Category: real-estate

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Interview with Foreclosure Investing Expert — Jay Castillo

In my continuing effort to address your overwhelming request to feature true-to-life success stories to help inspire you in your journey to financial freedom, I am very honored to share with you my interview with one of the most influential foreclosure investing experts in the Philippines, my good friend Jay Castillo.

Jay Castillo, made his dreams happen – to become financially free. A few years ago, he was a busy IT manager working his way up to the corporate ladder. At one point in his life, he was really frustrated spending hours and hours working at the office and going through the frustrations faced by employees. He realized that the stress from his job was literally killing him.  That’s when he decided to do something about it for the sake of his loved ones. After reading Rich Dad, Poor Dad by Robert Kiyosaki, he was inspired to learn how to do real-estate investing.

He attended seminars, seek out mentors and built his now very popular blog Foreclosure Investing Philippines at foreclosurephilippines.com. After only a few years, he is already financially free. He was able to quit his job and work full-time on his real-estate business, that is investing in foreclosed properties. Without further ado, here’s my interview with Foreclosure Investing Expert — Jay Castillo.

1) Can you give us some background on what you did for a living before you got involved with real-estate?

I was the MIS department head for a multinational company. I have been in the IT field for more than 13 years and I worked my way up the corporate ladder from being an IT staff, to DBA, to Network specialist, supervisor, and to Manager.

2) What made you decide to pursue financial freedom by investing in foreclosed properties?

It just made perfect sense to invest in real estate and foreclosed properties appeared to be the niche with the most number of properties available out there. As to why I decided to pursue financial freedom, this article pretty much covers everything: http://www.foreclosurephilippines.com/2009/04/foreclosure-investing-is-not-really.html

3) What were the 3 biggest obstacles you had to overcome when you decided to pursue real-estate investing?

1. Lack of financial literacy – Some would say it would be lack of money but I would say it really is just lack of financial literacy. After I started to manage my finances, I started to have a positive cashflow, even though I only had income coming from my job. This is where I got money to invest not just in foreclosed properties, but also for my education.

2. Lack of time – It’s funny that we all have this excuse of lack of time, but when something drastic happens, like when I had to go to be rushed to the hospital, and eventually got diagnosed with hypertension at such a young age, I suddenly realized what things are more important to me, and I MADE TIME to for them. I stopped wasting time on unimportant things like TV, unproductive use of the computer for gaming, I no longer did overtime at the office where I focused instead on getting things done through automation, delegation, etc. I was able to set aside time to learn and do real estate investing.

3. Distractions – There were so many distractions like negativity, doubts, and fears, not just from the people around me, but also from myself. It really helps to have people who have the same goals in life to be around you as they help cancel out the negativity form “well meaning” people who really don’t have a clue what you are doing, and why you do it. Another form of distraction are those unproductive things like watching TV, reading too much newspapers, and a lot of those things that can be delegated or outsourced. For example, we hired a maid to take care of household chores, this alone freed up so much of my time and helped me focus on things that are more important.

4) Can share with us the story on how you finally achieved financial independence?

It was really just a combination of getting other income streams from real estate investing and internet marketing, learning how to manage my finances and stop spending on liabilities, and also practicing “delayed gratification”. It is also very important to “simplify” and lower one’s expenses. It just came to a point where I realized that my expenses can already be covered by income other than that from my job, and that gave me the means to quit my job, and go full time with real estate investing, and internet marketing.

5) How did you get started with internet marketing?

I started to take internet marketing seriously with my blog http://www.foreclosurephilippines.com . Initially, it was just an experiment, as I was looking for a way to have all my foreclosed property listings accessible from anywhere, through the internet, from my PDA, eliminating the need to bring the actual classified ads with me. I remember that during that time, I have just finished helping facilitate an internet marketing workshop of Jomar Hilario in Cubao, courtesy of an invitation from Thea Santos (Thea was the one in charge of Think Rich Pinoy Club Marikina, where I was a member back then), and I said to myself I might as well create a blog for this purpose. Aside from listings, my wife and I started to document lessons learned (our very first was about the auction of tax delinquent properties in Marikina), and people started to follow the blog and I guess the rest is history.

6) Which is better, real-estate investing or internet marketing? And why?

Personally, I am becoming more biased towards internet marketing because the passive income potential is so much more because of the global reach, physical boundaries are virtually non-existent. In contrast, with real estate investing, I prefer to invest in properties that are nearby, and that somewhat puts a limit on where I can invest. Of course there are ways for me to expand my real estate investing like partnering with other real estate investors, but this is turning out to be more complicated as compared to internet marketing. Furthermore, even if one invests in rental properties, I believe hiring a property manager at a certain point is needed for it to remain as truly passive income, I guess I’ll cross the bridge when I get there, so to speak. Nevertheless, I truly believe that internet marketing and real estate investing can have synergy. In fact that’s exactly what I am doing right now.

7) What is the most important habit you’ve learned that has really helped you in your journey to financial freedom?

One needs to have a big enough why that would help sustain one’s drive to be financially free, and I suppose one of my habits in relation to this is I ensure that I always remember why and for who I am actually doing all of this. I try my best to make all my decisions with this in mind. This habit also helps me become very disciplined in just about everything that I do, and this has made a world of a difference.

8) What 3 tips can you give to our readers who are also dreaming of someday being able to leave the rat race and achieve financial freedom just like you?

1. Start with a plan. In it you write your objectives(your vision), your purpose(or mission), your roles and goals, your principles (the non-negotiable’s), and your values. You also need to include the actions you need to do in order to accomplish your goals, make sure these are broken down into “S.M.A.R.T.” tasks (Specific Measurable Achievable Realistic Timebound). This may sound daunting at first. Looking back, I am very thankful that I did make a plan like this using an excel sheet and it was specific enough that it was like a checklist where each task accomplished will lead me closer and closer to my goals. This is very much like creating a business plan and I created mine early 2007!

2.  It’s all in the mind. You need to believe that it is possible. Think of it this way, what if your life or the lives of those you love depended on it, don’t you think you can actually do it?! It was like this for me, I strengthened my belief that it really is possible and there is a better way, especially after realizing my work(too much stress doing the work of 3 people) was killing me and I always had a choice what to do. I also believe in the following: “Whether you think you can or you can’t, either way, you are right” – Henry Ford

3.  Just do it. No one learns how to swim just by reading about it, etc, you really need to get into the water and start swimming. Sure you may swallow some water along the way, but that’s part of learning, just make sure you don’t drown. No one learns how to ride a bicycle by reading about it, etc, you really need to get on that bicycle and get your feet on the pedals and start riding. Sure you may fall many times, but that’s part of learning. Just make sure you don’t get hit by a car. No one learns how to drive by reading about it, etc,you really need to get behind the steering wheel and start driving. Sure your engine may stall at times and die, but that’s part of learning, just make sure you don’t crash and get killed. The same goes for striving to be financially free, you can’t just read about it, you really need to do it! Sure there will be problems along the way, but that’s part of the journey. Just make sure you apply what you have learned from others, fo llow your principles, values, and have good old common sense!

 

Cheers!

Allan

P.S.   Dear Readers, I hope you learned something new today and realized that financial freedom is indeed possible.  My hope is that you get closer and closer to it every day.

P.P.S.   Quick update on the launching of my Rich Money Habits guide ebook — I have both good news and bad news for you.  Bad news — all 10 slots for my special bonus to get a chance to play Cashflow 101 board game with me and my wife live have already been taken.  If you’re one of the lucky 10, you will receive an email invitation from me in the next few days with the event details.  The good news — I’m extending the 50% special introductory price discount to those of you who haven’t claimed your discounts yet.  This extension is available until end of this week only.  After this week, the price will now go up.  Hurry, get your copy of my guide now!

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Investing Personal Finance real-estate Story

Interview With Millionaire Real-Estate Investor Eden April Alemania-Dayrit

Hey guys! First off, I’d like say THANK YOU SO MUCH for the overwhelming response to the recent Rich Money Habits survey.  I am learning a lot from your feedbacks. Rest assured, I am going through each and every one of your responses.  This way, I get to understand what kind of financial information you are looking for so I know how best to help you. So keep them coming! 🙂

In fact, I have already gone through some of your feedbacks and a lot of them are requests to have more features on real-life inspirational people or leaders who set good examples in building wealth. 

To give you an idea, here are some of the responses to the survey question “What improvements would you like to see in the Rich Money Habits Series?”

“I would like to read about real life experiences of those who have successfully implemented the habits to wealth”
                                              – from Rod of Gensan, Philippines

“More examples of true to life stories. Testimonies.”
                                              – from Leo of Manama, Bahrain

The really great news is we have a very timely feature for your today to address this overwhelming request from our readers.  Lucky for you, I managed to get hold of the young real-estate investor millionaire, Eden April Alemania-Dayrit for an interview here at Rich Money Habits. 

I met Eden last year when my wife and I tried to invest in a private-lending deal for a real-estate property.  We partnered with Eden on that deal.  We have since gotten back our investment with the agreed upon interest income and we are very very happy with the outcome.  Through that deal, I have known how trustworthy Eden is, and that’s why I am very happy to have Eden featured here at Rich Money Habits. 

Without further ado, here’s my interview with Eden April Alemania-Dayrit.

1)  Tell us a little bit about yourself.  What were you busy with before you discovered real-estate investing?

I am a chemical engineer by profession who worked for semiconductor companies handling sustaining operations in manufacturing lines. Thinking that I will be an employee in the long run, I took up a master’s degree in Electronics Engineering. But on the last semester of the course, I decided not to finish it because that was when I began investing in real estate.

2)  What made you decide to get into real-estate investing and how did you get started? 

I got into the stock market and got burned in the mid-2007 market crash and hadn’t recovered. My boyfriend then (now my husband) and I partnered in a dimsum food stall in the place of his employment that later on included a waffle cart. It lasted for 6 months and we realized that food business is not our forte.

While still employed, I read books like Rich Dad Poor Dad and Think Rich Pinoy. These books inspired me to look beyond employment and pursue the path of entrepreneurship. We bought our first piece of real estate — a condominium unit in Taguig where we now live in. To save on acquisition cost, I applied as an agent. Little did we know that it was our spring board in our real estate career.

If I didn’t know how to cut my losses on other businesses early on, I wouldn’t have been in real estate investing.

3)  Can you share with us the story of your first real-estate investment property?

It was a Quezon City townhouse. We bought it from a bank at 50% off market value through an auction and paid a downpayment of 20%. It was then sold at 70% market value on a flexible term scheme (rent-to-own) after 7 weeks of acquisition.

4)  Can you give us an idea about the process you go through before you decide to invest in a real-estate property?

The real estate investing process is actually very simple. Find, fund, fix, sell then profit. But the real issue that most people have a hard time on is the thought process and deciding when to actually jump. I did the unthinkable — I quit my stable job. And that made it easy for me to decide to pursue the first property because I basically put everything at stake. It was a "now or never" decision that pushed me to do well. (Though I don’t advise people to do the same because that decision also had repercussions like I couldn’t take on a loan because I didn’t have a job that the bank requires to have that forced me to take on investors at the very beginning.)

5)  What’s the most important habit you’ve learned so far that really helped you in your real-estate investing?

I learned to listen to mentors. I am a stubbornly independent person and I find it hard to do things if I don’t do them my way. But when I agreed to be under my mentors’ wing, I had no choice but to follow because I believed in what they taught me. I listened intently until I learned the ropes in real estate investing. Until I learned it well, I then improvised. I still am stubborn, but I use that trait to stubbornly pursue the deals that I am getting into.

6)  If you can start your real-estate investing all over again, how would you do it differently, and why?

I’ve made a few mistakes along the way. Sometimes I wished that I could’ve asked for a higher price for a property or wished I didn’t buy a certain property. I sometimes thought that I should’ve set my criteria higher in selecting tenants. But these things were easily remedied and didn’t hurt a lot because I’ve set contingencies too. So if I could’ve done it all over again, I will still do what I’ve done because the small mistakes made me a better real estate investor now.

7)  Why do you think you’ve succeeded in real-estate investing at such a young age while many others struggle to even get started?

I’d say that age doesn’t have to do with it. It just so happened that I started earlier.

The main factor that hinders a lot of people from succeeding is one’s mindset. I always say that every basic thing that you need to know about real estate investing are all in the books. And you will learn along the way some techniques that will be useful. But all these will go to waste if one’s mindset is not on the right track.

This may sound funny but believe me, work on your mindset, get educated on the business and everything will fall into place.

8)  What advice can you give to our dear readers who want to get into real-estate investing?

I get a few questions like, “We are looking at the same lists in banks and newspapers, how do you spot good deals?” I’d always say, start by familiarizing yourself with the prices of properties for sale or sold in your own area or the area you want to focus on. Walk around the neighborhood and ask around, network with brokers and look at online sites where these properties are posted. Naturally, the opportunity will present itself in the form
of undervalued properties for sale or of neighbors seeking your help in selling their property.

I describe myself as a perennial student because I continually enroll in classes for self improvement. Invest on yourself by attending courses or seminars specific or supplementary to real estate investing.

Seek mentors. Accelerate your learning curve by asking questions or partnering with someone who have done what you want to do.

Lastly, be persistent. Do not stop at the first sight of failure. At 24, I overcame barriers and accomplished a feat that I haven’t even dreamed of myself–all because of my persistence, and I’m sure you can too.

 

More about Eden: Eden specializes in real-estate investing through rent to own properties and dreams of helping create 1 million millionaires by 2020.  You can checkout her website at http://renttoownproperties.blogspot.com/ to find out her growing list investment properties.  If you’re searching for a house you want to invest in, Eden highly recommends checking out http://www.bahayatbp.com.

 

P.S.  Dear readers, I hope you enjoyed Eden’s story as much as I did and learned something that you can apply into your own situation.  Have you tried investing in real-estate?  How was it?  What other tips can you share based on your experience?

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real-estate

Money Summit and Wealth Expo Series: Real-Estate Investing

This is part 1 of a 3-part series on the money lessons I’ve learned from the recently held Money Summit and Wealth Expo seminar.  This series will cover the 3 ways to grow your money: real-estate investing, stock market investing and building a business.

  • Part 1 – Real-Estate Investing 
  • Part 2 – Stock Market Investing
  • Part 3 – Building a Business

Real-Estate Investing

 

During the Money Summit and Wealth Expo, I was lucky to learn from 3 very successful real-estate investors: Trace Trajano, Eden April Alemania-Dayrit and Noli Alleje.  Read on as I share to you those lessons so you too can start building your riches through real-estate investing.

 

Trace Trajano

Best-selling author of Think Rich Quick and Real-Estate Guru

 

Trace Trajano is widely regarded as the author of the best-selling book “Think Rich – Quick”, which he co-authored with Larry Gamboa.  He, along with Larry Gamboa share a dream to create 1 million Millionaires by year 2020.  This is a huge and audacious goal but with millions of dollars in successful real-estate investments and several students coached who are now millionaires, this is a dream not far from reality. 

According to Trace, real-estate is a good investment mainly for 4 reasons: income, equity, appreciation and leverage. 

  • Real-estate gives you income in terms of capital gains when you decide to sell the property or monthly rental from your tenant in case you rent it out. 
  • As you pay down the amortization, you build equity for the property.
  • Appreciation means as the price of goods increase due to inflation, the value of your property generally rises with it. 
  • Lastly, real-estate gives you the leverage to acquire a property even with only 10% down payment. 

Trace also warns about the risks in making money through real-estate.  He mentioned about the condo craze where everybody is buying pre-selling condos.  The reason he does not encourage buying a pre-selling condo is because it is subject to market fluctuations.  Real-estate markets can go from boom to bust in a few years.  Your money is also tied up for 3 to 5 years and therefore not working for you during this period.  He said, it is even more dangerous to use your life savings and securing a bank loan because you risk losing everything.  The bank can go after everything you own if the deal does not turn out to be as good as you’re hoping for.

Another risk you can encounter when you invest in real-estate is getting a bad tenant when you decide to rent your property out. Without effective screening of tenants and proper property management, you can risk getting a “tenant from hell”.  A tenant who is not only good at avoiding paying your monthly rentals but even better than your lawyer in taking advantage of every loophole in the law so you cannot evict him.

To mitigate these risks, Trace suggests  to learn the real-estate business first through Affiliate Real Estate Marketing.  When you do Affiliate Real Estate Marketing, you basically sell another person’s property first.  When you successfully sell the property, you get extra income through commissions.  When you are not able to sell the property, you would still end up building your buyer’s list without losing money since the property is not yours anyway.  When you go through the process, you will learn more about the real-estate market.  You will know what properties are selling hot in an area and what’s not. You get to work in the real-estate business without risking your own money in a property.

According to Trace, the goal of a real-estate investor is to make money from the property, NOT necessarily to acquire the property.  To achieve this goal, one simply has to find a qualified buyer, understand his needs and financial capabilities, and find the right property that fits his needs. 

This is where Trace’s eXtreme marketing comes in.  To do extreme marketing, you need to ask 3 things:

  1. Who is your target market?
  2. What is your compelling message?
  3. What is your medium?

Who is your target market?  What are their needs? Why will they pay you the price?  Landlords for example are mainly concerned with ROI and cash flow.  End buyers normally focus more on the down payment and the monthly amortization. 

What is your compelling message? How will your message stand out?  What will compel prospects to call or contact you? You need to consider your target market when you formulate your message.  Know what’s important to them and deliver that message.

What is your medium?  Will you do online marketing? Or will you do offline like handing out flyers, posting bandit signs and the like?  Are people in your target market even logging in to the internet? 

These are important questions you need to ask yourself when you decide to do extreme marketing to sell your property.

 

Eden April Alemania-Dayrit

Rent-To-Own Specialist

Eden is the fastest and youngest millionaire Think Rich Pinoy franchisee.  She specializes in rent-to-own deals.  To this date, she has already bought and sold more than a dozen houses in just 2 years.

According to Eden, one can earn from real-estate in 3 ways: wholesaling, retailing and rent-to-own. 

  • Wholesaling is when you buy a property at way below (e.g. 60%) market price.
  • Retailing is when you do some renovations, flip the property and sell it for a higher price. 
  • Rent-to-own, also known as lease with option to purchase offers the tenant the option to own the property once fully paid. 

You can also earn through real-estate by becoming either a passive investor or an equity partner.  When you’re a passive investor, you earn a guaranteed 8 – 12% annual return.  You basically lend money to acquire the property.  As a return, they give your money back along with the interest after a few months.  When you decide to become an equity partner, you share in the profit like splitting it 50-50, but you also share in the risk in case the property is not sold or you get a bad tenant. 

The basic formula for investing in real-estate is Find – Fund – Fix – Sell – Profit. 

  1. Find a great property that’s below market price. 
  2. Fund it by using other people’s money through passive investors or equity partners. 
  3. Fix it by doing renovations to make it ready for occupancy. 
  4. Sell the property to your target market. 
  5. Profit from the property when you’re able to sell the property at a price higher than what you originally paid for it even after factoring in renovation expenses, paying back your investor’s money including interests, marketing expenses and taxes.

As you can see, the formula is very simple, but going through the process is definitely not easy. 

 

Noli Alleje

The Property Forum Founder

 

Noli is the master auctioneer who was once successfully auctioned properties worth around 3 Billion pesos.  Yes, that’s capital “B” as in billions. 

According to Noli, the auctioning of foreclosed assets started in the early ‘90s during the boom of the property sector.  When the Asian financial crisis hit, people suddenly could no longer pay their monthly amortization, thereby causing those properties to be foreclosed through “Dacion en Pago” (a.k.a. good foreclosures).  

In 2009, the Philippines had about 184 Billion worth of foreclo
sed assets.  The past due loans for the same year amounted to around 115 Billion pesos.  This means, there’s a big opportunity out there in foreclosed assets.

Why is it a good idea to invest in foreclosed assets?  According to Noli, the papers are generally (but not always) in order primarily because banks have a reputation to protect.   Because of this, banks normally would have to do some asset inspection, appraisals, etc.

Noli warns though that this business is not for the weak of heart.  The fact that it is foreclosed means there’s a problem.  When you invest in a foreclosed property, you need to do your due diligence.  You need to inspect the property in the morning and afternoon, at night and dawn, weekdays and weekends.  Take pictures.  Look for defects on the water line.  You can also ask the neighbors to find out more about the property.

In the end, you make money when you buy so you need to make sure you’re getting a great property for a great price before going into a deal.

 

That’s all I have on my notes about real-estate from the Money Summit and Wealth Expo Seminar. I hope you learned something to give you a head start in building your riches through real-estate investing.

 

P.S.  If you have a great property about to be foreclosed or you just need to sell your property fast, we can help!  Just go to https://akosiallan.com/sell-your-property/.

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Financial Goals 2010 Mid-Year Update

It’s now July! The first half of the year has already passed.  Time does fly so fast, doesn’t it?  So many things have happened and I am still amazed at how this blog has grown steadily over the past 6 months.  Before we welcome the next half of the year, I’d like to take this time to reflect and give you an update on my 3 financial goals for this year 2010. 

Financial Goal #1 – Buy a House!

My first goal for 2010 is to Buy a House.  The short update is…NO we have NOT bought a house yet.  But maybe soon. 🙂

My wife and I actually invested in a house…but only for a private lending deal.  Besides, we won’t actually own the house, so that doesn’t count.  That deal, however, introduced us to great friends doing business in real-estate whom I am learning a lot from.  In the next months I will also be spending some time to learn investing in real-estate myself. 

We’ve also been looking at buying a nice 2-bedroom unit on a pre-selling mid-rise condo.  But this one will NOT be ready for occupancy until April 2012.  We actually paid the reservation already so hopefully, if everything is in order, my first goal for the year could actually be within reach (at least technically). :) 

Financial Goal #2 – Invest 20% of my money

The second goal I have is to invest 20% of my money.  I’ve started investing in the Philippine Stock Market.  I’ve tried the cost-averaging method via CitisecOnline’s EIP and even Bo Sanchez’ SUPER EIP way! The experience has been an eye opener for me. 

Apart from that, I also got into a private lending deal on real-estate.  While I haven’t gotten my money back yet, I’m confident this will lead into more investing opportunities in the future. 

Just last week, one of my friends also asked me to invest in her Travel Agency business.   Normally, I don’t lend money unless I’m very sure I will get my money back.  However, since I know her and the money (including interest) will be returned in just 7 days, I thought it was worth a try.  If this deal goes well, I might be encouraged to invest again in the future and probably open it up also to dear readers of this site.

I’ve also been investing heavily on my personal development these past months.  I’ve just attended the Money Summit and Wealth Expo last weekend to learn more about money, business and investing.  The 2-day seminar was a blast!  The energy from the speakers as well as the attendees was simply amazing!  Up to now, I’m still digesting everything.  I’m really excited to share the lessons I’ve learned from that seminar to our dear readers.  So, watch out for that in the coming weeks.

Financial Goal #3 – Be Consciously Alive

The 3rd and last goal I have is to be consciously alive.  This goal has more to do about my desire to live a healthier lifestyle than anything else.  This is the reason why I think your health is more important than your money. 

While I’m not sick at the moment, my health has not been ideal the past few months.  It is not where it is supposed to be.  My lifestyle is not very good.  I still drink coffee a lot.  I am also having a hard time getting enough sleep.  As a result, I’ve easily gotten a cold every now and then.

I’m always in a hurry. Most of the time, I go for fast food.  My weight has increased so much that my pants now hardly fit.  Oh well, it’s a good thing fitted pants are the “in” thing these days.  I don’t have to feel so out of place. 🙂

One good news is that I finally used our condo’s gym.  Finally.  Just today.  And I liked it.  I’ll probably go to the gym more often now.

Quite honestly, this goal is a little bit vague to measure and be actually effective.  So, to make this goal more specific, measurable and make me accountable :-), I’m revising it to say “my goal is to weigh 80 kilograms by December 31, 2010”.  I only have less than 6 months to go so I better get started right away!  Wish me luck!

 

P.S.  Dear Readers, what financial goals do you have for the year?  How have you made progress on your goals now that the first half of the year has passed?