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Pre-auction bids – Another Lesson Learned

Last week, I felt disappointed because I found out that all of the small condo units (22 sqm) in the upcoming UCPB auction were already sold out, even if the auction was still 3 weeks away. It turns out that Century Properties Management Inc. (CPMI), the one handling the auction for UCPB, had accepted pre-auction offers with 5% markup on the minimum bid price.

Sign Of The Times - ForeclosureImage by respres via Flickr

They numbers looked good

I was really looking forward to bidding on those properties as they appeared to be good deals based on the cost of Php14,000/sqm or about Php308,000 per 22sqm unit. At this price, the monthly amortization would be around Php3,800.

These units would have rental income ranging from Php8,000 to Php10,000, according to the account manager from CPMI. That translates to a positive cash flow of around Php2,200 to Php4,200 per month [assuming other factors like property management costs, maintenance, etc. amount to Php2,000 per month].

The passive income could actually be higher if a contract of lease w/ option to purchase (rent-to-own) scheme was put in place instead.

My only consolation

I was somewhat consoled when a CPMI agent told me that the units were sold to individuals/families who have been waiting for the past year for the units to be up for sale. Maybe they really deserved to have those properties.

Anyway, there’s more than enough properties out there for everyone.

Nevertheless, I have learned from this experience that I should stop procrastinating and also stop being too complacent.

I should have called the day the ad came out and asked if they were accepting pre-auction offers, even if it was not written in their ads.

Taking immediate action is the key to avoiding missed opportunities and this is one perfect example.

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About Jay Castillo
People encounter problems and make mistakes when buying foreclosed properties, and Jay wants to help people avoid those problems/ mistakes. Jay encountered a lot of those, which is why he started this blog in 2008 to serve as a guide where he shares lessons learned, and how to overcome challenges you may encounter when investing foreclosed properties in the Philippines … [Read more]
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