Mis-adventures of an Aspiring Real Estate Broker #3: Of Flipping; and Whose Afraid of Ghosts Anyway?

Two weeks ago I said that during these holidays, I will read some interesting books and review my favorite DVD movies. This I did, and more! I have read Robert Kiyosaki’s “Rich Dad, Poor Dad”, and some books by Larry Gamboa, and Trace Trajano’s (Think Rich Pinoy series), and have also watched a blue ray DVD version of the “Blade Runner”, “The Last Samurai”, and “Brave Heart”. All action movies!

Tomorrow, right on schedule I’ll review the “Avatar”. I am particularly drawn to the love story of the movie – and the environmentalist’s (?)  idea that somehow all things are really connected in a symbiotic way to each other.

Whose afraid of Ghosts? Recently, I also wrote a blog about a caretaker who in a subtle way, suggests to buyers the presence of ghosts in a house. This has a negative effect shooing off potential buyers of the property – which of course benefits him – as he got to stay on the property longer. That, and the fact that he receives a substantial caretaker’s salary and perks on the said property.

But fear of “ghosts” can also cut both ways! It just really depends on the buyer.

I have a friend – who was an accountant of a large bank in our city – who got promoted as bank manager in one of their branches (in another city). After reporting to her new post, she decided to scout around for a whole house to rent so that on weekends her family can come and visit her. She discovered that her bank has an acquired asset which has been on the market for more than a year but with no takers. It is a beautifully built house with a large front yard in a high-end neighborhood of that city. It was formerly owned by an engineer who spent a lot to build a dream house. Unfortunately, the owner fell on hard times, and the bank foreclosed the said property.

The problem is that no one wants to buy the said house because of rumors of ghost of the former owner. Asking around, she found out that the owner of the house, was so depressed that he committed suicide right in the masters bedroom of the said house. The wake was also held in the house itself. In fact when she visited the house there are still some dried up flowers in the living room of the house from the wake.

Result? The property although located in a prestigious subdivision of  the city and assessed at P 3 Million, has no takers! After sometime, she wrote a letter to the Board of her bank to avail of the housing loan program of their company, and citing her desire to relocate her family near her new work area. Crossing her fingers, she made a ridiculously low offer of just P 1.5 M for the house. After several letters, justifications, and evaluation, much to her surprise her offer was accepted!

My friend proceeded to repainted the house, make some minor renovations, and have it blessed by a priest. Since her family is still living in our city (the children are still going to school here) my friend sometimes slept alone in that house – and even in the masters bedroom itself! She is not bothered at all she said. Of course, she is now a proud owner of a beautiful house in a high-end part of the town.What a gutsy lady!

She invited us to sleep at the house whenever we come to visit that city but until now we have politely declined her invitation. lol.

Most of my reading fare is now in real estate investment. I read Trace Trajano’s stories of his experiences in the U.S. as a succesful real estate investor. I am interested particularly, in flipping a property  – which means finding a property, and buying it (or holding it) at bargain price, and then sell it fast for a profit! Going over my old documents, sorting and filing it last week, I came across an old title which I already forgot. After thinking about it however, I remembered the story behind of how I acquired this title.

It is of a similar experience – although definitely at a very much lesser scale – than that of Trace’s. However, it also shows that Trace Trajano’s scheme is possible as a real estate investment strategy even here in the Philippines.

When we opened our real estate office (having been licensed as a real estate broker), it was also that unfortunate time when a lot of companies was closing down in our city – and a lot of people suddenly find themselves without a job. This resulted on a lot of former co-employees approaching me and asking for help in selling their properties at bargain prices!

Sometimes when I visited a property – I  would see a golden opportunity –  that I ended up offering to buy it myself. One time, a former co-employee, Mr. P drops by our office quite distressed and bringing with him his title, sketch plan, and tax declaration – asking me to help find a buyer for his lot pronto. It seems that he needs big money for some obligation and he was recently “retired”. I agreed to help him, and we immediately visited the property. I found out that it is located at the outskirts of the city, in a slightly elevated area with a good view of the Bay. No one is buying it because it has no road yet – but I know from my contacts in the city government at that time, that a road is about to be built-in that part of the city. I immediately offered Mr. P, P350,000.00 for his 400 square meter lot – which he happily and gratefully accepted – and after closing, have the title promptly transferred to my name.

Four months later, a new road was indeed built-in that area – and a client Mr. B offered to purchase my newly titled property for P 750,000.00 – a nice profit of P 400,000.00 in just a matter of 4 months. Of course, it is vastly different from Trace Trajano’s “nothing out of pocket” strategies, as I used my own money for financing – but I believe that it still beats time depositing it at the bank.

Yesterday, with nothing to do, I drove around that part of the city – and I can hardly believe what I saw! The area is now filled with big new houses, and I cannot even remember now the exact location of my former lot. If I have just known that this development will happen, I could have bought a lot more properties in this area. lol.

Carpe diem, quam minimum credula postero – Seize the day, trust as little as possible in tomorrow. (Horace)(source:http://petalcorin.blogspot.com/)

Bye for now!


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