Hit up everyone you know and tell them what you are wanting to do. Pooling resources in the beginning is a great way to start. You can offer interest rates above what banks are offering for short term loans. As long as the properties you invest in are returning higher rates than what you are borrowing on, the leverage position makes sense.
Hit up everyone you know and tell them what you are wanting to do. Pooling resources in the beginning is a great way to start. You can offer interest rates above what banks are offering for short term loans. As long as the properties you invest in are returning higher rates than what you are borrowing on, the leverage position makes sense.
Save as much as you possibly can. Do what you can to raise your income and cut expenses. I would suggest keeping track of every penny coming in and going out. A lot of people would be surprised how much they can save over a few years of a frugal lifestyle. This is how I got my start in real estate even though I didn't have a high salary. (Most of my co-workers lived paycheck to paycheck)
@Ashley T. your "not high salary" in northeast Ohio isn't even comparable to what @Muziwethu Dlamini is most likely experiencing in Manila. Do a quick Google search for the average income and poverty levels in that country. 34% unemployment rate, over 30% of the population lives below the poverty level and the average annual income is less than $3k. While the "spend less, save more" mantra is a great battle cry for most in western civilization, I'm not sure it's going to do much good in other parts of the world.
@Matt MotilMuziwethu Dlamini I appreciate the thought. I am from Ohio and invest in Ohio but I have lived and worked my entire adult life in different parts of Asia and have traveled extensively through 12 Asian countries. I am well aware of the poverty levels and how difficult it can be to get started. I think a combination of networking, saving, cutting expenses and as Matt said, pooling resources is great advice. I met a lady in the Philippines who grew up on the streets in absolute poverty. She now owns multiple beautiful resorts in Cebu. (She was really inspired to get started by Robert Kiyasaki's books) It can be done! Best of luck to you!!
It can be done. There was a podcast on that in the low 100's where a lady who just moved to the states from Jamaica with nothing but 40 dollars and a young child and two years later owned multiple houses and few years after that is managing multiple renovations simultaneously.
@Muziwethu Dlamini nice to meet you on BP. There are ways to grow from the right real estate investments. Since you are in the Philippines, you might be interested in considering affordable real estate in Japan. The high yield cash flow market can help you increase your income. By that I mean, properties are occupied so you would receive monthly rental income right away. For example, on a property of $30,000 at 10% yield net pretax, you would collect approx. $300 month in rental income. I'm happy to help or chat if you'd like more information. There is plenty of information on BP to help you. Good luck!
How I flipped a discount pig (as in oink oink) into a 450K (about $9600) piece of land.
I just want to disclaimer this first. I didn't literally take the money from one deal and buy the next. In fact, often we didn't directly profit, it was a multiplier on money to the family. And most of it was semi-accidental and/or trying to help out friends with upside. The numbers are also semi-accurate. If I were doing it for profit it would be roughly the same. It was far easier than I would have guessed.
So someone in the barangay needed 4K (about $85 US) and they had an 8k pig. We had my daughter's 7th birthday coming up in a little over a year and we wanted a lechon. And my wife thought it would be fun and could make some money. So we had piglets 3k per x 13 - 2k stud fee - about 4K total in pig chow - 2.5k in pig helpers because the little buggers are a lot of work. Total about 30.5 k (about $650). Plus we ate the about $300 pig for the birthday.
Then we loaned out between 4K and 10k about 4-5 times. That brought us up to about 55k (about $1175).
Then someone needed to borrow about 40k. That's too much without collateral. So they gave us a car and it was supposed to be interest free and we needed a car for a month anyway. We ended up with the car permanent. Approximate value 60k.
That car was always breaking down so we found someone with a good car who wanted cash and a fixer upper. We added 30k (about $640). So we had a good car (worth about 160k), an eaten pig, and were about negative 5k.
Then we started renting it out. My wife has a cousin who drives and our cut was 2k a night. I think we rented it about 40 days total so now we are up about 75k. Minus repairs it was about 60k. We missed out on a lot of rentals because I foolishly applied American pricing and way overestimated the repairs needed.
We lent out another 25k to a friend of ours backed by title to some land. We have tried to convince her multiple times to sell the land so she can get some benefit. But she said that she knows if she went to another lender she'd have lost it already and she would rather us have it. This is the property I was talking about.
So for 4K we got an eaten pig, a 160k car, and a 450k piece of land.
So why do I tell this story? In the Philippines borrowing is rough. So
work the lending side instead. There is an amazing deal flow on a small scale.
But obviously that means you need money. You absolutely must pay yourself first. There will always be some family member who needs your help. Always. But if you really want to help them, don't throw away your future.
Also treat the people you deal with respect. Everyone we lent money to appreciated the help. And even though they sound like loan shark returns we actually give a comparatively good rate. We never lost money because my wife is a smart lady who lends to people who can pay. And with people who were friends of friends we'd lower rates if the repayed and borrowed another time.
