started with real estate investing.

To have more and be given more, or have the little I had be taken away

I started with virtually nothing in terms of any know-how when it comes to investing in real estate, and instead of thinking that it was too hard and cannot be done, I decided to look the other way and move forward.

When I decided to become a real estate investor and began to have more knowledge about real estate investing, I was presented with more  opportunities, not just to learn, but to actually have the means to do it.

In contrast, if I went the other way, the little that I had would have been taken away, not by anyone else, but by myself. I would have taken these away, had I decided to give up.

Up next in Part 2 of this series

In the next part of this series, I’ll share more examples of opportunities that anyone can grab that can help get them started with real estate investing, and how this continues and becomes a series of opportunities that become “accumulated advantages”.

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 Investing Philippines facebook page

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

PS. New visitor? Click here to get started with learning more about foreclosure investing in the Philippines.

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!

The “Matthew Effect” and how it applies to real estate investing (Part 1) is a post from: Foreclosure Investing Philippines

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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

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I suppose all of us have an idea on being proactive, unless you have been living under a rock. We often hear it, but do we really know what it means to be proactive? How can we apply this to real estate investing? Read on to find out just some of my ideas on how we can all be proactive real estate investors.

Definition of proactive

Wikipedia defines proactive behavior as follows:

“Proactive behavior (or proactivity) by individuals refers to anticipatory, change-oriented and self-initiated behavior in the work place. Proactive behavior involves acting in advance of a future situation, rather than just reacting. It means taking control and making things happen rather than just adjusting to a situation or waiting for something to happen. Proactive employees generally do not need to be asked to act, nor do they require detailed instructions.”

In his book “The Seven Habits of Highly Effective People”, Doctor Stephen R. Covey defines it as something more than just taking initiative, as it means that we are ultimately responsible for our own lives. We behave based on our decisions, not based on the conditions around us, where we take the initiative and the responsibility, and make things happen.

For me, it simply means we always have a choice, and through the choices we make, we are giving ourselves the ability to respond accordingly to whatever comes our way, and that includes the challenges that we face as real estate investors.

We cannot blame others because everything is a matter of choice and these choices dictate our ability to respond, and not just react.

Rich Dad was proactive

In the book “Rich Dad Poor dad” by Robert Kiyosaki, Rich Dad’s way of thinking where he forbade words like “I cannot afford it…”, and encouraged words like “How can I afford it?” was really a perfect example of being proactive. He wanted Robert and Mike to make a choice to find ways and the means, rather than just blame the lack of money.

Proactively investing in real estate

In real esate investing, there are countless ways of being proactive. I would even look at being proactive as a prerequisite as I believe that it is needed at the very start of one’s real estate investing career.

The mindset of believing that real estate investing can really be done here in the Philippines and taking the initiative to do what needs to be done to turn this into reality is being proactive. Deciding and taking action is being proactive. If you want to start, I encourage you to first learn the habit of being proactive.

Examples of being a proactive real estate investor

Here are just a few examples of being proactive when it comes to real estate investing

When looking for suitable foreclosed properties

Instead of saying “If only there were really cheap properties that can produce positive cashflow…” why not ask “How can I find properties that can produce positive cashflow?” Why not take charge and analyze more properties instead of giving up after looking at just a few listings of foreclosed properties?

Instead of saying that “If only ejecting tenants was easy and not costly…”, why not avoid properties that are occupied to begin with? There are just too many unoccupied properties out there and the proactive thing to do would be to decide to focus only on unoccupied properties.

We should take the initiative and set the criteria for properties that we would be looking for, along with the options that we can take.

When buying a foreclosed property

When we intend to buy a property using our own money, we can take proactive steps like making sure that the numbers work, checking the physical and legal condition of the property, finding out what we can or what we can’t do, with regards to our contract with the bank, finding out if we can we assign the contract, finding out exactly what taxes do we need to pay, what expenses are for the account of the bank and for the buyer, etc. This is part of due diligence and doing due diligence is really being proactive.

When dealing with contractors

Proactively ask for quotations from several contractors before you even consider buying a foreclosed property. Check for their track record by talking with other investors who got their services in the past, and look at their past projects, etc. Make sure everything is itemized and as detailed as possible in a written agreement that gives you more than adequate protection.

When paying for a foreclosed property

Proactive steps to take when paying for a foreclosed property would be through post-dated checks, ensuring the checking account is funded accordingly, and replenishing the post-dated checks before they run out. This prevents surprises that might happen if due dates happen to fall on holidays or if a typhoon has made it impossible for you to pay over the counter.

When investing on other people’s deals

Whether we are looking at partnering with an investor as an equity partner or just funding other people’s deals by loaning them money, we should take the initiative to check if a deal really makes sense, if we can really get the return of our investment(the return of our capital), if it can produce the returns being promised to us(the return on our investment), and making sure all parties are more than adequately protected through a contract that is duly notarized.

We should also take the initiative and check the track record and the credibility of the person asking us to invest in his/her deal. We can ask for feedback from other people, who have invested their money in the past, or you might even consider asking for an NBI clearance, one can never be too careful right?!

Accepting that you made a mistake

Being proactive also means being able to accept that you have made a mistake, accept that one cannot change past mistakes, and move on and just keep moving forward. I suppose the only thing one can do is take action to correct things which are still within your control, learn as much as possible from the mistake, and take steps to avoid such mistakes in the future.

How about you, do you have anything in mind that is a good example of being a proactive real estate investor? Please share them below. Thanks!

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. Are you a new visitor? Click here NOW to start learning more about foreclosure investing in the Philippines

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. Inbox getting full? Subscribe through my RSS Feed instead!

How to be a proactive real estate investor is a post from: Foreclosure Investing Philippines

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In my recent post entitled “If you hate rich people, then you just might never become rich“, I received a set of very thought provoking questions through the comments section, and I would like to share them here, along with my answers, which can already be made into an article by themselves. Here are the questions…

Hi Jay,

We keep talking about rich and poor, but have we defined who are rich and who are poor?

Mayaman na ba ako kung makawala ako sa rat race (office work), at mapunta sa sariling negosyo that I personally manage at nag spend ng time na double pa when I was in the Corporate world? (Am I rich if I am out of the rat race, and have my own small business that I personally manage where I spend double the time I used to spend when I was in the corporate world?

Am I rich only if I belong to the taipans?

Am I poor even if I earn passive income of only 200K monthly, but still have four kids to send to school?

Kelan ako mayaman, at sasabihin ko sa sarili ko na I can retire without expecting financial help from my kids.(When can I say I am rich, and I can say to myself that I can retire without expecting financial help from my kids.)

Thanks and regards,

Here are my answers…

Let me share my answers to Godeng’s questions below…

Hi Godeng,

Thank you for the comment, the timing is perfect as I am trying to learn as much as I can right now on how I can turn real estate investing into a worthwhile business and as a vehicle to help achieve financial freedom for my teammates.

Being “rich” would actually depend on how we define it.

I would start by giving my own definition of being “truly rich” which is synonymous to being “financially free”. I would say that I am rich if I am able to fulfill all of my obligations and provide the needs of my family, without the need to have a 9 to 5 job.

I know that I would still not be rich even if I were able to build a real estate business that can earn more than enough, but would earn nothing the moment I stop doing the various tasks needed by the business to work. Such business that will not work without me is not really a business I own, it’s just a job which I would happen to own.

My example above is the kind of business I would rather avoid as it is even worse than being an employee, because I would end up doing so much more work and spend so much more time, just to make the business work.

If we are able to create a business that works, even without us, where we own it, but don’t need to run it, as it has been setup in such a way that it will work even without us, and it earns for us more than enough to sustain our family’s needs, then we can say we are “truly rich”.

I believe that if the same setup was done to your “negosyo”, where it works even without you, then you can say you are already rich, as long as it truly earns passively, and it would not matter if you had to send four or forty kids(or more) to school as long as your “negosyo” earns more than enough, and you can even retire without expecting anything from your kids.

I guess the question that needs to be answered is “What can I do so that my business/negosyo can work without me?”

I’ll expound on this further through another article.I would love to hear your thoughts on my answers above. Thanks for dropping by! Cheers!

… and some more thoughts on being “rich”

Other definitions of being “rich” or “Wealth”

Other definitions for being “rich” might include putting a value on the amount of money or wealth one might have. We’ve all heard of words like millionaire, multi-millionaire, billionaire, etc. Some might even consider the currency used as a millionaire in the Philippines in Philippine pesos is obviously not yet a millionaire in terms of US dollars.

Again, I would rather stick  to my definition above which is actually based on Robert Kiyosaki’s definition in his book “Rich Dad Poor Dad”  where he described Wealth as a person’s ability to survive so many number of days forward. In other words, it is how long you can survive beginning from the moment you stopped working. How long would depend on one’s expenses, the amount of money saved, and the amount of money coming in through passive income.

A true business owner

To be a true business owner, I believe that you should be someone who owns systems that make the business work, and you have people that run the systems for you. This results in a business that can run even without you. This would also apply if one wants to turn real estate investing into a real estate business. As I said above, I will expound on this further through another article.

Time freedom is the key

Ultimately, I believe that being rich is not just about the amount of money you make but is also about the time freedom that comes with being able to earn money passively, so that one can live life to fullest! One need not spend most of his/her time to make a living if one has more than enough passive income.

I see this as a perfect introduction to my next post which is part 2 of my article about passive income which I shall publish this week (See part 1 here). Sorry for the delay, I just had to make sure things are back to normal for foreclosurephilippines.com. It would be pointless if no one can access the site right?!

To our success and financial freedom!

Jay Castillo

Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Mobile phone (Call/SMS): +639178843882
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. Are you a new visitor? Click here NOW to start learning more about foreclosure investing in the Philippines

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. Inbox getting full? Subscribe through my RSS Feed instead!

How do you define being "rich"? is a post from: Foreclosure Investing Philippines

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A guest post by Sha Nacino

For the past few weeks, I have been on a six-day work week. This set-up really drained my energy. Most importantly, it made it impossible for me to go home to our province, a 10-hour bus ride from Manila. I miss my family so much! How I wish I could go home and see my family as often as I want.

Last Saturday and Sunday, I had no work – a very rare chance! I wanted to go home to our province but I was already so tired, physically and emotionally. I just decided to have a laidback weekend where I could relax, sleep, eat, read, think, and write.

Image by Sha_Nacino

As I was reflecting, I noticed that there are so many interesting activities outside the confines of the corporate world. There’s toastmasters, a public speaking club that will help you develop your communication and leadership skills. There’s swimming, which is a good way to beat the heat. There’s travelling. Photography. Badminton. Running. Jogging. Volunteer work. And many more!

I engage in all these activities and more! You could just imagine how physically taxing that was.  Not only that, some of these interests could be expensive too!

I couldn’t juggle everything!

I want to do everything! Yet, I don’t have all the time and money to pursue everything at the same time. I have to cut down on some of these activities. Guess where most of my time goes? Yes, to my work because I spend at least 11 hours a day 5 days a week in the office (inclusive of travel time).

Does my work make me happy? Let’s just say that I love a lot of things about my employer – the culture, the people, the activities, its corporate social responsibility projects, its personality development programs, and interest clubs.

But if money were not an issue, I would definitely be somewhere else. Yet, I cannot resign just yet because my work is my bread and butter.

I need more time and money!

I want to have more time and more money at the same time.  I want to have as much time as I want to spend with my family and loved ones. I want to have more time to do volunteer work. I want to have more money to help our less fortunate countrymen. And I also want to have more money so I can do the things I want to do.

If I work overtime, I could increase my money but this also means less time for my family and other important things in life. How could I have more of both time and money?

What my mentors taught me

My mindset was limited because I knew only of one way to earn money – that was through my job in the corporate world. If I wanted to have more money, I needed to work overtime.  I need to work hard for money!

Then I met my mentor Robert Kiyosaki through his book “Rich Dad Poor Dad”. I was shocked when he said that I could earn as much as I want even without working! He termed this as passive income. He also advised me that instead of working for money, I could make money work for me.

Wow! I felt so liberated! If I could learn the art of earning passive income and of making money work for me, then I could have more time to spend with the persons that matter to me most and I could also have more money to use to help others.

When the student is ready, the mentor will come

Last August 2009, I attended the Think Rich Pinoy Seminar of Larry Gamboa, author of “Think Rich Pinoy”, “Grow Rich Pinoy”, and co-author of Trace Trajano in “Think Rich Quick”. This got me really interested in real estate investing.

I guess I was ready to learn more about real estate because a few months back, I met my real estate mentor Trace Trajano. Trace taught me and my team how to invest in real estate with little or no money down. Trace conducted his first ever Think Rich Quick seminar in March 27, 2010. After learning from Trace’s teachings, my team was able to sell a condominium unit in just six days! Trace is really a fantastic mentor!

Dedicated to your success,

Sha Nacino

Sha Nacino is Trace Trajano’s co-author for the book “Think Rich, Yuppies!”. Sha was also a former teammate of mine in the now defunct RYP Realty team.

Added on September 20, 2011:

Sha Nacino NOT connected with Trace Trajano

by Sha Nacino

This is to inform everyone that I am NOT anymore connected with Mr. Trace Trajano. I do not endorse him or any of his seminars and programs. I also do not intend to do any business with him moving forward.

We co-authored the book Think Rich, Yuppies which was published earlier this year. The book is our last project together and after the initial printed copies of the book are sold, the book Think Rich Yuppies will no longer be printed and distributed.

I have moved on. At present, I am writing books on personal financial management. I am also committed to continue writing many more books on financial management and other topics. If you have any comments, please email happysha.ph@gmail.com.

Source: http://seminarphilippines.com/2011/09/sha-nacino-not-connected-with-trace-trajano/

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Jay’s thoughts

In a nutshell, Sha just wants to be financially free, who doesn’t?! I totally understand where she is coming from as I used to be as busy as her, if not even busier. I am happy for Sha because she decided to take action and make concrete steps to be financially free.

Good luck Sha and to everyone on the same journey!

Added on September 20, 2011 - I’m also happy to see that you have also moved on, just like me, as mentioned here.

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. 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. Inbox getting full? Subscribe through my RSS Feed instead!

A busy yuppie that wants to have more time and money is a post from: Foreclosure Investing Philippines

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