How it Works
"Real estate investing, even on a very small scale, remains a tried and true means of building an individual's cash flow and wealth."
By investing smartly in certain condominium projects in the Philippines investors are able to generate 80% to 85% annualized Internal rate of return (IRR) . It's an opportunity created by the Philippines' booming economy, and one that uses a unique, staggered downpayment model.
Several property developers in the Philippines offer flexible payment schemes in their condominium project. A staggered down payment means a buyer or investor pays a small amount every month usually about 0.5% (half a percent) into owning a condominium project for 3-4 years.
The developer uses money from several such buyer/investors to fund part of the construction. Typical price appreciation for a condo in the Philippines over the past several years has been roughly 7%-8% annually, and that is a very conservative estimate. This growth is expected to continue. As development nears completion, there would roughly be a 35%-40% overall price increase in their property.
At this time enduser-buyers pay the remaining balance which is usually 70%-80%, with cash or bank financing; investors on the other hand flip their units in the condo, before they have to pay this 70%-80% balance creating an annualized Internal Rate of Return (IRR) of 80% to 85% percent.
This is because, while the initial investment is a small amount paid in equal monthly installment payments, the appreciation is at the face value of the condo, and not on the actual amount invested, hence the IRR is incredible.
For example,
- An investor called John invests $300/month into owning an under-construction high-rise condominium unit with a face value of $70,000.
- The developer uses these monthly payments from John and other buyer-investors to fund construction that requires about 4 years.
- John decides to flip the property after 2 years; after investing in a staggered way a total of $7,200 ($300 X 24 months).
- Meanwhile, the unit has appreciated about 8% annually. That means its current market value is about $81,600.
- After costs and expenses, such as brokerage fees and transfer cost his net profit is still roughly around $7,000.
- That's a whopping 85% Annualized IRR on his actual monthly part payments.
The pre-selling model is a growing trend in the booming real estate industry in the Philippines, and a number of investors, local and foreign buyers, are starting to realize how it can create them massive wealth.
Investment Steps
Select Property
Select pre-vetted properties offered by PH-Realty at a special discount from the current market price. We offer special prices through our program, that you cannot find anywhere else. Properties listed by us are carefully researched to ensure safety. Properties are only listed after the project has been issued a Certificate of Registration and the License to Sell by HLURB (Philippines Housing and Land Use Regulatory Board). An investment specialist from PH-Realty will recommend you the right property and answer any questions you would have before purchase.
Purchase Property
After you have selected the property, you reserve your property by paying a reservation fee by remittance or in person and sign and submit all required documents. At the time of reservation you can choose one of the various payment schemes offered by the developer. Your investment specialist will guide you through all the requirements and help you choose the right options.
Sell Property
PH-Realty's marketing division provides end-to-end services to sell your property. If you choose to use our service, we will get your approval on the resale price before completing the transaction. Once your property is resold, the net sale proceeds can be directly deposited into your bank account.