Money Sense July 2010 issue Q&A with Eden

1. When and how did you get started in real estate investing? And what attracted you to this field?

It was February of 2008 when I first attended Larry Gamboa’s Think Rich Pinoy Seminar. Before then, I had been looking for local books on real estate investing after reading Robert Kiyosaki’s Rich Dad Poor Dad.

At that time, I was still employed as a process engineer in a semiconductor company. Even though the pay was good, there was something lacking that I couldn’t find within the confines of my cubicle.

I got into the stock market and got burned in the mid-2007 market crash and hadn’t recovered. My boyfriend then (now my husband) and I partnered in a dimsum food stall in the place of his employment that later on included a waffle cart. It lasted for just 6 months and we realized that food business is not our forte.

Then we bought our first real estate investment--a condominium unit in Taguig. To save on the acquisition cost, I applied as an agent. But I didn’t realize until 6 months later that I just taken my first step into my real estate investing career.

It was the possibility of doing something a lot different from what I was doing then that attracted me to go into real estate investing. I fell in love with the thought of managing my own time and was inspired by the success stories I had read in books.

I went as far as to discontinue my master’s degree in electronics engineering in favor of pursuing the path of entrepreneurship. I didn’t have any sales background, except for the sales training I got by being an agent - I even considered selling as taboo, but later on realized that it was one of my core gifts that fits perfectly in this field.



2. What would you consider your first big win or deal?

I consider my purchase of a Quezon City townhouse my first win. I bought it from a bank at 50% off market value through an auction and paid a downpayment of 20%, which was paid by an investor. I then sold it at 70% market value on a flexible term scheme (rent-to-own) after 7 weeks of acquisition, and with that I repaid the investor. Even if I didn’t get a huge amount upfront from that deal, I converted what I read in theory by actually doing it.



3. Who do you consider your mentors and what’s the most important thing you learned from them?

I have 5 mentors.

Larry Gamboa was a phone call away on every deal, especially on my very first deal. He pointed out the importance of finding one’s core values and stressed on working within them. Our weekly meetings taught me the value of commitment and focus.

Trace Trajano provided weekly coaching sessions that focused on the proper mindset and working on the business and not in the business.

Bo Sanchez broadened my comfort zone by instilling that the purpose of acquiring wealth is for you to be a blessing to others.

Nelson Terrible and Randy Manaloto gave me a vision on what I can do and what I can become if I continue what I am doing now.



4. Which books, websites, and other resources do you recommend for beginning investors?

Visit my blog renttoownproperties.blogspot.com to get an idea how I market my properties. You can also read through askeden.blogspot.com, tracetrajano.com and thinkrichpinoy.com for real life experiences and practical answers to specific real estate questions. Also check foreclosurephilippines.com for a list of bank acquired properties for auction.



5. How much can one expect to earn in real estate?

It ranges from nothing to a few million pesos depending on which path you take.



6. What are three different ways one can earn money in real estate?

The most traditional way is by being a broker or an agent which is how I started and learned the basics on real estate transactions. Income is usually by percentage of the selling price.
Wholesaling a property requires taking control of a property and selling your rights to the property to another investor or an end-user. You dictate how much income you receive. It is paramount that the acquisition price be very low so that you are also able to sell low which is a factor on how much income you can command.
Retailing is like wholesaling, the only difference is that you get to renovate the property and you have different target end-users. You dictate both how much income you receive and how you will receive it – through cash, or in trickles in the form of a monthly passive income.



7. Per your experience, which of these strategies or investment models gives the highest chances of succeeding? Gives the best returns?

The easiest way and will give the highest success rate is by being a broker/agent. Retailing gives the best returns.



8. What are the risks involved in investing in real estate investing?
And what can one do to mitigate those risks?

Getting bad deals and “tenants from hell” (as Larry Gamboa stated in his book Think Rich Pinoy) top the risks involved in real estate investing. Doing your due diligence and getting a good lawyer to keep you protected through the contracts is the best way to mitigate these risks.



9. What would you consider your worst investment mistake? What lesson
have you learned from that experience?

In one of my first real estate deals, I entered into a partnership without having a contract and was left out during income distribution. I charged it to experience. And from then onwards, everything must be in writing.



10. For the beginning investor, what advice can you give to get started?

I get a few questions like, “We are looking at the same lists in banks and newspapers, how do you spot good deals?” I’d always say, start by familiarizing yourself with the prices of properties for sale or sold in your own area or the area you want to focus on. Walk around the neighborhood and ask around, network with brokers and look at online
sites where these properties are posted. Naturally, the opportunity will present itself in the form undervalued properties for sale or of neighbors seeking your help in selling their property.

I describe myself as a perennial student because I continually enroll in classes for self improvement. Invest on yourself by attending courses or seminars specific or supplementary to real estate investing.

Seek mentors. Accelerate your learning curve by asking questions or partnering with someone who have done what you want to do.

Lastly, be persistent. Do not stop at the first sight of failure. At 24, I overcame barriers and accomplished a feat that I hadn’t even dreamed of myself--all because of my persistence, and I’m sure you can too.