• Noli “El Subastahero” Alleje - #1 in the country in foreclosure investing, Managing Director, The Property Forum (http://realestateacademy.ph/)
• When you buy your dream house at an early stage, it becomes a nightmare because you will always be thinking about the big expense and financial burden, instead. Make your dreamhome your benchmark and be practical. Everytime you sell a home it gets closer and closer to buying your dream home.
• There is a Boom in:
  • Cebu
  • Davao
  • Bacolod
  • Iloilo
  • General Santos City
  • CDO
  • Naga
  • Tuguegarao (good investment)
  • Fringes of MM
    • Cavite
    • Laguna (corridor of growth
• Boom with a lot of supply doesn't necessarily mean lower pricing but same, high pricing but with better financing. "Prices of real estate now is more expensive. It becomes more affordable because people can get better financing."
  • There is an ease of entry when it comes to owning a house. You can avail a low downpayments that can extend up to 36-48 months and interest rates are low
  • Why prices have gone up, commensurate to the earning potential of people today and before, real estate prices has gone up in proportion to the earnings of people? Cost of materials have also gone up. This are developments within a "gillage" (gilid ng village).

7 STEPS TO BUYING YOUR FIRST HOME

• Change your mindset
  • Investing in your first home doesn't have to be your biggest liability
  • Be a "Gypsy Owner" - buy a house, live in it, sell it for a profit afterwards
  • Recommended bec your family grows. Being a Gypsy owner allows you to adjust as your family grows.
• Budget
  • Normally, set-up your emergency fund. You have to set it higher bec your emergency fund will be burdened with monthly amortization which is 15-20 yr committment.
  • INCREASE EMERGENCY FUND BEFORE YOU PURCHASE A HOUSE. ADD UP TO 6 MONTHS' WORTH YOUR AMORTIZATION TO YOUR EMERGENCY FUND, AND ADD UP TO A YR'S WORTH IF YOU HAVE CHILDREN. 15K emergency fund + 15k amort = 30k * 12 months = 1.41M
• Family Needs
  • Air
  • Identify paths of progress
  • Choose the location based on your personality or preference
  • Not entirely about econometrics
  • ie., Choose Rizal for the fresh air
• Location
• Amenities
  • Do you want it near mall? Transpo?
  • 4 corners of the house will be the same, but what's important is outside your door.
  • ie., Security is important if you have kids. Will you be able to sleep at night knowing that. Are there CCTV? Security guards?
  • Consider your age range, ie., when you have kids, it's good to have a playground etc.
• Documentation
  • Get a licensed broker that can guide you
  • Read all documents
    • Reservation Agreement
    • Deed of Absolute Sale
    • Contract to Sell (Know if you can sell the property without fully paying it yet)
    • Deed of Restriction - Condo Units - what's allowed in your condominium, ie., pets
    • Torrens of Certificate (TCT) - condo - certificates allow for the transfer of property without requiring a title search to be completed first
    • Condominium Certificate of Title (CCT) - condo
    • Tax declaration -
    • Title tracebacks by some companies, which can be a representative for you in court to protect your title (REVA, Real Estate Valuation Association) - history of the titles
  • Read, Understand, Consult and Act (sign or not?). ASK EVERYTHING. ie., when you buy a car, you kick the tire, the engine
  • To Choose a Good Broker
    • Check his/her facebook
    • Check if s/he is licensed
    • Ask for license number
    • Cross check the license number with the Philippine Regulatory Commission or ask for a copy of the license.
    • Ask for referrals
    • Check to whom s/he sold in the previous month
• SELL.
  • Grow your wealth with your property
  • ie., You owe 20% down payment on your home, you only owe 20%. Once you improve it every year, you're going to increase its value. When you live there, you're going to enjoy it.
  • Disposing of your first house is good.
  • As your income increases and your family grows, you can start selling to move to a better house.
  • When is it time to sell the house? When there is a buyer at a value you want. Once you have your home, set up a sale sign.
  • Investing in your dream house is good BUT your lifestyle changes your needs for your home when you grow older.
  • Pag-ibig sells by wholesale, usually around 500K valuation bec dilapidated

DEFINITION

• Overrun - overexpenses

EXPENSES IN HOMES

• Upgrade the house by 10% of its value every year. Important especially if you're going for "Gypsy Ownership"
  • Change the windows
  • Change the color of living room
  • Fix the roof
• Association Dues
• Maintenance
• Real Estate Taxes

WTF ARE THESE?? REAL ESTATE STRATEGIES:

• Holding
• Fixing
• Leasing
• Flipping

TIME TO BUY FORECLOSED PROPERTIES - AUGUST SEPTEMBER, bec Banks are trying to meet their targets

HOW BANKS VALUE PROPERTIES - through Appraisal process

• Banks have professional appraisals department but they need to protect their Book Value
  • Amount of the loan
  • + Interest incurred during foreclosure period
  • + penalties
  • + Carrying costs (costs needed to maintain the property ie., maintenance, caretakers, depreciation, security guards)
• Find out bank's book value. The longer the bank holds a property, the more costly it becomes for them. A bank will not go below their book value.

PAPER ASSET vs HARD ASSETS?

• HARD ASSETS - bec of the Exit Value. This means that you can "flip" a property and resell it for 600% profit.
• In Paper assets, that profit that was gained in a month will return in 3 yrs.
• Real estate loses up to 15% of the value, whereas in stock market you can lose all.