Real Estate Investing – Needle in a Haystack (BGC)?

by FI Fighter on November 29, 2018

in Real Estate Thoughts, Real Estate Updates

In my last post, I mouthed off about how ridiculously expensive I feel like many World Class Tier 1 real estate assets are selling for in today’s market…

Now, please keep in mind, real estate is a very broad asset class and I know how difficult (simplistic) it can be to paint a sweeping generalization of the entire sector…

So, please bear with me…

Anyway, with all that said, I’m sure there are certain pockets out there in the world where investors/speculators can indeed find good deals and possibly even get the best of both worlds:

  • World Class Tier 1
  • Positive cash flow

In 2018, the above COMBINED bullet points might seem like a pipe dream, but maybe there are some needles to be found in some haystacks somewhere?

As readers may be aware, right now I’m living in Manila, and more than that, I’ve kind of fallen in love with Bonifacio Global City (BGC), and even wrote a long post about it being a top conviction idea of mine

Now, to be perfectly clear, as it pertains to BGC, I’m entirely interested in buying a property there to lock down a personal residence for myself… In other words, much of the “analysis” I would typically perform for rental properties, I didn’t harp on as much here because it’s not my main (primary) objective…

Even further, my own plan is to buy a property in BGC “straight cash homie”, so no loans or anything like that…

Anyway, in case you were wondering, here’s how the numbers MIGHT LOOK LIKE for new construction in BGC…

 

Please note: In the example above, I assumed a 30 year fixed rate mortgage, which may (or may not) actually be obtainable for investors looking to buy a property in BGC; I have never attempted to take out a loan with a Filipino bank and to my knowledge, they typically offer 15-20 year notes… I have no clue what the interest rates are right now… The numbers I used are what I used to qualify for back home in California…

Further, I don’t actually own anything in BGC yet, so any HOA/property tax/insurance numbers are just “fill in the blank” figures for now, and could be totally off base from reality. Yes, I have asked around and gotten per square meter quotes, but I won’t know for sure, until I know for sure, if you get my drift… Quotes are quotes meaningless…

As ALWAYS, please do your own due diligence and research before making any kind of investing decisions! Best to assume I’m full of shit and have no idea what I’m talking about…

 

Obviously, compared to a few years ago, the above cash flow numbers for BGC don’t look “astonishing” but compared to many other World Class Tier 1 cities around the globe, in my own humble opinion, they don’t look half bad either…

 

I mean, check out the Bay Area, in comparison…

 

Apples vs. oranges, I know, I know… but damn, the difference is like night and day…

 

But I’ll let you be your own judge of what the numbers are saying/suggesting…

 

Anyway, I’m obviously totally smitten with BGC right now, so I may not be seeing things clearly, and to re-iterate again, I really want to own a personal residence out here to live in…

 

Still, it’s kind of nice to know, even if I had to, worst-case, I should be able to rent out a unit in BGC and secure some decent cash flow for my efforts…

 

Now, I know BGC isn’t for everyone, but the whole point of this post (and essentially all my real estate related posts) is that if you’re in the market for rentals/cash flow, you just have to do your homework and look around to find some worthwhile deals…

 

It should go without saying, but in case I wasn’t clear, “BGC” and “Bay Area” should represent nothing more than placeholders for readers, especially if you don’t have any interest in real estate in those areas… Substitute accordingly. Hopefully, the “general idea” and “main points” are useful to you, though.

 

But if we are going to address BGC itself, I strongly believe it’s an emerging city that will continue to shine brightly in the foreseeable future…

 

Most importantly, I’m a vehement believer that the path to early FI can definitely be made possible by owning World Class Tier 1 real estate assets.

 

These days, I no longer have the time/interest/bandwidth/tolerance to fuck around with dogshit real estate and only want to own the “best of the best”.

 

I’m following the rich kids’ lead, and I want to own property in their backyard… and/or in the locations where they like to bring out their toys to play in… and show off…

 

For lazy landlords (like myself) who want to be able to travel the globe and self-manage rentals from afar, NOTHING beats World Class Tier 1 real estate for low/no maintenance hassle.

 

I don’t give a shit what the “cash flow baby” pumpers/shillers/spruikers have to say, most of them have agendas and are trying to make BIG $$$ selling garbage to their clients… They can go fuck off…

 

My own experience/life lessons have taught me that for the Average Joe who really has little/zero interest in landlording (but still wants to be involved with owning physical rental property), it doesn’t get much easier (better) than owning World Class Tier 1.

 

The caveat is, of course — You gotta buy right. The cash flow number have to work!

 

Easier said than done…

 

But I’m just saying, there are STILL potentially deals out there for those who insist on dabbling in rental properties, even during the very late innings of this epic bull run in real estate.

 

Fight On!

{ 1 comment… read it below or add one }

1 JohnNo Gravatar December 1, 2018 at 2:42 am

I saw a 3bdr/2ba (124 sq meters) in Saigon for $1M (and yes that is USD). Did not have time to explore more but isnt that crazy?

Reply

Leave a Comment

 

Previous post:

Next post:

Copyright © 2012 FI Fighter