Anyone here investing in the Philippines?
Audio Engineer and Investor · Cebu City, Cebu · Member since 2013 · 7k+ posts · 881 votes
Anyone here investing in the Philippines?
Most Popular Reply
Rental Property Investor · Hong Kong · Member since 2018 · 8 posts · 2 votes
7yYes I am - I am based in Hong Kong but myself and my wife have 10 units across 2 properties and we're renovating (well pretty much building) another 16 unit. All our properties are in Makati in Manila. We are actively looking to buy and rehab more as well.
I actively looking for a good property manager there at the moment so any recommendations are highly welcome...
Happy to connect too!
Thanks
Paul
35 Replies
- Member since 2021 · 3 posts · 0 votes5y
Good day!
I am a real estate agent and I have tried using BRRRR strategy to analyse investment in my area here in the Philippines.
Here is what I found.
The 3 factors that I believe affect the effectiveness of BRRRR strategy in this country ( or at least in my area) greatly, which makes it nearly impossible to find a good deal.
1. High interest rate - PHL - Minimum 1 yr fixed rate is 5+% / US - 3+% for 30 yrs fixed !!! Big Difference !!!
> MORTGAGE PAYMENT MUST INCREASE THE NEXT MONTH FROM 5+ TO 7% just to have tiny positive cash flow. It is hard to find paying tenants here. So, you are risking losing tenants to get a measly increase in Cashflow.
2. RENT must increase with the Mortgage accordingly. 1% rule rent does not apply here in the Philippines because you will have negative cash flow.
3. the length of the Loan. - it will greatly depend on the age of the Loanee.
These are the problems I have encountered analyzing properties using this Strategy. Sadly, the brokers I know who invest in Real Estate here in my area do not recommend this method. they recommend Buy build Sell due to fast ROI. However, this 2nd strategy is much riskier because you need to find buyers in this kind of market.
but for those who used the BRRRR strategy here in the Philippines and became successful. I hope you can share your stories.
thank you
thank you
- Real Estate Investor · Manila, Metro Manila · Member since 2016 · 54 posts · 11 votes5y
You might want to find distressed sellers in the secondary market. Better deals can be made if you're a cash buyer based on our experience.
- Member since 2022 · 1 post · 0 votes4yits true what you stated i think BRRR is not applicable here in PH maybe if your DP is 50% or higher but that would be very capital intensive , build and sell is also feasible you need big capital and be willing to wait for at least 1.5 years or more
Quote from @Khris Atienza:
Good day!
I am a real estate agent and I have tried using BRRRR strategy to analyse investment in my area here in the Philippines.
Here is what I found.
The 3 factors that I believe affect the effectiveness of BRRRR strategy in this country ( or at least in my area) greatly, which makes it nearly impossible to find a good deal.
1. High interest rate - PHL - Minimum 1 yr fixed rate is 5+% / US - 3+% for 30 yrs fixed !!! Big Difference !!!
> MORTGAGE PAYMENT MUST INCREASE THE NEXT MONTH FROM 5+ TO 7% just to have tiny positive cash flow. It is hard to find paying tenants here. So, you are risking losing tenants to get a measly increase in Cashflow.
2. RENT must increase with the Mortgage accordingly. 1% rule rent does not apply here in the Philippines because you will have negative cash flow.
3. the length of the Loan. - it will greatly depend on the age of the Loanee.
These are the problems I have encountered analyzing properties using this Strategy. Sadly, the brokers I know who invest in Real Estate here in my area do not recommend this method. they recommend Buy build Sell due to fast ROI. However, this 2nd strategy is much riskier because you need to find buyers in this kind of market.
but for those who used the BRRRR strategy here in the Philippines and became successful. I hope you can share your stories.
thank you
thank you
- Investor · Australia · Member since 2019 · 49 posts · 30 votes4y
Quote from @Paul Gallagher:
Yes I am - I am based in Hong Kong but myself and my wife have 10 units across 2 properties and we're renovating (well pretty much building) another 16 unit. All our properties are in Makati in Manila. We are actively looking to buy and rehab more as well.
I actively looking for a good property manager there at the moment so any recommendations are highly welcome...
Happy to connect too!
Thanks
Paul
Hi @Paul Gallagher I'm just wondering how you pull this off and foreigners must owe 40% only. Or you build and a local owes the land? Thanks
- Investor · Kalamazoo, MI · Member since 2019 · 66 posts · 10 votes4y
I am investing in the Philippines and currently owns an 8 unit studio style apartment in Dumaguete City and a campground in Siquijor. Looking to connect and network here! Mabuhay!
- Investor · Kalamazoo, MI · Member since 2019 · 66 posts · 10 votes4yHi Khris - your assessment is right and more. The real estate market in the Philippines is very interesting and I believe there is a lot of potential. I currently own a ground up 8 unit studio apt in Dumaguete using Private Money for construction. I own the lot and had used my own savings and retirement money for it (yes that's right !)
Quote from @Khris Atienza:
Good day!
I am a real estate agent and I have tried using BRRRR strategy to analyse investment in my area here in the Philippines.
Here is what I found.
The 3 factors that I believe affect the effectiveness of BRRRR strategy in this country ( or at least in my area) greatly, which makes it nearly impossible to find a good deal.
1. High interest rate - PHL - Minimum 1 yr fixed rate is 5+% / US - 3+% for 30 yrs fixed !!! Big Difference !!!
> MORTGAGE PAYMENT MUST INCREASE THE NEXT MONTH FROM 5+ TO 7% just to have tiny positive cash flow. It is hard to find paying tenants here. So, you are risking losing tenants to get a measly increase in Cashflow.
2. RENT must increase with the Mortgage accordingly. 1% rule rent does not apply here in the Philippines because you will have negative cash flow.
3. the length of the Loan. - it will greatly depend on the age of the Loanee.
These are the problems I have encountered analyzing properties using this Strategy. Sadly, the brokers I know who invest in Real Estate here in my area do not recommend this method. they recommend Buy build Sell due to fast ROI. However, this 2nd strategy is much riskier because you need to find buyers in this kind of market.
but for those who used the BRRRR strategy here in the Philippines and became successful. I hope you can share your stories.
thank you
thank you
I am working on Refinancing the apartment but the process is long and it is compounded by the fact that there is an issue with the "road right of way" with neighbors being difficult making it hard for banks to accept the property as collateral. A small credit union and a major bank so far won't even accept an apartment as collateral but they are okay with a single family. Crazy! The banking sector is almost as slow as the government which makes me think of getting into the lending business :) - Member since 2021 · 3 posts · 0 votes4yI think I found a way to make this BRRR work. It might take longer, about 5 years. But the risk and loan interest may be reduced significantly.
Quote from @Ronsted Yuag:
Hi Khris - your assessment is right and more. The real estate market in the Philippines is very interesting and I believe there is a lot of potential. I currently own a ground up 8 unit studio apt in Dumaguete using Private Money for construction. I own the lot and had used my own savings and retirement money for it (yes that's right !)Quote from @Khris Atienza:
Good day!
I am a real estate agent and I have tried using BRRRR strategy to analyse investment in my area here in the Philippines.
Here is what I found.
The 3 factors that I believe affect the effectiveness of BRRRR strategy in this country ( or at least in my area) greatly, which makes it nearly impossible to find a good deal.
1. High interest rate - PHL - Minimum 1 yr fixed rate is 5+% / US - 3+% for 30 yrs fixed !!! Big Difference !!!
> MORTGAGE PAYMENT MUST INCREASE THE NEXT MONTH FROM 5+ TO 7% just to have tiny positive cash flow. It is hard to find paying tenants here. So, you are risking losing tenants to get a measly increase in Cashflow.
2. RENT must increase with the Mortgage accordingly. 1% rule rent does not apply here in the Philippines because you will have negative cash flow.
3. the length of the Loan. - it will greatly depend on the age of the Loanee.
These are the problems I have encountered analyzing properties using this Strategy. Sadly, the brokers I know who invest in Real Estate here in my area do not recommend this method. they recommend Buy build Sell due to fast ROI. However, this 2nd strategy is much riskier because you need to find buyers in this kind of market.
but for those who used the BRRRR strategy here in the Philippines and became successful. I hope you can share your stories.
thank you
thank you
I am working on Refinancing the apartment but the process is long and it is compounded by the fact that there is an issue with the "road right of way" with neighbors being difficult making it hard for banks to accept the property as collateral. A small credit union and a major bank so far won't even accept an apartment as collateral but they are okay with a single family. Crazy! The banking sector is almost as slow as the government which makes me think of getting into the lending business :) - Investor · Kalamazoo, MI · Member since 2019 · 66 posts · 10 votes4yThat's good to hear! Would you mind sharing it here ? Thanks!
Quote from @Khris Atienza:
I think I found a way to make this BRRR work. It might take longer, about 5 years. But the risk and loan interest may be reduced significantly.Quote from @Ronsted Yuag:
Hi Khris - your assessment is right and more. The real estate market in the Philippines is very interesting and I believe there is a lot of potential. I currently own a ground up 8 unit studio apt in Dumaguete using Private Money for construction. I own the lot and had used my own savings and retirement money for it (yes that's right !)Quote from @Khris Atienza:
Good day!
I am a real estate agent and I have tried using BRRRR strategy to analyse investment in my area here in the Philippines.
Here is what I found.
The 3 factors that I believe affect the effectiveness of BRRRR strategy in this country ( or at least in my area) greatly, which makes it nearly impossible to find a good deal.
1. High interest rate - PHL - Minimum 1 yr fixed rate is 5+% / US - 3+% for 30 yrs fixed !!! Big Difference !!!
> MORTGAGE PAYMENT MUST INCREASE THE NEXT MONTH FROM 5+ TO 7% just to have tiny positive cash flow. It is hard to find paying tenants here. So, you are risking losing tenants to get a measly increase in Cashflow.
2. RENT must increase with the Mortgage accordingly. 1% rule rent does not apply here in the Philippines because you will have negative cash flow.
3. the length of the Loan. - it will greatly depend on the age of the Loanee.
These are the problems I have encountered analyzing properties using this Strategy. Sadly, the brokers I know who invest in Real Estate here in my area do not recommend this method. they recommend Buy build Sell due to fast ROI. However, this 2nd strategy is much riskier because you need to find buyers in this kind of market.
but for those who used the BRRRR strategy here in the Philippines and became successful. I hope you can share your stories.
thank you
thank you
I am working on Refinancing the apartment but the process is long and it is compounded by the fact that there is an issue with the "road right of way" with neighbors being difficult making it hard for banks to accept the property as collateral. A small credit union and a major bank so far won't even accept an apartment as collateral but they are okay with a single family. Crazy! The banking sector is almost as slow as the government which makes me think of getting into the lending business :) - Member since 2021 · 3 posts · 0 votes4y
Quote from @Ronsted Yuag:
That's good to hear! Would you mind sharing it here ? Thanks!Quote from @Khris Atienza:
I think I found a way to make this BRRR work. It might take longer, about 5 years. But the risk and loan interest may be reduced significantly.Quote from @Ronsted Yuag:
Hi Khris - your assessment is right and more. The real estate market in the Philippines is very interesting and I believe there is a lot of potential. I currently own a ground up 8 unit studio apt in Dumaguete using Private Money for construction. I own the lot and had used my own savings and retirement money for it (yes that's right !)Quote from @Khris Atienza:
Good day!
I am a real estate agent and I have tried using BRRRR strategy to analyse investment in my area here in the Philippines.
Here is what I found.
The 3 factors that I believe affect the effectiveness of BRRRR strategy in this country ( or at least in my area) greatly, which makes it nearly impossible to find a good deal.
1. High interest rate - PHL - Minimum 1 yr fixed rate is 5+% / US - 3+% for 30 yrs fixed !!! Big Difference !!!
> MORTGAGE PAYMENT MUST INCREASE THE NEXT MONTH FROM 5+ TO 7% just to have tiny positive cash flow. It is hard to find paying tenants here. So, you are risking losing tenants to get a measly increase in Cashflow.
2. RENT must increase with the Mortgage accordingly. 1% rule rent does not apply here in the Philippines because you will have negative cash flow.
3. the length of the Loan. - it will greatly depend on the age of the Loanee.
These are the problems I have encountered analyzing properties using this Strategy. Sadly, the brokers I know who invest in Real Estate here in my area do not recommend this method. they recommend Buy build Sell due to fast ROI. However, this 2nd strategy is much riskier because you need to find buyers in this kind of market.
but for those who used the BRRRR strategy here in the Philippines and became successful. I hope you can share your stories.
thank you
thank you
I am working on Refinancing the apartment but the process is long and it is compounded by the fact that there is an issue with the "road right of way" with neighbors being difficult making it hard for banks to accept the property as collateral. A small credit union and a major bank so far won't even accept an apartment as collateral but they are okay with a single family. Crazy! The banking sector is almost as slow as the government which makes me think of getting into the lending business :)Get life insurance!
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