Manila – BGC Property Touring (September 29, 2018)

by FI Fighter on September 28, 2018

in Philippines, Real Estate Updates, Travel Updates

As I alluded to in the last post, I wanted to share with readers some pics from some recent property tours that I’ve gone on…

The first one was at 8 Forbestown Road, featuring an awesome view overlooking the Makati skyline.

And the country club right adjacent to it…

Outstanding view and all, this 100 sq. meter 2 bedroom apartment was asking for 21 million PHP, which is quite rich…

Just a shade below $400,000 USD.

Funny enough, there are a few 2 bedroom unit across the street at the less heralded (older) Forbeswood Parklane, which are also on the market, and asking for “only” 11.5 million PHP.

About $215,000 USD.

That’s like nearly 1/2 off!

In real estate, they often say it’s all about: location, location, location.

I agree with that viewpoint entirely, but at the same time, if you’re going to give me a choice of which property to buy (when they are located a stone’s throw away from one another), I’m ALWAYS going to go with the one I feel will give me the “most bang for my buck”.

I was brainstorming with the realtor, and he agreed and said that there’s no way you couldn’t just buy the cheaper unit and spend probably less than $20,000 USD in rehab work and get the cheaper unit to look just as good (if not better) than the more expensive comp.

Perhaps, a “finished product” that could look something like this…

The above remodel work was done on a unit in Bellagio Tower 3.

For BGC, this type of rehab really stands out from the pack…

Hey look, the microwave isn’t on top of the fridge (inside joke)! Go figure…

Feels very “homey” to me, anyway…

Asking price was 15 million PHP. Not outrageous at all, for a fully rehabbed 2 bedroom/2 bath apartment located right next to Burgos Circle. Certainly, I feel like this Bellagio unit represented better value that the “overpriced” unit selling at 8 Forbestown Road.

But getting back to the original point…

Yes, absolutely living in a newer building would be awesome, but here’s where datapoints and past experiences help me out quite a bit with making “rational” decisions:

 

I lived in Hong Kong for ~9 months or so back in 2016/2017. In HK, the competition for real estate is so fierce that people will gladly pay through the nose to win ANYTHING! Nobody really gives a shit about new construction, old construction, or if a unit needs a total gut job… JUST WIN BABY! The argument is you just want to own SOMETHING in HK, and that’s all that matters!

 

A recent conversation I had with a friend in HK who just won her first home, FINALLY (after getting outbid numerous times, too many to count)!

Properties located within the core of world class cities will ALWAYS be in heavy demand, with tons of interested buyers looking to get in!

With Manila and Bonifacio Global City (BGC), I pretty much feel exactly the same way the masses now feel about: HK, Bay Area, Singapore, London, Sydney, Vancouver, etc. The trend is definitely moving in the UP direction for BGC!

BGC is just undiscovered right now… A “hidden gem” if you will… which is why (not surprisingly), my biggest critics think I’m a total moron for wanting to speculate in a “non-proven” location…

But in many ways, so many people called me an idiot for buying up Bay Area rental properties so aggressively back in the day…

 

It’s how the game goes…

 

Regardless, in my eyes BGC is dope, modern, clean, safe, and it’s where I wanna be if I’m going to live in the Philippines long-term… As long as I can own a unit in BGC, that’s all that really matters…

So yeah, the tightwad and deep value opportunity seeker that I am, I’m gravitating towards getting something in a good location at hopefully a very affordable price… that I can fix up later, if I need to.

Moving on…

This next story is a fun one.

Also located in Forbestown, we next went to see some units for sale in Bellagio Towers. One of the units we toured was a “bare bones” 2 bedroom/2 bath, shown below.

What’s so special about the above unit?

Not much, except for the fact that the original owner who purchased this unit many years ago (let’s just round it off and say 10 years) was apparently some investor from Mainland China… who has never rented out or lived in the unit…

Surprised?

It gets better… Turns out, this savvy investor who was forward-looking and very much into trying to find “the next big thing” didn’t stop at just purchasing one unit, but built up a collection of 12 units in total… all located in Bellagio Towers.

Well, fast-forward to the here and now, and from what I’ve been told (please don’t quote me on this, I’m a total newb when it comes to researching/understanding Manila real estate), the investor is now up ~3x on his initial investment (unleveraged). Of course, I would have no way of knowing if this guy used leverage or not…

 

But in any case, I seriously doubt most investors are gonna complain about being up 3x in a span of 10 years…

 

In other words, this dude hit one out of the ballpark!

 

But of course, we now live in a society (and day and age), where these type of “killer” speculative bets are completely underappreciated by many investors, sadly even by those who are so intent on reaching early FI at an early age…

 

I mean, in many ways, this story that I was told was entirely reminiscent of the one I know first-hand, and was shared to me years ago by a real estate mentor from the Bay Area, who managed to accumulate 20+ rental units during the downturn, post Global Financial Crisis (GC) of 2008. It doesn’t take a rocket surgeon to do the math and see that my own mentor is now worth tens of millions (probably more)… closer to $20 million, if I had to venture a guess…

 

And it’s precisely datapoints like these that make me so damn adamant in my belief that as speculators, we really need to fucking pay attention to “hyper growth” stories that will have you feeling smug as fuck in a few years, if your speculations work out… Usually with these things, it’s with the benefit of hindsight where we say:

 

Damn it, I knew this would happen! Why didn’t I buy more!?! Why was I not more aggressive?!?!

 

How I feel about the future growth prospects for BGC is no different than how I felt about Bay Area real estate in Santa Clara, located next to Levi’s Stadium

 

In case you’re new here, let’s take a trip down memory lane

 

“Hyper growth” for the win!

My thoughts from 2014.

 

With the benefit of hindsight, my decision to speculate in Santa Clara rental properties (we won two of them) back in 2014 was a homerun and arguably one of the best investment decisions that I ever made in my entire life.

 

The two Santa Clara properties my investment partners and I won back in 2014 for ~$500,000 USD (each) are now worth close to $1 million USD (each), 4 years later…

 

For anyone who doesn’t think MASSIVE appreciation can change your life and “it’s all about mediocre cash flow, baby”, ya’ll need to get out of town!

 

Seriously, I have never met anyone who has made life-changing gains via appreciation (especially when buying World Class Tier 1 properties) bash it! The haters are usually the peeps who have never experienced a sniff of the good stuff and are altogether clueless as to how potent appreciation really is!

 

Take it from a guy who owns a Class B rental property in Indianapolis (owned free and clear). Sure, the monthly cash flow is nice, but the property is up a PATHETIC $5,000 in 5 years!

That’s mediocre performance, even with all the cash flow factored in… No bones about it.

I take zero pride in my Indy investment and know without a shadow of a doubt it was a mistake on my part.

I regret it.

If I could do it all over again, I never would have bought in Indy (let’s not even bring up Shitcago which was 1,000,000x worse).

Near-zero price/rent appreciation is not worth my time of day… at all!

 

Anyway, going back to that Chinese investor with 12 units in Bellagio Tower, I’m just guessing, but I wouldn’t be surprised in the least bit if he’s booking major profits on some units so that he can pay off any loans he may have outstanding on his other units… Or who knows, maybe he owns all 12 units free and clear already? In any event, shrewd decisions to speculate in “hyper growth” areas means that this investor no doubt never has to worry about money ever again in life… He’s lightyears ahead of most people and set for life, no question.

 

Enough rambling, let’s move on with the property tour…

 

Next, I went and toured some Federal Land properties. In particular, Park West Condominiums which is locate right next door to the prestigious Grand Hyatt Hotel.

Here’s the view from the community pool.

Check out this loft unit!

Fully furnished.

Asking price was an absurd 37 million PHP… 2 stories, 2 bedrooms/2.5 bath, with maid quarters. Way out of my price budget, but it was still fun to view this beauty.

I did stay at a Park West unit last time around when I was in Manila, and I do like their build quality and materials, relative to some of the “cheaper” stuff out there…

The rainfall shower is something I wish was more standard around here…

Originally, I thought Park West was “too secluded” and “isolated” away from all the hustle and bustle of BGC, but it turns out I was dead wrong with my initial assumptions. All I had to do was step into the Federal Land showroom next door, and see first-hand what they had in store for future development…

It’s quite impressive to marvel at, really….

BGC and Federal Land are going for a New York City inspired urban cosmopolitan development project…

In addition to Park West (which is already built and operating), we’ve got the following Grand Central Park projects coming down the pike:

Big Apple Mall

Madison Park West

Central Park West

Times Square West

Park Avenue

From Federal Land.

Promotional material inside the showroom…

“Grandness at every turn”.

Central Park West is scheduled to open sometime in November (this year). It’ll be the first of the four newly planned towers to reach completion.

Look, I’m just a dumbass speculator and I make wrong decisions all the time… But I’m also a betting man, and I just really can’t envision a future where owning property around such MASSIVE development projects like the one shown above will lead to regret… and zero price appreciation!

Honestly, I just can’t see the Grand Central Park project failing… it feels way too “high end” and “posh” and it’s located next to the Grand Hyatt Hotel and only 5 minutes (walking) or so away from the future Icone Tower, for crying out loud!

The Grand Hyatt is a 5-star hotel.

The future Icone Tower is obviously unique and going to be a main tourist attraction, no doubt.

From Arch Daily.

Here’s a map (The Grand Central Park projects are highlighted with an orange border around it).

Very close by the two “centerpieces”, indeed.

But even without the Grand Central Park project, I mean, the nearby Uptown Mall is already a nice attraction that brings immense value to the Uptown area…

Uptown at night, during a water fountain show.

To me, the new Grand Central Park project is just icing on the cake, but if it does become hugely successful, wow, I can’t even fathom where property values will be in say 10 years from now… I have no doubt we will be talking multiples of today’s prices.

Easily.

Which is why after even just a few days of “house hunting”, I’ve decided that I now only want to purchase an apartment unit in the Uptown area. So basically, I’ve crossed everything else off my list and and am no longer considering buying anywhere else in BGC.

 

Levi’s Stadium 2.0?

 

That’s what my gut feeling tells me… Absolutely.

 

Wish me luck!

 

Fight On!

{ 12 comments… read them below or add one }

1 JohnNo Gravatar September 28, 2018 at 11:19 pm

I’m assuming only foreign buyers are the potential targets for these properties since locals can’t afford them? With the amount of condos being built how can one prevent oversupply from keeping prices depressed?

Reply

2 FI FighterNo Gravatar September 29, 2018 at 1:51 am

John,

Affluent locals can buy too, so it’s not all foreign buyers. In fact, foreign ownership per tower is limited to 40%, whereas the other 60% is allocated for locals. I actually know a local who owns 2 properties in BGC and will probably buy more.

BGC is tapped out, and these are a few of the last remaining projects going up. There’s no more room to build much more…

In any case, I’m looking for a primary residence, first and foremost.

Take care!

Reply

3 Charles YoungNo Gravatar September 30, 2018 at 9:02 am

Thanks for replying so quickly to yesterday’s message. If I ever manage to escape the ‘trouble and strife’ wife and girls, I’ll definitely make the effort to get through to you via twitter or your website.
Hopefully, between now and 2022, my various junior mining investments will have bourn some better tasting fruit. Currently, I’m keeping an eye on the lithium scene and closely follow those in the know like Rodney Hopper and Joe Lowry to name only a few.
My acquaintance also checked our Djakarta a while back, but there were too many inconveniences. Manila wins hands down.
Cheers

Reply

4 Charles YoungNo Gravatar September 29, 2018 at 3:54 am

Greetings to you from Nancy in the north-east of France,
Many thanks for sharing your recent Manila apartment search including your personal comments and much appreciated photos.
I have an acquaintance who took the plunge and bought a just below the top floor apartment 3 or 4 years ago in the Mandalayong area. On his website, Zen Option, he gives details about the city and the different areas with, according to him, strong growth potential. Thanks to becoming financially independent at a young age, he stopped working and travels all over the world thus fulfilling his travel passion.
At the moment he’s in Manila if you’re interested in potentially meeting up with him! Like you, he knows what happened in cites like Seoul and Singapore and clearly sees similar potential in Manila. I think he bought a 2-bed 55 square meters apartment in a japanese-built new tower for 75 000 euros. I recently started investing in a couple of junior mining companies and have previously been in touch with you and Nick the mining book guy on twitter. I’d definitely be interested in visiting Manila and having a look at eventual real estate investments. Unfortunately, for the moment my mining investments have experienced more downs than ups.
All the best, Charles Young

Reply

5 FI FighterNo Gravatar September 29, 2018 at 4:29 am

Charles,

Thanks for sharing that datapoint, I always appreciate learning more and hearing what others think. That’s so funny, and coincidentally enough, I just talked to someone today who was using Seoul as a parallel as to what Manila might eventually become in the next few decades… The pieces are aligning and today’s prices are still very modest compared to many other parts of the world.

Living in BGC, I really can’t say that I feel like I’m missing all that much. Maybe good Vietnamese food and electric vehicles… but most everything else is splendid 😉

Absolutely, in the future, if you ever get a chance to visit Manila, let me know and we can grab food/drinks. If your buddy is around and available, would be happy to schedule a meet up to chat as well.

All the best!

Reply

6 No Nonsense LandlordNo Gravatar September 29, 2018 at 5:09 am

When peopel say location, location, location is what RE is all about, they really mean, “Who are your neighbors”, “Who are your neighbors”, “Who are your neighbors”.

There is a ton of political risk in HK. You never know what the Chinese will do. You can expect that it will become less and less free-market, and more communist run. Especially if there are many poor Chinese people and more “outsiders”.

Reply

7 JamesNo Gravatar September 29, 2018 at 11:14 am

Jay,
I’m vicariously enjoying your current adventure into becoming an expat. I was curious if you’re planning to live there full-time, and what visa restrictions the Philippines has on long-stays.

Reply

8 FI FighterNo Gravatar September 30, 2018 at 3:45 pm

James,

Glad you are enjoying these updates! I was worried at first this content might be boring and uninteresting to readers, haha.

But if early FI is the dream, well, being able to reduce costs as much as possible (i.e. housing) is imperative. And I’m glad readers are finding these posts useful/interesting.

I have inquired about the long-term stay, so far no real solid answers… I’m guessing I’ll get better answers once I sign a contract since I won’t close until I get all my questions answered and squared away.

Will keep you all updated as I learn more!

All the best!

Reply

9 Josey WalesNo Gravatar September 30, 2018 at 3:17 pm

Jay,
I too am really enjoying you looking into becoming an expat, as this is the exact path I would like to follow 5-10 years from now. My question is how easy it is to manage all of your Bay Area and turnkey real estate while you are overseas for 1-3 months? How do you do this so easily? And you would be able to live in BGC for 6 months of the year or full time given that you own lots of US real estate? Thanks!

Reply

10 FI FighterNo Gravatar September 30, 2018 at 3:49 pm

Josey,

Hey, that’s awesome! Glad this type of path is resonating with readers, since it is rather unorthodox and different from what the masses are doing. 🙂

In terms of rentals, this is why I’m such a HUGE proponent of World Class Tier 1 — My Bay Area rentals are all self-managed and more or less running on auto-pilot. I have long-term tenants in place, they always pay on time, and as long as my rent rates are reasonable, they don’t give me hassle and leave me alone, for the most part.

In terms of turnkey, I sold my horrible Shitcago properties and am now only holding 1 turnkey rental in Indy. That one has wonderful tenants in place, but eventually I may look to liquidate this property. It never goes up in value/rent and isn’t worth my time.

In terms of living in BGC, I guess I’ll cross that bridge when I get there. Tentatively, I would probably like to visit stateside and California at least once a year to check up on things, see friends/family, etc.

All the best!

Reply

11 Josey WalesNo Gravatar September 30, 2018 at 4:33 pm

Awesome. Yeah i’m really starting to adopt the thinking that tier 1 is almost the only way to do real estate investing for someone that wants be free to travel overseas on a whim for 1-2 months at a time which is my dream. I also think the new American Dream (international dream) for me is setting up a life where you are bringing in location independent income in American dollars but spending half the year+ outside of the US. The cost of living difference is just insane how far your dollars go outside of the US. Some of the different cultures are so refreshing too that aren’t just 100% centered around winning rat race and material obsession that’s so prevalent in the US. I’m rooting for you!

Reply

12 FI FighterNo Gravatar September 30, 2018 at 4:41 pm

Absolutely!

You hit the nail on the head and that thought is worth a book/training video on its own.

“Earn American dollars USD and live in a low inflation/COL location.”

My Bay Area rentals will inflate at a rate that far exceeds what will happen in BGC and anywhere else in SE Asia. So, over time, the profit margin (i.e. cash flow) will rise at a much more profound rate, than if I never left California.

That’s the “secret sauce” to really early FI. 🙂

Cheers!

Reply

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