Real estate brokering

Real estate brokering can be one of the most fulfilling professions in the world.

I found this out when I began almost 5 years ago. You see in the corporate world where I spent my entire professional life, I have come to expect to meet familiar faces day in and day out in back office operations.

Not in this job . Your success in real estate count on how many new faces you get to meet everyday. Being a social animal, we get contentment meeting new friends.

Secondly, junket. Depending on how far out you want to try out your profession, a broker has to go out and travel. Most of the time though travel means commerce albeit not without pleasure.

Thirdly, as broker you are beholden to no superior. You become a baron where like being a captain of your own ship you get exposed to all sorts of conditions in the sea avoiding perilous ones. You therefore have to study the environment following trends and just keeping your eyes open to new happenings. Taking swift action comes now and then to grab opportunities or avoid threats in a timely fashion. It's a skill that you have to develop as entrepreneur.

I hope to write more on this in my future posts.

Why come to the Philippines?

Remove restrictive economic constitution provisions

With due precaution to prevent abuse, this may well be the key to leapfrog our country to a developed economy.

Amending the restrictive economic provisions of the Philippine Constitution - CROSS ROADS (Toward Philippine Economic and Social Progress) By Gerardo P. Sicat | The Philippine Star News Business

What's this property's ROI?

Let me share with you my thoughts on ROI when deciding to buy apartments or a house for end use or for investment.

I recently had an American doctor for a client who asked me to find a piece of land somewhere south of Manila. He wanted to build their home on it and we talked about his ideal house whenever the topic comes up during out trip one day. It was a long trip so I picked up several of his ideas of an ideal house.

He says, “You know Ody, my wife and I plan to retire soon so I would like the house that I will build to be as ideal as it possibly can.”

He and his wife then began talking out excitedly about what they had been discussing so far before coming to the Philippines. And then he said, “The only guideline that has to be followed is that it has to have a high resale value so that when one of us is gone and the other that’s left behind decides to sell my house, it will still have commanded a good price. This means that it has to be so designed that in 10 or 20 years, it will not be difficult to sell.

He continues on to say that they already saw a lot of luxury homes for sale designed by foreigners but all of them unfortunately had them designed according to their own idiosyncrasies that no one else would buy them.

Resale value increases ROI. The higher it is the higher the ROI. Let me explain this to you.

What exactly is ROI?

ROI is net earnings or net annual cash flow over total investment.

Let’s talk of net earnings first.

End users (owners who use their house for their own use) would want to determine savings and additional costs related to the purchase. How much additional transportation do I need to pay as a result of the purchase and living in that house? How much will I save in terms of rentals that I pay now in my rented apartment and how much do I have to pay in terms of taxes and maintenance expenses such as anay treatment, repainting and roof repairs? The net positive value may be called net earnings. If the net result is negative then you have a zero ROI.

That takes care of the numerator: Net Earnings.

Now comes the denominator: investment.

The total investment is the purchase cost (selling price plus expenses related to the purchase such as transfer tax, registration expenses, notarial fees) less the expected resale value of the property. The resale value (RV) is however very hard to determine since it depends on the demand for your type of house in the future.

This is where it becomes a bit more complicated. What factors do you need to know to “guestimate” the resale value?

First of all whether you like it or not, houses depreciate. Unfortunately, a house is considered of zero value at 30 years old if made of wood and at 35 years old if made of concrete. This means that you have between year zero to about year 20 upon which you can sell your property for a still reasonably substantial amount.

Secondly, if (and this is a big IF) the house is designed for the future meaning that if it will still be in demand in the long years ahead, you can just simply get the depreciated value of the house at the year you estimate you want to dispose your house. If you want to be technical about it, you can further compute its present value. For practical purposes, don’t mind the present value.

Thirdly, the good news is that land generally tends to appreciate over the long term simply because land is a scarce resource (not unlimited). For purposes of guestimating, you may assume the cost of land will remain the same until it gets disposed.

This doctor for example bought a piece of land for say P6M and constructed a house over it for say P9M for a total investment of P15M. He is familiar with the trend in the US and hoped that the Philippines will more or less follow the trend there and therefore had the house designed according to that trend. He estimates that he may have to sell the property after 20 years.

How much might the resale value be? The house will have depreciated by 4M by year 20 and the land may have increased but he assumes it to be the same at P6M. The resale value would be P3M (9M minus 6M) for the house and P6M for the land for a total of P9M.

His investment (denominator) would have been 6M (P15M original cost minus P9M resale value). This takes care of the denominator of the ROI formula.

For the net earnings, he would have to consider his savings and costs.

Instead of buying a house his option is to lease a similar house for at least P600,000/year. Because he no longer needs to lease a house, this would have been his savings if he opted to buy a house. On the other hand if he bought the property, he would have to spend P40,000/year for maintenance cost netting him P560,000 per year in earnings.

His ROI therefore would have been 9.3%.

Is this good or bad? Well you can compare this with other investment options but considering that this is for end use, I say this is a good enough proposition. Nobody else can appreciate this better than an end user. The doctor and his wife can scuba dive everyday and enjoy their retirement for the rest of their lives. Knowing his circumstances, in my opinion this is the best investment that the doctor can ever make.

If I were a pure investor, will I invest in this property? Considering that I would need to spend for property management on top of the maintenance cost, I don’t think this is a good investment because I have many other options that will generate even higher ROI.

So for buyers out there who want to squeeze every cent out of their investment, please consider first and foremost the resale value of the property before deciding to buy.

Home run after May 2010 elections?

Everything seems to be on hold for prospective investors in the Philippines because of the coming elections. But to me this election will probably be the start of the most exciting years of my life as a Filipino.

I must confess that the first President I ever supported was Ferdinand Marcos. He was brilliant, an orator, a valiant defender of democracy, military hero and was fighting graft and corruption as one of his platforms when he ran against the incumbent President Diosdado Macapagal. In that 1965 election, I was too young to vote but I looked up to him as a great leader.

At the time, the Philippines was the leading nation in the Far East. Our educational system was the best in Asia and our economy has never been as robust in its entire young life as an independent nation especially during the first term of President Marcos.

In 1971 a constitutional convention was held paving the way for a semi parliamentary form of government giving the President 8 years with unlimited term extension but by election.

At the time a year before the end of Marcos term 1972-1973, communism appeared to become very strong. It infiltrated most student and labor organizations and with the necessary chaos by which communism normally earn its way to power, classes were suspended almost every other week. Everything seemed to be in disarray. Yeah it was fun for most of us but we were going nowhere.

When Martial law was declared, congress was dissolved and I was one of those who agreed that Martial law was the right solution. And aha, Marcos my hero would still be President.

True enough, peace and order finally reigned.

Far from my mind was what would happen during the ensuing years. With his absolute power, Marcos turned greedy to be polite about it. Everyone knows what happened next. He created and lead his Kilusang Bagong Lipunan movement trying to change society by subtle force and indoctrination. I remember getting exempted from ROTC by going aboard an education tour by love boat cruising all over the Visayas. "Whoowie, this is life!" I thought.

It turned out to be a mind conditioning trip. We were asked to attend 8 hours of class a day for one week to convince us that Martial law was the necessary foundation for economic progress.

Since Marcos was not elected into power, his legitimacy was largely put in doubt not only domestically but also elsewhere. So he called for a national election. He won by a landslide against someone by the name of ... by the name of ... what's his name again? Ah yes Alejo Santos (I had to google search to find his name). I exercised my right to vote and went for Marcos ...strike one.

Everything that was developing seemed to point towards putting Marcos in power indefinitely. Naturally, there was unrest with Senator Ninoy Aquino from the U.S. leading the pack of his opponents. In 1983 he decided to return and was killed in the airport.

Cory Aquino after series of protests became President by people power in 1986 now known as EDSA I.

As penance for the wrong choice I made I suppose, I was lead with my wife to sleep inside our car that we parked at the EDSA gate of camp Aguinaldo on the first night that Cardinal Sin radioed for help. I remember that first night, the support was very thin and disorganized and kidding aside, I thought our car was the only one parked in front of the Camp Aguinaldo gate by around 4:00 AM. When we woke up at about 7:00AM, we were surprised by the sheer number of supporters that kept coming in between camps Aguinaldo and Crame. I thought our small car could not be able to leave EDSA for lack of space to drive on.

My wife and I were ecstatic with hope and so did most Filipinos.

The revolutionary government of President Cory gave rise to the opportunity to put in place a constitutional convention shielded from political influence as the delegates were appointed by an independent commission based on expertise and barely by connection. The result was an outstanding, though not perfect, constitution that we are sworn to follow up to this day.

A peaceful election in 1992 took place and my new President Fidel Ramos took over. It was one of the most progressive periods in my life time only to be messed up by an overwhelmingly popular but very incompetent President actor Joseph Estrada who won by a landslide (the biggest margin in any Philippine presidential race) against my candidate Jose de Venecia in 1998.

President Joseph did not last long as he was forced out of power by what is now known as EDSA II out of allegations of corruption, stock manipulation, benefiting from illegal gambling, etc.

Come GMA by succession. She was very popular for so many years until she confessed that she tried to influence the COMELEC officials in Mindanao which provided her crucial votes to win the presidential election in 2004 against another popular actor Fernando Poe Jr.

From then on her popularity deteriorated and up to now never recovered not even after pardoning Joseph Estrada who was convicted of plunder with the hope that Estrada supporters will help improve her popularity. Her legacy was a government bereft of dignity and clean governance. Oh, I voted for her ...strike two.

Now I feel that I am on the home base once again aiming this time for a home run because all indications are that my candidate is going to win and he conveyed convincingly the image that he was substantially for clean and no-nonsense governance. The economy is healthy thanks to the independent Bangko Sentral ng Pilipinas. The world economy is on its way to recovery. The timing of it all is perfect.

This is why I am excited. For the first time since EDSA I, my hope has never been this high that the Filipinos now have a better than average batting chance to turn this great nation around and become a leading economy once again in this part of the globe.

So what next after the May elections? I would say more work for us Filipinos because we have a budget to balance in six years time. Our economy has a good chance that it might do an India if not a China. And if everything goes well, the next President in 2016 who I hope will win in this May election as Vice President of the land will continue on this legacy of good governance.

At long last I am going to witness this progress in my lifetime! If this isn't exciting, I don't know what is. This time, it will probably be a home run.

Ayala Center Makati

Top of mind name recall when Makati, Philippines is mentioned is ...Ayala Center.

During the 60s up to the 90s, Ayala Center Makati was known as Makati Commercial Center. I recall that, back then in the 60s, known landmarks were the Rizal Theater (where now stands the famous Shanri-La Hotel Makati), Shoemart (the original name of SM Department Store) and the ever enduring Anson’s Emporium (relocated within Ayala Center at least twice since then).



Ayala Center Makati is a recreational, shopping, dining and entertainment development centered on two Ayala Center Malls, Ayala Center Glorietta, and Ayala Center Greenbelt, an upscale shopping center. The two Ayala Center Malls are surrounded by smaller department stores and retail centers, these are SM Makati, The Landmark (read “low priced groceries and dry good items”), Park Square and Rustan's Makati.

When in need of supplies for home and office, one goes directly to Glorietta. Alternately, when decided to relax by shopping or dining, one goes to Greenbelt.

















Ayala Center includes 6750, where shops of international brands and Procter and Gamble's and Chevron’s Philippine Headquarters are located. It also includes well known hotels chains such as the Hotel Intercontinental, Dusit Hotel, Marriott's New World Hotel, The Peninsula Manila and the Shangri-La Hotel Makati.

Fine residential serviced apartments such as Oakwood Premier Ayala Center (now called Ascott Makati) where the Oakwood Mutiny in 2003 was held and Greenbelt Residences, and Ayala's Ayala Museum are also located in Ayala Center. This mall is also near to Ayala MRT Station.

Soon to rise residential condominiums are The Residences at Greenbelt and The Raffles Residences at Glorietta.

Why Choose the Philippines for Medical Procedure?

The Philippines, with its huge pool of competent doctors, nurses, physical therapists and other medical health practitioners, is the best place to go for practically any medical procedure.

That a growing number of Filipino health professionals are able to migrate abroad to look for better opportunities only indicates the high level of their competence.

Rest assured that while the Filipino nurses and doctors who take care of you may be unassuming, they are highly qualified: curricula in Philippine medical and nursing schools are far more challenging than in those in other Southeast Asian countries, and are at par with those of the best schools in Europe or the United States. Many Filipino doctors, too, have acquired their postgraduate or fellowship training from well-known institutions in the U.S., the UK and other developed countries.

More, Filipino health care practitioners are not only trained in Western medicine, but, coming from a deep and honest tradition of healing, have an entrenched penchant for healing and service.

To complete your healing experience, you can recuperate at a number of tourist and healing spots that the country boasts. The choices are many. For sure, you will be able to find a spot or two that will suit your time constraints, budget and personal preferences.

Makati Medical Center