Real estate is a type of asset which you can buy now, and later it can help you in growing your net worth and in accumulating wealth.

And I can’t stress enough its lifetime of opportunity.

Most of the people in the Philippines own property/ies already. It may come in different forms:  From inheritance, owned and  held for a long time,  mortgaged  or bought in cash

Noli Manuele Alleje is one of the renowned speakers, real estate investors, and foreclosure experts when it comes to developing and buying foreclosed properties. It hit me when he made this striking point: There are no fixed formulas when it comes to what you want to do to your property.

You can develop it, and eventually flip it. If it's a raw land, you can develop, then get the proceeds along the way while you're developing it. It may sound simple, but believe me, securing all of those permits and talking to contractors would give you a headache.

But there are ways to maximize real estate, here are some ideas:

Invest in rentals 

This is the most satisfying part when it comes to real estate. You can always activate the term called passive income when we talk about this strategy. You can acquire a piece of land in a strategic area. Most of the time, commercial businesses are looking out on locations along highways that potentially has a lot of foot traffic. You can buy land through cash, mortgage loan, etc. The inflow strategy are as follows:

• Acquire land (raw lot) then sublease the whole lot
• Acquire land (raw lot) then develop the land either subdivide, or put a structure then sublease it.
• Lease the property (raw lot) then sublease
• Lease the property (raw lot) develop then sublease

Remember, all of the above-mentioned strategies require Lessor's permit (business permit for Lessor) so your tenant/tenants can secure their respective business permits as well. I'll be talking more of that in my next article.

Fix & flip homes

If you're a subscriber of Noli Alleje, the El Subastajero, has stressed this in his foreclosure business.

• Look for listings in the bank. There are listings in the branch listed as Disposable Assets. Most of the time those foreclosed properties are below the market value that the bank needed to dispose or liquidate to recover the loss from those assets. But it also goes thru bidding. You can also ask the assistance from a Real Estate Valuator / Appraiser to pursue your point to the real value of the property. But, it would always boil down on the offers.

Crowdfunded real estate

You can set-up an investment vehicle or a pool of investment for you to acquire some properties that you think can help you generate income. It may be a commercial or residential property. You will need a lawyer and a money guy to consolidate the paperwork and the pool of funds when the security that you've made would generate a return already.

• Now, this is not yet a fund management or REIT per se. Only listed companies are allowed or already regulated to solicit investments from the public as they can offer their properties that are already income-generating coming from rent that they are offering to the public.
• It has the same concept as stocks, the only difference, is that instead of shares of the company that you will acquire, you are going to buy shares on malls, hotels, and any leasing vehicles that the company or the listed developer owns.

Represent buyer or seller

This pretty much gives you an idea of how negotiation works in this industry -Representing or being a broker on the buyer side then negotiating price with the broker on the seller side. Being a trustee, you can also gain a piece of the commission.

• It's basically a brokerage house, your role is like a middleman to represent either buyer or the seller and transact on their behalf to sell or buy properties for them and authorized by them.
• This is a service-oriented business that takes a lot of contacts for listings. To ensure the significance also, you must be a licensed broker or at least the structure can be a corporation represented by a broker then under you are Salespersons under that broker.
• There are necessary structures as well like being a sole proprietor or partnership LLC.
• You can earn via commission when the sale of the property has been made. 
• Standard broker's fee or commission is 5%;
• You can represent your client from an acquisition or leasing perspective, depending on their needs.

 
Property management

Whether you own the complex or not, you can represent the owner in dealing on his behalf pertaining to his property. Some industry players conduct exclusivity clause that they are the exclusive sellers/brokers of the said property.

• In this area of expertise comes the technical side of the real estate part.
• This is a quite intricate part due to the requirement and expertise if you want to run a property management firm.
• This requires servicing clients on repairs, renovations, etc.
• You have to have your engineering team or outsource contractors in regards to this one.

All of the mentioned sides of real estate gigs are subject to your preference of course. You can have all the services mentioned above to maximize the potential of the industry. You just have to remember to strike a balance between the business side and the technical side.

Remember, assets always generate cashflow whether it would be personal or corporate.

Image source: Shutterstock

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