My wife who has become so obsessed with finding a new house we can call our home shares updates on what we are thinking of doing with our old house that was devastated by Ondoy, what things to consider, our target locations, finding not just a house but also a sound real estate investment by searching foreclosed property listings, and applicable tax exemptions and pending articles about this and other taxes that apply to real estate, which I hope she finishes soon…
I’m just glad that I was able to convince her to buy a property the way true real estate investors looks for a good deal. Knowing how stubborn she is, I was surprised how easy it was for me to convince her that this is a perfect opportunity for us (as a team) to find a really sound real estate investment that will produce a good positive cashflow if we decide to have it rented out, or sell it for a significant profit down the road. This can only happen if we buy a house well below market value and apply Rich Dad’s principle “… You make money when you buy, not when you sell” as often mentioned by Robert Kiyosaki, best selling author of “Rich Dad Poor Dad”.
Our journey to our new house
By Cherry Castillo
As most of you may already know, we are looking for a new house, as our old house was totally devastated by Ondoy. I am sure many of you are in the same boat as ours. Of course, our decision to move entails more decisions with regard to the next steps, such as:
1. What do we do with our old house? Right now, we have a payment holiday until January 15 with Pag-Ibig. But after that date, we have to continue paying the monthly amortizations. Admittedly, the market value of the house is in question, and it’s not practical to continue paying the amortizations which was based on the market value of Provident Village prior to Ondoy. The next question is, do we sell it now, do we let Pag-Ibig foreclose it, or do we surrender it through a dacion en pago (a.k.a. payment in kind – that is, we give the house as payment for the loan)? If we sell it now, we will be selling it at a loss, but we will be cutting our losses since we will stop paying the high monthly amortization. If we let Pag-Ibig foreclose it (or if we surrender it through dacion en pago), how do we go about it? While it is clear that my husband will no longer be able to take out another housing loan from Pag-Ibig, would it also affect my husband’s credit rating and prevent him from taking out a loan from banks?
2. Granted that we will be moving, where do we go? We can go anywhere! Anywhere where there’s no flood of course. And since we are now so paranoid of natural (and man-made) calamities, if we are to move, we have to make sure that the area is one that was not reached by floods and that there is at least a second floor. I don’t want to be in the mountainside too for fear of landslides. We are now open to condominiums (unlike before, when I really could not imagine living in one), but not those that are too high, as I am also concerned about earthquakes. You may have noticed that there have been a lot of news about earthquakes in the Asian region and in the Philippines in particular. I have been telling my officemates that the best place to be is in a low-rise condominium, somewhere in the 3rd or 4th floor, since it will not be reached by floods, the structure will be strong enough to withstand earthquakes, and if there’s a fire I can jump out of the window and just have broken bones, or, if there’s a swimming pool nearby, I can just go straight to it. I know it’s a bit on the psycho side but you really get to think a lot about these things if you’ve gone through the great flood brought about by Ondoy. Oh, I forgot, I don’t know how to swim. I better join my son in his swimming lessons this summer! And time to turn into reality the Ondoy-related ideas I have thought about.
3. Where are our target locations? I have narrowed down our choices to the elevated portions of Kapitolyo, Pasig, San Juan, and Quezon City near UP. Aside from the earlier-mentioned considerations, it is very important for us to be near to a good co-ed school for our son as he will be turning five in January 2010 already and it won’t be long before he enters elementary school. I have sort-of developed loyalty to Mother Goose Playskool and Grade School (This is my son’s school in Provident Village, Marikina which was also devastated by Ondoy. Because they have several branches, they allowed my son to finish the rest of the school year in their Makati branch. Mabuhay ang Mother Goose!) so I want to find a house near a Mother Goose branch. As for my work, I am currently working in Makati but I am open to moving to Ortigas or QC, or maybe if my husband’s business picks up, I might just help him in the business. One of the best lessons I learned in the past years is that TIME is the most precious commodity. There are only 24 hours in a day and spending it on the road is totally useless. So the house should be near the place of work and study. In the course of my research, I have learned that prices are really so steep in the good areas.
4. This of course led me to search our site for foreclosed property listings (In the right side of the this page, you can use the “search” function to look for listings in this site.) I have also called several banks so I have updated listings with me, which my husband will be posting soon. I have also revisited my husband’s post on the Ultimate List of Bank Websites and I have found some updated listings there too. I have found a lot of promising properties and I must admit that it’s really exciting looking for good buys. I have been a bit depressed since last week, after I visited our old house and saw its sorry state. I determined that the only way for me to get out of depression is to finally have a new house! I have been joking that leaving our house is like breaking up with a boyfriend of 5 years – the only way to have closure is to have a new house/boyfriend! The process of looking for and deciding on the perfect place to grow our roots is both tiring and exciting. I do hope we find the house meant for us soon. We have visited a foreclosed property in Mandaluyong last week, full of excitement, only to have our bubble burst because of the really bad neighborhood, one of the worst as my husband put it (And he grew up in Mandaluyong! I really don’t understand why the Mandaluyong local government spends so much money fixing the islands when they have so many squatters!). My husband reminded me that it should be the other way around – we should find the worst looking house in a good neighborhood. I have also selected several properties and when I called up the bank, I discovered that they either have pending cases or encumbrances, or the bank does not have possession. Hay! I guess we have to look at more foreclosed properties (Around 100 more according to my husband – that’s a lot!). In God’s time, I know we will find the one for us.
5. Applicable taxes and tax exemptions? Being the tax person that I am, I really have to consider taking advantage of the capital gains tax (CGT) exemption from the sale of principal residence. I also need to create a post about this and all the other taxes – real property tax (RPT), percentage taxes, VAT, etc. (Okay, I’m really delinquent I admit!).
So basically, we will be going through the entire process of choosing a property that will also be a good investment. We are also looking at other properties, though not foreclosed but are rather houses for sale by owner (FSBO), but which look like good deals. We will do our best to document each step of the way so that it can be a handy and useful guide for everybody, much like a walk-through of the process. Wish us luck!
Cherry is my wife. She is a certified public accountant (CPA) and lawyer.
—
My vision – financial freedom for all!
Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: https://www.foreclosurephilippines.com
Click here to contact me via E-mail
Mobile phone (Call/SMS): +639178843882
Twitter: http://twitter.com/jay_castillo
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Text by Jay Castillo. Copyright © 2009 All rights reserved.
PS. If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.
PS2. Larry Gamboa and Bo Sanchez will give the Think Rich Pinoy Seminar this November 21 at the Philamlife Building in UN avenue in Manila. Larry will discuss his unique Real Estate methods, buying foreclosed properties and turning them around for passive income. You’ll also get to play Robert Kiyosaki’s CashFlow 101 Game and learn! To attend, click here now!
PS3. If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.
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Hi Jay!
Thanks a lot for your very informational posts.
Anyway, you have mentioned about exemption on CGT for the sale of a principal residence. Can you provide more details on this?
I am planning to sell my house also and move to a new one. I don’t know how to price it, i.e. taken into consideration the taxes that should be paid, if any.
Thanks a lot!
Dennis
Leaving the old house and finding a new one is a good start to live a new life and forget those bad and painful memories from the past. However, if the money is not badly needed right now and there is still enough cash to buy a new house, I think it is much better to sell your old house next year to make its market value higher. The probability of having a buyer is low as of now when the tragedy of Ondoy is still fresh. Well, that is just my opinion.
.-= office furniture ortigas´s last blog ..RP’s top 25 contact centers post P68.5B revenue for 2007 =-.
Hi Jay,
I have been following your posts for a few months now but I am not that consistent. I am married for 2 years now. My wife and I have been saving up money for our first house and also we are looking for good real estate investments. The thing is we are just newbies on this and we don’t much about stuff like taxes. If you have posts regarding this please provide me the link. Thanks!
Hi Jay/Cherry!
Congratulations to you guys! You’ve always written from the heart and this is why I love reading you posts. You allow us to feel how you feel. What’s very impressive is that you guys are still traversing this road to financial freedom and we see how both of you have done it. It’s like watching the movie of Jim Carrey, The Truman Show, only this is for real!
God bless guys!
.-= Bryan Uy´s last blog ..Invest in Cash in a Flash: A P300k Package for only P750 by Mark Victor Hansen and Robert G. Allen =-.
Hi Jay,
In case you’re looking for low-rise condo, you might be interested in Governor’s Place in Shaw Boulevard, Mandaluyong. I saw some internet ads with units for sale (84sqm) ranging from 3.2M – 4M. My husband and I almost got a unit there, but we didn’t push through because we were able to buy a house and lot in San Juan. Just like you, we were hit by typhoon Ondoy and that pushed us much quicker to pursue getting our own house.
I’ve been following your posts on foreclosure properties, they are very interesting indeed. Thanks and more power!
.-= ros´s last blog ..Now It’s Ours =-.
Hi Ros,
Thanks for the suggestion, we appreciate it! We might look at the place one of these days. I’m glad you were already able to find your new home. I hope everyone in your family is okay. Hirap talaga pag na-ondoy pero life goes on! 🙂
You’re welcome, always glad to share information and thanks for the kind words!
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Good decision you have there in having a new house. Congrats!
Thanks Lea! Wish us luck!
Hey Sir. Jay… a good place to live is Tagaytay or Lipa, Batangas ( far nga lang..hehe ) ….. di kasi masyadong binabaha ang Lipa ,,,, and Lipa is one of the fastest growing economies here in Luzon… I can’t imagine how beatiful Lipa will be 10 yrs from now… specially that I’m planning to make this place better….
Hi Red. Looks like you will be a real estate mogul in Batangas! For now we are more inclined to stay in the Metro because we want to be near the schools for my son. But who knows, Batangas is also a good place!
good to hear that you have moved on and is now on the process (healing process?) of finding a new house. i know you will do well as you would apply all of your great tips!
goodluck!
.-= Dinah´s last blog ..Insurance Claim Status =-.
Thanks a lot Dinah, I also wish you all the best with your house. I also look forward to the good news from you when your insurance claim is released.
I’m glad Jay that you are now moving on after the Ondoy aftermath.
I would suggest that you find foreclosure house & lot in Taguig, BCDA area. I’m just in the area and it’s a nice location. 🙂
.-= Snow´s last blog ..Filipino Actor Johnny Delgado Dead at 61 =-.
Hi Snow! Glad to see that you’re back! Yes, Taguig is a very nice location, we are also interested in Mckinley Hill. Very nice place! However, foreclosed properties there are very rare. I hope we can find motivated sellers in the area instead. =)
Hey guys, great post!
“We will do our best to document each step of the way so that it can be a handy and useful guide for everybody, much like a walk-through of the process.”
I will follow this up, think its time to consider doing the same for our own. Unfortunately, the lot we recently bought for a planned home at Baybreeze Subd Taguig is still under deep water, until now.
Blessing in disguise, Ondoy came first prior to finalizing our plan.
Or is it?
I hope you guys work your way towards your new home soon. Looking forward to an update.
Cheers mate 😉
Hello bro, nice to see you here! I believe it’s better you found out that the area where you bought your lot is flood prone before you actually began constructing your house there, saved you from the trouble and the mental anguish. Blessing in disguise pa rin!
Thanks and I also wish you and your family all the best!
I suggest Kapitolyo Pasig. The place is really high and the location is very very nice because it’s near to a lot of establishments and to Ortigas CBD. Chances are the price of lots are also high. I don’t have any idea but I think it ranges from 15K per square meter of lot. Good luck!
.-= Millionaire Acts´s last blog ..Do’s and Don’ts When Buying Stocks =-.
Thanks for the suggestion Tyrone, 15K per/sqm is actually quite conservative. We noticed that there are areas in Kapitolyo where lot prices are even more expensive so I believe it would be a good place to invest, aside from being flood free.
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Hi Jay! We have to get together soon. Remember Nannette? My financial planner (and soon to be yours too)? She has several properties that her clients want her to sell. Maybe one of them is meant to be yours. Let us hook up soon so we can start our JV and get this going (and hopefully find a house for you and Cherry too, in the process). How does next week (week of November 23) sound?
Hi Issa, I’m so sorry for the late reply, so many things came up pero I’m not complaining kasi these were great opportunities (I was invited to share in the Think Rich Pinoy Seminar last Nov 21). It was quite an experience!
Now I have guests from Singapore so i’ll be busy until Nov 25. Maybe we can just meet during the Thursday session of the maven’s secret class or set our meeting schedule there? I’ll also text Nannette and get some details about the properties of her clients. Thanks and I hope to see both of you on Thursday!
Hi Jay! Nannette is going up to Baguio this week so we can probably meet next week, the week of December 1 (Christmas month yey!). We can probably meet you here in QC (Trinoma?) or Katipunan area, wherever it is convenient for you. 6pm up would be the best for me. Let us know. I may be reached through 0917-8060532 or 2157651. Thanks and see you!
.-= Issa´s last blog ..Hawaii: Of Memories and Giving Thanks =-.
Hi Issa,
Okidoki, lets all meet in the coming week, I’ll text you for the details. Thanks!
Good read. Hope that you will find the best house for you. Me and my wife are also looking for a new house.
Good luck jay and cherry
Hi Jim, Thanks! Yes, we will soon find our respective homes! 🙂
Hi Jay/Cherry,
I’ve been following through all your posts for more than a year now. Also during the same time, I had shopped for several months of foreclosed properties. Actually it took us more than a year.. my husband and I finally gave up.
All our previous choices in the list of planned to purchase in the foreclosed list were all crossed out right after Ondoy. We visited the list the week right after Ondoy and confirmed that waters went up man-deep or waist deep.
We then thought that maybe the reason why we were not able to buy those properties during the auctions was because they were not meant for us. Good thing, we were lucky not able to purchase those that were devastated by Ondoy.
After months of adventure, we were also very obsessed to find our new home. We go shopping for real estate properties FSBO this time right after we go out of work, everyday for the entire week. Finally, we were able to look for one and at a better deal which is a 2-storey. No floods. This is confirmed as we were trapped in the express way during the day Ondoy visited Manila. We saw how deep the water is and we were tuned it to the radio during those 2 days that we spent the night on the streets.
Good luck to you. Hope you’ll find the right home for your family, just like we did.
God bless!
Hi JC,
Thanks a lot for keeping us company, yes I do believe the properties you were not able to buy were not really meant for you and I’m really happy for you that you found a better deal! In my case, I have this property for which my offer was approved but has been dragging for so long, guess what, it was also devastated by Ondoy. I’m glad that deal was pending and I did not have any cash-out for it yet. Blessing in disguise!
Thank you and I am really hopeful that we will find the right home for us very soon just like you! Thanks for inspiring us!