Real Estate Investing in Tough Times - a short talk with Rex Mendoza

August 6, We went to Manila on a business trip with my mom and younger sister (an apprentice and is learning the ropes of real estate). She recently finished her studies and just arrived fresh from the U.S. after a 3 week vacation mixed with business and pleasure. I was able to join them on the 2nd General Brokers Assembly for the second quarter of Alveo Land Corp., An Ayala Land company, which was formerly known as Community Innovations, Inc or CII for short. We were invited by one of the Brokers network coordinator the other day and the venue will take place at Bonifacio High Street, Bonifacio Global City, Taguig.

Alveo Land Corp (formerly Community Innovation, Inc.) was a young upstart company of Ayala Land Inc. (ALI) back in the early 2000 and has been in the forefront on the mixed residential developments ranging from horizontal to vertical projects wherein one of their top selling properties are Two Serendra in Bonifacio Global City, The Columns in Makati CDB just to name a few of their projects has achieved P 60 Billion pesos through its combined sales of their project in the whole Philippines with achieving a first quarter profit of % by Ayala Land Inc as reported by Mr. Robert Lao, deputy head of sales of Alveo Land Corp.

Mr. Dan Abando, president of Ayala Land Inc. together with Mr. Rex Mendoza, Senior Vice President of Ayala Land Inc. were present on the meeting together with the movers and shakers of the company, their accredited real estate brokers and their respective companies that are business partners with the Ayala Land. The top 10 brokers were presented and given awards and gifts for their support with Ayala's vision of developing the landscape and venturing into real estate which gave them lots of opportunities.

Mr. Rex Mendoza gave a small talk on Real Estate Investing in Tough Times in which he gave some details to help the sales people achieve their goals of selling to customers on bearish market and boosting sales of their properties. "The people are capable of buying anything but they are afraid of uncertainties lying ahead with dark clouds" as what Mr. Mendoza said. You see, customers are on a "wait and see effect" of the economy.

Monthly Peso per US $ Rate (January 1997 - June 2008)
LATEST: P 44.281 /US$ (June 2008)
HIGH: P 56.341/US$ (October 2004)
LOW: P 24.2648/US$ (December 1994)

Interbank Call Loan Rate
(January 1991 to June 2008)
Latest: 5.27 % (June 2008)
High: 21.1 % (January 1998)
Low: 6.9 % (July 2003)

Sources: Bangko Sentral ng Pilipinas

91-day T-Bill Rates (Updated 18 June 2008)
Latest: 3.67 % (January 2008)
High: 15.8 % (November 2000)
Low: 4.4 % (May 2002)

Mr. Mendoza recently showed some slide presentations adapted from Anton Periquet's presentations to Ayala's top brass a few weeks ago (Anton Periquet is a Deutsche Regis Partners Country Strategist). Just citing an example from last year, A lot of people in 2007 doubled their net worth overnight upon investing in stock market, mutual funds and others during the bull run of early 2007 but somehow upon reaching the late 2007 to the early 2008 a lot of the same people who invested were left with one half to one third of their net worth to losing streak. In 2007, people are thinking that they are rich because of their purchasing power but at present times people are belt tightening or afraid to invest, he asked us if the "Good Times are Over?".

People tend to ask the same old question of What now?, What do next? So people backtrack and not engage again meaning market needs excuses for movement and ask for stimulus on which inflexion point occur. The Philippine Stock Exchange Index is signalling another economic inflexion point. Mr. Mendoza reiterated that history repeats itself setting an example of 1997 Asian Financial Crisis (or Asian Flu of 1997) wherein Asian tiger economies like Japan, Singapore, Thailand, Philippines and other countries where hit hard but manage to survive the tough times and make a rebound in the process. He also pointed the psychological problem of the investor on How Long this problem will stay? Wherein there are two pre-requisites that should make the world economy stabilize on which 1.) Global Risk Appetite Normalize; 2.) Domestic Trigger Surfaces.

Along the meeting, he discussed the Virtous Cycle Unwinds that affected the world wherein there were two shocks experienced globally in late 2007 to present times. First of all is the U.S. SUBPRIME CRISIS brought about by CREDIT CRUNCH which was brought about by bad practice of lending and financing wherein they lent their money to those with poor credit (see through Investopedia). The second is OIL, in the past few months there have rising fuel prices but somehow a few days ago, the oil market and trading have recently decrease to US$ 115 per barrel and I am hoping it will go down sharply. The two shocks affected our real estate buyers from abroad specifically the Filipino-Americans who were our main investors but here in the Philippines and other overseas Filipinos from other parts of the world are not affected by the U.S. Subprime Crisis because our local banks are asking for primary collaterals (land titles, bank certificates, stock certificates etc) before issuing and approving a client a loan (very strict rules) so it is a different story from what is happening in the U.S. wherein the lenders can lend you money as long you are breathing with no collateral before the housing bubble burst.

There is a growing consciousness among the public in investing in real estate to hedge against inflation wherein a property is still the best option in long terms with capital appreciation. Right now mortgage rates from banks remains low with major banks competing in giving the lowest rates to potential customers, Peso - Dollar Exchange Rate is still stable and positive economic outlook in 2009 and Filipinos as most Asians regard property as a primary investments.

There maybe crisis in these rough times but some people see opportunities in times ahead.

"THERE IS NO FUTURE IN SHORT TERM".

Copyright 2008-2009 - PinoyMoneyVantage

The Power Broker in Me: Putting back Real Estate back on Top

I had my few months hiatus of not being a real estate broker. It was a soul searching time for me as I finished the 2 month Registered Financial Planners Course given by Registered Financial Planning Institute - Philippines two months ago and still kept practicing.

Those months were a fulfilling moment for me in updating with new trends in medical and scientific research, learning new trades, knowing more on different types of investments and meeting new people as potential clients. Even if we are experience the downtrend in the stock market as in we are in a windfall of world recession as the U.S. is still coping up with its own problems which affected the world and us feeling the brunt of higher oil prices with inflation rate staggering at 11.4% from last month. It does hurt the pockets of consumers of all walks of life.

To admit the truth, the real estate industry felt the pinch with America as its rich market before for Filipino-Americans in selling properties have made an abrupt stop and so most major Philippine developers put their sights on other places where Filipinos thrive. They have had a second look on the European and Middle Eastern Market segment targeting Overseas Filipino Workers there and also the local Philippine market. Feeling worrisome on the downtrend in sales that I need to find alternatives of producing money other than relying from my fixed-income job which is not enough to sustain my lifestyle.

Real Estate has become a bread and butter for some older folks in the trade. I on the other hand, have a career and real estate is a part-time work for me. In two years time, I might go full-time and quit the healthcare job once I have established myself in taking over the family business.

I find it amazing as I become equipped with the words from these motivational speakers who are at the same time fellow real estate brokers from different chapters of REBAP and made millions in just a few months through real estate selling. I find it inspirational to see and hear them talk and believe in their principles even met the oldest real estate professional who is already in her late 60s who happens to have lots millions on different transaction and deals from her small beginnings in the 80s and in the present times. The topics on the seminar are relatively needed for the participants to apply these experiences in real life especially in the sales and marketing aspect in being a real estate brokers. The speakers also added new tools in creatively selling properties through the use of word of mouth, the internet and advertisements.

Another inspirational lecture given by Mr. Ricardo "Dindo" Raymundo, team manager of Alaska Aces Basketball Team. He given us some thoughts on his experiencing from managing the best basketball team through his corporate knowledge and business wisdom which kept this team the among the top teams in Philipppine Basketball Association (PBA). He also shown us a video clip of Nick Vujicic - No Arms, no legs, no worries.


Copyright 2008-2009 - PinoyMoneyVantage

Economic Slow Down in America How it Affected the Philippines and the World

It was a sad thought that the economic slowdown and recession in the United States not only affected our local real estate developers but the independent real estate firms selling to the once rich market of people with higher credit score and higher net disposable income. So everyone in America especially the baby boomers (those who were born in the 1940's or after World War II) who are about to retire by now or in a few years time and even the middle class Americans.

Once and for all, I have to shift our firm's attention to other markets in the world where there are lots of Filipinos working overseas. A good example of market is the European and Middle East wherein there are great concentration of Pinoys migrant workers in those areas. This was admitted by Rex Mendoza, Ayala Land, Inc vice president for sales and marketing (see article, Manila Times). Right now most of those real estate developers are also tapping the Asia-Pacific market another place to look and scour at is the first world countries like Singapore, Hong Kong, New Zealand and Australia wherein there are also a great number of Filipino immigrants there who may want to invest here in the Philippines.

It is definitely a fact that the Philippines and other asian countries as well especially with China rely with the U.S. market with their massive export capability of goods and the European Union is second. Last year, some of the China made goods were removed from the shelves due to complaints from customers and findings from government agencies regarding their safety. It was found that most of their products do not comply to international standards and health hazard for children. Lots of these products especially toys were pooled out of the U.S. market early last year.

The Business Process Outsourcing (BPOs) related with call center and medical transcription companies are feeling the pinch of subprime mortgage crisis (see article, Times UK) in America, as most of these companies heavily rely in U.S. dollars and also the U.S. markets. U.S. $ dollars have been for the past few months is breaking even against the dollar. However, it is now risen its value after loosing its value from P40.00 to US$ 1.00 but as of this writing the pesos is against the dollar at P 41.00 to US$ 1.00. Multinational BPOs from U.S. who have moved their operations here in the Philippines and India are loosing ground due to the loss of customers and closure of some U.S. based companies due to recession meaning alot of people are being laid off from work in the America.

Last week, I was watching CNN when I stumbled upon Union Bank of Switzerland having problems. I was totally shocked on seeing Union Bank of Switzerland, one of the best and biggest banks in Europe (see article, BBC CO UK) lose US$ 34.8 Billion due to the subprime mortgage and credit crunch. UBS is experiencing dire straits after heavily investing in U.S. real estate properties which have rapidly declined in value for the past few months since last year. It was tragic. Lots of investors have lost confidence on the annual stockholders meeting last week in Zurich (see UBS has doubled its subprime writedowns).



Copyright 2008-2009 - PinoyMoneyVantage

Becoming a Real Estate Sales Professional

I could never imagine myself being in the real estate business. I did have a fruitful career in the healthcare industry but somehow the lure of fame and fortune have taken me to this new profession. I have been in the industry for three years now. Started out as a secretary and a assistant to my mom who is also a newbie or a greenhorn in the real estate even if she was a licensed real estate broker since 1984.

The real estate industry became an interest to me in 2005. I first attended a sales training seminar for real estate agents with Communities Philippines, A Vista Land Co. (formerly Crown Communities, Inc.) selling their projects outside of Metro Manila. It did become a challenge for me to be in this profession in being a proactive and outgoing person. It changed me into overcoming fear and shyness by arming me with self-confidence in dealing with different people as a real estate sales professional plus the thought of earning a high commission brought me to property sector after resigning from my dead-end job which only offer a above 100,000 annual income.

My mom was medical representative with an multinational nutritional and pharmaceutical company before her retirement in 2003 when I was a about to graduate in college. Her career has spanned for more than 30 years in the selling and marketing which in turn earn lots of money with that company and at the same time earning money through the high sales she garnered in the past. She was a seasoned salesperson but still she is still adjusting as a real estate sales professional after her retirement in being a medical representative, she was totally back to zero in the property sector and being a real estate broker is not the same work as the previous job, but still the principle of selling to would-be client is the same especially in establishing rapport and building relationship with them.

I learned the ropes from her on the sales experiences and wisdom she gained plus the experience of having a actual site manning or mall booth manning which is hard work even you are passing time, we usually work in duo. I even had some little scruffles with some clients or would be clients who are just not interested and are wasting my precious time. I learned those types of people from Michael Pink's book named "SELLING AMONG WOLVES WITHOUT JOINING THE PACK" wherein he differentiated those types into four groups.

According to Discoro "Jun" Garing's book The Filipino Art of Breakthrough Selling, that out of the 100 prospects / customers you encountered there is only 20 prospect who are really interested in buying a product, 4 of them are qualified to buy but there is only 1 true buyer (so the ratio is 100:20:4:1). The ratio I have mentioned is a salesperson batting average in making a home run to closed deal. The numbers speaks well and also in my experience as a real estate agent turned and licensed real estate broker. In the marketing arena, you should be armed with the knowledge, expertise plus the appetite to associate with other people is needed in order to close that deal. Plus be tech savvy in marketing the project wherein the internet has become among the best medium of getting the attention of local and overseas clients.


Copyright 2008-2009 - PinoyMoneyVantage