🏠 Guide to REAL ESTATE INVESTING for BEGINNERS (what, why, how) | Finance from Scratch 💰 #Finance

yo what’s up friends welcome back to an episode of Finance from scratch where we learn text-decoration: none;">Finance Concepts from scratch guaranteed beginner robot friendly if you’re new here what’s up my musical today we’re talking about Real Estate almost all episodes of #1a73e8; text-decoration: none;">Finance from scratch will follow this discussion flow we’ll talk about the what the why and the how for this CashNews.co we’ll start with what is Real Estate what is Real Estate investing why do people invest in

Real Estate why is it a thing and then once you understand the what in the wild it’s all about taking action how do you actually start investing in Real Estate but before we start I want to say thanks to RLC residences for supporting the series and for making

this CashNews.co possible RLC residences is the residential division of Robinson’s land Corporation and in this CashNews.co we’ll be featuring one of their ongoing projects sharer Valley Gardens a residential property in Sheriff Valley the first smart Premier Community and lifestyle

destination estate in the East located along Ortigas Avenue Extension they recently launched building 4 and later we’ll do a quick mini tour and use them as an example for a potential condo investment and of course some important disclaimers I am not a financial advisor nor am I a licensed

Real Estate practitioner I’m just super passionate about personal Finance and I’d love to share the things that I learned mostly from personal

experience in the hopes that it helps you guys understand this complex overwhelming yet important topics but still please don’t forget to do your own research this CashNews.co is not Financial or investment advice form your own opinion so that you can properly decide on what to do with the

information you learned from this CashNews.co also Real Estate can be illiquid and demands longer term commitment from investors relative to other asset passes so supported and are thorough when making your investing in purchase decisions to avoid making costly mistakes I’m

also still a beginner with minimal property investing experience so my goal for this CashNews.co is just to share the super basic foundations of Real Estate investing so that we can learn and understand this topic together but for now Okay nataya g let’s get started okay so

what is Real Estate investing this is Real Estate Real Estate is defined as the land and any permanent structures like a home or improvements attached to the land whether natural or man-made real refers to real property so real property Union

anything with my lupac attach done plus all the rights of ownership including the right to possess sell these and enjoy the land personal property in a month is in the form of for example this phone clothes furniture and I wanted to mention this for the legal distinction between real property and

personal property so in other parts of the definition is the estate which is referring to the possessions or property of a person in other words and then just a refresh investing is the act of putting your money into an investment vehicle in order to generate Income so putting this

all together Real Estate investing is when you put your money into owning property in order to generate Income and by using this definition home ownership or buying a property to live in it it’s not really Real Estate investing now it’s

not an Income generating investment you can argue that you can sell the property in the future but still I want to emphasize the importance of identifying the purpose of buying property as eBay strategies and the things that you’re going to prioritize if you’re buying a

property as an investment versus you’re buying it something for personal use for investment temporary we want to prioritize being cost efficient Panama maximizing years but for personal use it’s more of an emotional decision like sometimes we’re not the most cost effective we just

want to treat ourselves therefore we switch on certain Furnitures you get now let’s dive deeper let’s talk about the different types of Real Estate very first building block land Lupa as in vacant structures are building on top of it it’s undeveloped then

residential residential is any property that’s used for residential purposes in other words Condominiums townhouses duplex third commercial this is property that’s used for business purposes Gasolina Han malls restaurants fourth industrial this is any property that’s used for

manufacturing production distribution storage then this is not a specific type of Real Estate but it’s kind of related Real Estate Investment Trust or reads so REITs are companies that own Real Estate properties and when you invest in and

read you’re essentially investing in the company that is investing into the Real Estate property so in the requisia it’s similar to mutual funds and uitfs but the difference is the underlying asset that’s being invested in Mito funds and uitfs usually in Universal

is stocks and Bonds for reads Yuma underlying Investments is Real Estate property so it’s a way of diversifying into Real Estate without really being exposed to the risk of owning actual Real Estate property

why do people invest in Real Estate Real Estate is a tangible form of investment as compared to the other investment passes not like when you’re investing in stocks when you’re investing in Bonds you can’t really see it when you

say you’re a stockholder in Jollibee for the most part that’s it it represents like an ownership in the company but you can really say this chicken Joy is mine I own that chicken Joy but when you own Real Estate you can actually see it you can actually develop it rent

it out live in it it’s a very tangible form of investment now I want to talk about some important concepts related to Real Estate investing the first one leverage so as a dictionary definition Leverage is an investment strategy of using borrowed money to increase potential

return of an investment in other words it’s making use of someone else’s money in order to acquire or like purchase Income generating Assets so what does this mean how do you how does this work before we talk about about leveraging Real

Estate let’s make the example smaller Credit cards which is also a form of Debt that more people have experience with to be nothing you want to buy an aircon that’s worth 30 000 pesos you have the option to pay it in full in cash right now or

zero percent installment over the course of 12 months cash discount same price either options explanation I’ll pull up my spreadsheet here parama calculator so let’s pay it through installment in 30 000 pesos divided into 12 that’s 2500 pesos per month but while we’re

waiting to pay it off it’ll get an attention into a high interest Savings account that gives you five percent interest per annum so by doing this you’re able to earn an extra 550 pesos by putting your money in a 100 Savings account Muna while

you’re paying for it in installment so this is a pretty simplified example but there are three concepts that I want to point out to explain leverage the first one is the time value of money so the money that you have at this moment is at its most valuable if you have 30 000 patients right now

it’s a lot more valuable than 30 000 pesos next year why two main reasons the first one is Inflation the Inflation is eating up the purchasing power of your money not the second is open opportunity cost and simply putting go in with that 30 000 pesos maybe

you could have bought a fridge or more groceries you could have gotten shoes you could have saved more and related to opportunity costs is the second point which is in this example in a Savings account so that we could earn an extra 550 pesos you might say it on that London

it’s not worth the hassle but imagine applying this into a bigger example like Real Estate where you’re dealing with hundreds of thousands and millions of pesos the point here is that instead of immediately tying up all your money into an investment property you can

leverage your money to maximize the mileage in generating Income maybe one million pesos upon down payment Motors the rest of the money that you have put in your business put it in something that Yielding more than the Loans you’re still gain

the initial Profiting so let’s say for example the bashara Valley Garden Studio unit is 4 million pesos two scenarios let the first one you pay it in full 4 million pesos in cash or you take out the Loan to speed of slowly on 20 down payment hundred thousand

pesos tells you monthly amortization according to this calculator is 41 000 pesos let’s say after a year you’ve already paid 800 000 pesos plus 492 000 pesos equivalent to 1.3 million new value of the property um to 4.5 million pesos for the cash payment returns more on your 4 million

pesos is about 12.5 pero you can turn small on the home Loan example is actually about 38 to 39 so this is leveraged in action you’re controlling a 4 million peso property with only 1.3 million pesos out that you’re slowly paying off no in essence 500 000 on the initial

money that you took out and related to this when you take out a Loan is that you’re able to lock in the property price you don’t need to wait until you have the full amount saved already to purchase the property in Liam Bank five years from now I already have it saved

up online price and property I hope my explanations take note that a lot of the things I mentioned are simplified and condensed just to help me explain better but still it’s important to Crunch the numbers and run the calculations if it makes sense for your own situation I say it still

depends on your case to case property to property basis not all property purchases are a good deal it’s a bit more difficult to find the good deals but conceptually this is how it works next concept location Real Estate is all about location location a mansion in a very

remote Province might cost the same as a small condo in BGC or Makati location is a very significant factor that influences the value of your property you can always demolish but you can never move the property in related to location is pricing and for Real Estate properties you

can look at it through price per square meter and a way to understand how Real Estate is priced I want to introduce three more Concepts zonal value fair value and market value so market value is the price that the property is transacted in the market so I think an actual price on a

buy and sell and it’s heavily influenced by market factors supply and demand and sometimes reflect of how much the properties so fair value is the actual worth of the property or something that’s close to the actual worth it can be derived fundamentally now you can actually have

supporting evidences on why the property is worth a certain amount let’s say for example pictures or it’s furnished already outside of Market forces intrinsic value of the property is for the purpose of Taxation I said about when you’re gonna pay Taxes you declare

how much it is that you made an Income owner how much a value of a property owned I said people would underdeclare the value of their property value is that price that the government like dictates on how much a property is worth but I know minimum tax that you should pay because

it’s super transpired and we don’t have a database of the prices at how much transactions occur here in the Philippines as opposed to the us so you can say that the bir zonal value is the minimum asking price of this seller that can help also people who will buy the property judge how

overpriced your value of the property is number three due diligence when it comes to Real Estate investing there’s a lot of things that can go wrong and that mean potentials or the person who owns the title is not actually the person you’re transacting with or there are

also scams or so many different problems so due diligence is an investigation audit or review performed to confirm facts or details of a matter under consideration and the way that you can do this is to have a licensed Broker and also a lawyer that can assist you with the

Real Estate transaction process but even without these people you can also perform your initial due diligence on your basic I’ve found two resources that you can actually follow to perform basic due diligence I’ll include it in the description below and then of course

panuba how do we actually invest in Real Estate so there are three Investment Strategies when it comes to Real Estate and you can honestly do a combination of this depending on what you’re planning to do first one is buy the lease so you buy

a property then you ask a landlord you let someone use your property and then in exchange they pay you rented more or whatever it is next Buy and Hold so you buy a property with the expectation that the price or the value of it will appreciate in the long run so an example of this is land banking

so literally you buy parses of land and then you just let it chill just let your money chill there over a course of how many years and then when the price appreciates now and you’re ready to sell and then third buy then you build and then you sell so you can either buy a property in awalapa

it’s vacant then you build something on it and then you sell it or you buy a property that has something that’s dead then you build something that’s better or you renovate it and then you sell it so those are the Investment Strategies now what are the things that

you need to keep in mind before you actually buy and one of the things that I always talk about in this channel which is also applicable when investing in Real Estate is for you to start with your goals the first thing you should ask yourself is why are you buying you know

what’s the primary purpose of the property that you want to buy because depending on what the reason is and the things that will factor into your decision on whether you decide it’s a good buy or it’s not will differ next when will you liquidate what’s your exit strategy

supposing it’s for investment purposes no how long do you plan to hold on to this property for because depending on that also you have to manage your Cash Flow and how much you can actually afford to put into a property and how that affects your other financial decisions and

in line with these plans and your exit strategy you also need to put some fallbacks I say what if you plan to liquidate this property in five years ten years what then is that going to cause problems in other parts of your life and then third can I afford it so chamber you might have a dream

property in my building but when you crunch the numbers make sense because in addition to The Upfront cost of purchasing that property Taxes and obligations in just the cost of ownership menopause closing fees transfer tax Real Estate property tax annually that you

have to pay by Insurance that’s my legal fee Spa Broker fees you minimize your risk into making this investment decision by crunching all of the numbers and Accounting for every or not and as a related question you should also ask yourself

how will you pay will you pay in all cash or will you take out a Loan making use of Credit and if you decide on taking out a Loan then you should do the needed prep work in order to be able to take out the Loan in the first place

so what if for example property approved one of the things that you can do is to get pre-qualified for a Loan so you can do this ahead of time before you even start searching for a property but you know the budget that you’re working with Okay so we’ve discussed the

things that you need to consider before you actually start looking now let’s talk about how to start your actual search this step should be a bit easier now because you have parameters that you’re basing your decisions on let’s use the projects of RLC residences to do an example

scenario the rest of my discussion assumes that you’re looking to invest in a residential property in a condo but some of this different types of Real Estate so the first thing to consider is the property condition or the project status and this is important to align in terms

of your budget and also your timeline like they need to to buy the property now or okay for you to wait for it to be completed in five years generally you can invest in Residential Properties in either the primary Market or the secondary Market primary Market this is direct from the developer

either pre-selling it’s a concept or ready for occupancy put it in from the secondary Market where there’s already a previous owner that was Valley Gardens it’s still at the freestyling stage in first building they actually launched last January 2020. that was your most recent

launched in La back in March was building four the second thing you need to consider is the location of the property is it in the province nearby establishments future developments in the area and I mentioned this a while ago but you can always demolish the house but you can never move the property

once you buy into it and because of this It’s always important to know and understand the location that you’re buying into and for me I personally believe that you need to do a site visit you actually need to go there to see the location because there are people who buy Real

Estate properties without knowing knowing anything about the location they’re buying into maganda pictures once they get there it’s not a good buyer nowadays you can work on online tours on our websites of these developers I personally went there to check out the showroom

I’m in like the showrooms so we’re gonna check out the rooms I drove around the side to see to learn more about the future developments in the area so the project is an 18 hectare mixed use property of Robinson’s land Corporation it’s located in kaintaluza along Ortigas

Avenue Extension here’s a map of the nearby destinations lrc stations and my proximity shop to business districts schools and hospitals Valley Gardens that was my counting business establishment and my Starbucks Stone my contest Dunkin Donuts the third is the developer reputation what are

they known for what are the usual problems that you’d encounter with them anymore strong points in Target demography that usually lives there it’s suitable to your lifestyle RLC residences is the residential division of Robinson plan Corporation they have a reputation of building

beautiful and well-designed homes so take for example some of their projects the residences at the Westin Manila Sonata fire blocks think Chimes ignore your residences and they’re known to partner with top-notch industry experts when it comes to the architectural work civil work structural

Plumbing so you can rest assured that when you’re buying with Roc it’s of quality the fourth is the project concept amenities and product offerings you can see now not prioritizing Wide Open Spaces that was landscape shop with lots of greenery so here’s a list of the amenities

that is included in this project Clubhouse drop-off Lounge reception area it looks like a resort my fitness center Nasha game rooms yoga and dance studio it works at the area barbecue and Grilling station so there are five unit types that they offer there’s a Studio unit one bedroom one

bedroom and balcony two bedroom and a two bedroom with balcony they are already built in Smart Home capabilities you also have the option to buy a parking slot suppose these are the payment terms now depending on the payment term that you choose there are also resulting discounts if you guys are

interested to invest in a unit at chair Valley Gardens or honestly at any property of RLC residences you can inquire with their property specialist you can visit visit rlcresidences.com you can also follow RLC residences on Facebook Instagram and YouTube soyun we’ve discussed Real

Estate from scratch this was just a super quick overview in future CashNews.cos we’ve barely scratched the surface of Real Estate investing but I want to know your thoughts what do you guys think of this new series what do you guys think of this episode are there

other topics that you still want me to cover in future CashNews.cos share your thoughts in the comment section below but yeah hope you guys learned something new thank you guys so much for watching I’ll see you in the next CashNews.co bye