Manila – BGC Car Show (The Immense Appeal of World Class Tier 1)

by FI Fighter on October 6, 2018

in Financial Independence, Philippines, Thoughts, Thoughts, Travel Updates

On this blog, lately I have emphasized and re-emphasized over and over again the importance of focusing our early FI efforts on accumulating World Class Tier 1 assets. Although this concept may seem simple in nature, you have no idea how easily this is lost among the masses out there, even when we’re talking about some of the smartest brainiacs that I have ever met in my life (who still don’t get it and keep getting lured/tempted/seduced to the dark side of buying up shit assets)…

Investing/speculating just isn’t as simple and straight-forward as it should be, unfortunately…

There’s just way too much misinformation out there, not to mention pump artists, con artists, scam artists, bullshit artists…

Who want YOU to part with YOUR money!

You get the idea…

And unfortunately, through my own experiences, I have been: duped, lied to, misled, and made horrendous decisions that nearly de-railed and destroyed my early FI dream entirely.

So, absolutely, I don’t take this shit lightly and I don’t want to ever see anyone else make/repeat the same near-fatal mistakes that I made (i.e. gambling on hopeless junk properties in Shitcago).

On the flipside of my fuck ups, I’ve also been blessed and fortunate enough to invest/speculate on some truly World Class Tier 1 assets that have changed my life for the better (i.e. Bay Area rental property).

Yes, as always, in the Game of Life, you gotta:

 

Live and learn.

 

With that said, it’s no secret to readers that right now I’m staying in Manila (Bonifacio Global City), enjoying my time here, and looking to purchase my first personal residence.

Because of Shitcago, you can of course say that I am proceeding with a lot more caution these days, and trying to make extra sure that I am indeed chasing after the right type of home that won’t have me lamenting/regretting/crying a river in the future.

So far, all my research and datapoints are CLEARLY telling me that BGC is no joke, a serious up-and-coming global city, and a place that is quickly becoming a desirable tourist/expat destination.

When in doubt, follow the “big money” and try and go where they like to go… or will eventually flock to in droves.

Case in point, it’s observations like the following that only inspire more confidence in my decision to invest/speculate in a city like BGC.

Car shows are nothing new in BGC (Burgos Circle), and I even observed this last time around when I was here earlier this year in January, but nonetheless, I caught hold of this today so I figured I might as well at least talk about it…

No, I’m not much a car guy myself (I prefer to just rely on Grab/Uber, thank you very much), and although some folks might get irritated/peeved by these “loud obnoxious attention seekers”, whenever I hear a speedy race car zooming by, I can’t help but smile…

Like this Ferrari…

Ain’t no car show without a Lambo…

Lamborghini Manila.

Porsche.

911, I believe…

Another Porsche.

Yet another Porsche…

Anyway, you get the idea…

But what makes me smile with glee is when I see these type of cars proliferating the Burgos Circle area, to me, it’s just a good indicator that the area as a whole is “high end”.

In other words, the rich peeps wanna be here because the area is:

  • Safe and secure.
  • Desirable/luxurious.

If you’re attempting to make money speculating and you’re looking for a “safe and secure” place to live in, more often times than not, you’re probably going to do quite alright chasing after the above bullet points… and can gain an entry point at a very attractive price.

In contrast…

When I blew myself up in Shitcago, I was chasing after neighborhoods where you would never ever hope to see these type of cars… The owners wouldn’t be stupid enough to put themselves (and their cars) at risk in such a dangerous location… where crime/violence is off the charts…

But I digress (for now)…

And check out this view from Burgos Circle, which lies adjacent to a country club/golf course…

The view is from one of the Bellagio Towers… Overlooking Makati City skyline…

And again, here’s the other view, looking at Burgos Circle.

Look, I know people like to bash on me and this blog b/c I’m perceived to be a “total gambler”…

But let’s be real here — Whether I’m debating speculating on an investment property or personal residence, of course I need to be forward-thinking… I gotta try and look out 10 years from now and and put forth my best guess as to what the long-term trend is gonna be…

 

With Shitcago, I see nothing but troubles/problems/headaches/heartbreak…

With BGC, I see vitality/growth/prosperity/sense of pride…

 

It’s night and day, really… in my own humble opinion…

 

I mean, even if my plans are to live in a unit, I would be lying if I said I don’t think about things like exit strategy… That’s where I fucked up BIGLY in Shitcago… I had no fucking exit strategy… at all… At least not a viable one that didn’t end in tears…

 

With BGC, I feel very confident that property values will keep climbing up and rent appreciation will dwarf anything you’re gonna find in most Class B/Class C pockets in the Midwest of America…

 

Forget all the “cash flow baby” pump artists out there… I hate to be so blunt, but I feel like a lot of these pump artists are full of shit and trying to sell you an even shittier product…

 

I ain’t drinking that Kool Aid no more…

 

I didn’t get to early FI gobbling up mediocre assets that ANYONE and their dog can own!

 

With the benefit of hindsight, my best investments to date have been my Bay Area rental property gems… With BGC, I see a lot of that potential here as well…

 

Simply, BGC is just a nice/clean/safe/modern place to live…

 

And like the pictures show you, there’s affluent owners who don’t mind spending time here… and they have no fears rolling into town in their pimped out rides…

 

All the better for a scrub like me… I just blend in the background b/c I ain’t worth the time of day around here… I am chump change, which is just fine with me.

 

And really, recently I had a conversation with a local realtor and he had this to say to me:

 

If you’re gonna buy something in BGC, you really can’t go wrong in an area like Burgos Circle. That spectacular view, the quietness of the area (due to the golf course), and proximity to everything will always make it a desirable/coveted place to live. It’s pretty easy to re-sell these units… and tourists love staying in this part of town.

Here’s a quick video “tour” for you…

As I already mentioned to you all, my own preference is to buy something closer to the Uptown area because I think that’s gonna be EVEN MORE “high end”, “posh”, and “luxurious” than Burgos Circle, so the price/rent appreciation potential will be EVEN MORE potent in Uptown…

 

But still, Burgos Circle is also pretty dope… and I wouldn’t mind owning something here either.

 

In any case, there’s a lot of “high rollers” who hang out in BGC, which only helps my cause and makes me feel more confident in my decision to “gamble” out here.

 

Yes, I’m looking for a long-term personal residence to live in… But as a safety net, if I can secure a place that offers immense price/rent appreciation as well, I see nothing wrong in locking something down that could one day provide some more “life changing gains” for me.

 

Lesson learned — Fixate on World Class Tier 1 QUALITY.

 

All the haters can continue fixating on shitty cash flow in the most dilapidated/no-growth/high crime/warzone areas…

 

That’s not my bag, baby…

 

I’m following the: Lambos, Ferraris, Porsches, etc.

 

Fight On!

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{ 7 comments… read them below or add one }

1 JackNo Gravatar October 6, 2018 at 8:22 pm

Like your – no bullshit – take on investments. You’re right, literally everyone is out to con the small retail guy and to separate him from his hard earned cash.
With that said, what’s your take on the rising interest rates we’ve experienced in the US? Could this possibly mean that real estate in the US has peaked again now that mortgage rates have showed a rising trend? What does that mean for global real estate if the long term rate cycle has finally turned up?

Personally, I’m seeing this rise in rates as the final “blow off” spike as interest rates turn down again to make new lows into 2023-2025.

Reply

2 FI FighterNo Gravatar October 6, 2018 at 8:33 pm

Jack,

Tbh, I don’t really have an opinion/thoughts on rising rates and what it could mean for property values in the states… I bought at the depths in 2012-2015, so even if prices get slashed, I’d be surprised if a correction would tank prices lower than my cost basis. Also, the rent appreciation that I’ve experienced with these rentals puts me comfortably ahead, even if rents scale back…

For myself, I am much more conservative these days, and if I’m going to buy any property, it would be with 100% cash. No loans. The impact on global real estate, I have no idea, but I would argue BGC is still operating near the ground floor in terms of prices, so I’m not too worried. Even a 50% haircut wouldn’t be the end of the world since the best stuff in town can be had for about $400k or below. My own budget is closer to $320k or so. I could live with and stomach a 50% correction, no problem. Whereas in the Bay Area, $1.5 million an a 50% correction would be a total blood bath.

But who knows… People see whatever they want to see… Everyone who told me Bay Area properties were risky in 2012 think they are amazing buys now in 2018 after prices have gone up 3-4x.

It’s how it goes, I suppose…

Cheers!

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3 FrankONo Gravatar October 7, 2018 at 6:01 am

Just be careful. You tend to be a bit of gambler by nature so what happened in Chicago was bound to happen. No need to always hit grand slams…just try for singles here and there and you’ll be fine

Reply

4 FI FighterNo Gravatar October 7, 2018 at 6:32 am

FrankO,

Thanks, and I knew it wouldn’t be long before a gambler type of comment/message came across.

Ironically enough, when I was going to Chicago, this blog was never more popular and lots of ppl bought into the “cash flow” way of doing things… It’s all my other stuff (i.e. mining stocks) that really gave me that gambler label… and that was one of my best ideas ever, in hindsight.

And it’s also perspective… Nobody in BGC would consider me wanting to buy a property here as “gambling” but I’m damn certain most ppl who have never been here would consider paying $2 million for a shack in the Bay Area a way better deal…

I will always be a gambler, no matter what I do…

Cheers!

Reply

5 georgehpuckNo Gravatar October 8, 2018 at 11:01 pm

Are you allowed to rent the properties you are looking at? IF so will a renter pay the cost of the unit? Ie property taxes, HOA, etc?

Also do you have the ability to do short term rentals?

Is there any concern with the stability of the government in the Philippines?

Reply

6 VNo Gravatar October 9, 2018 at 7:00 am

Super interesting article dude. Keep us/me posted. Was in BGC in 2009 and also this year. Some sweet changes. I’ve been interested in purchasing something in the Philippines.

Reply

7 alNo Gravatar October 15, 2018 at 11:35 am

” Because of Shitcago, you can of course say that I am proceeding with a lot more caution these days, and trying to make extra sure that I am indeed chasing after the right type of home that won’t have me lamenting/regretting/crying a river in the future. ”

hope you won’t be offended by this new comment, and thus terminate for the umpteenth time my blog subscription.

If you move to “cheap” Manila to do a life style price arbitrage compared to expensive CA Bay Area living costs, spending your hard won $300k on a 100 square meter condo in Vanilla is not really correct. You can buy a nice villa with nice garden and swimming pool in a lot of safe hot places in the world, for that money amount…

And I am writing this as a dude who lived 20 years in developing countries, and has the life style of an ascetic monk. I read in your blogs that you also seem to be quite a cheapskate went it comes to spending for living costs, so …

As such I would advise to go a two pronged approach: buy yourself first a simple “corrugated steel roof” concrete block “shack” of respectable proportions somewhere cheap in the Philippines (with a big mall nearby that cover all your living needs). You probably can get such a place for a couple of ten thousand USD, including the land plot. And then spend another 5000 USD to render it very cosy and fun to live in permanently (airco, large TV, high speed internet wifi, etc). You covered the basics while spending very little, and can easily absorb the damage if this turn out to be another one of your mistakes, since you don’t know how the future in that part of the world will evolve. You even can turn it into an airbnb if you move away, or rent it to a local for a small rental fee, since you got the place for no money.

You just managed to arbitrage the living cost differential between the two areas with success, since you still are left with $275 000 on your bank account, to be spent for your shopping mall adventures in Vanilla. $275 000 in a US bank account at 3% interest = $8250 in interest income per year, enough to live one year in Vanilla on that interest income alone, if you are as frugal as you pretend to be. Your remaining $275 000 capital is still safe back in the USA, if your bank isn’t run by a Bernie Madoff clone.

You then can relax and spend good time to search for a good entry point to invest the remaining $275k. Example are on a decent Vanilla condo, or in US bonds, or whatever investment that is able to :
a. provide a constant stream in “dividend income”, through either rental income, or bond dividends or whatever regular money entry system (an ice cream parlor investment in Vanilla with some local palls, e.g.), and
b. also providing a decent exit strategy by simply selling it for the same price or higher price than you bought it, whenever you decide it is time to move on.

You are then consistent with your self declared peon living style reputation, by living in your $25 000 “luxury shack” to arbitrage living costs between the CA and Vanilla area, you live like a king in warm Philippines on your $275 000 dividend stream while your enjoy your ice cream in the sun with some local acquaintances, and if you invest the $275 000 in an instrument that allows a quick exit at the same or a higher price, you are living the dream life.

Your current approach is to splurge large on a high scale condo like you can find millions out there in the wide world, then go live in it, and then not having any income from this investment, excepted a hope in a serious condo price appreciations, for which I ain’t have any idea if this a correct strategy, never having been in Vanilla ….

So maybe you should go to the bathroom, and take a good look at the guy you see in the mirror, and ask him the question ” what do you really want from this arbitrage living thing in Vanilla ? ”

Only you can answer this question.

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