Manila, Philippines

Ask Geri: Two OFWs Want to Invest; Another Juan Will Migrate

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Hi Geri,
I am an OFW for 7 years and wanting to settle in our homelands by venturing into a piggery business. I’d like to plot my business plan so may I know the details you have on costs per piglet, feeds and live weight in slaughter houses. I hope to hear your thoughts on this matter. – BPM, Saudi Arabia(via FB page)

Hi Geri,
There’s a possibility for me to relocate to another country and stay there for the foreseeable future. I have some investments in stock market and mutual funds. I’m comfortable of leaving them there and just check on them periodically, but is there a “better” play (I generally own blue chips, should I pull out my stocks and transfer all to mutual funds, or sell everything and start again in another country).
Crowded Mong Kok by Luke,Ma, on Flickr

Also, how realistic is it to profit from renting out condominiums? We bought a property in Eastwood for P10M back in 2011 originally for family use. After 2 years of using it we decided to rent it out for P30K a month. With that it will take us 28 years to pay-off the condo using just rental income so it does not seem profitable. Is it time to call “bulls**t” on these agents selling properties as investments?  – VD, Manila (via FB page)


Hi Geri,
I am an OFW here in UAE, I want to buy some properties in the Philippines (apartments) and I don’t know if the recommendations are really worth the selling price. Since I am outside the country, I don’t get to personally check the properties being offered to me. Your ideas please.
– OFWT (Twitter handle withheld, asked via Twitter)

Thank you for your inquiries, and for your trust to even consider asking me. First off, I’m far from being an expert on piggeries and real estate, I’m just a talkative guy who shares his investment adventures and learnings for others to learn from. I’m just someone like you guys in this journey towards financial freedom.

To BPM, on the piggery,

Apologies but I cannot give you today’s market prices since we’ve long stopped our small piggery ad-venture (circa 2014) and we have yet to resume with it. Though as we’ve posted before, we’re seriously considering going back to this business if we can work out the kinks in our processes. Nonetheless, let me lead you to the following posts that might help you:

In brief, we relied on our relatives from the province to take care of the piggery for us. We also used pre-existing structures (like pigpens, etc) as such start-up cost was lower than usual. We discontinued the piggery after the first try due to lower than expected returns (our share was just 3.54% ROI, the caretaker another 3.54% which if you think about it is decent enough %wise but very low in actual amount).

We held on the pigs for 3 to 4 months, average weight when we sold them was 76kg, average selling price was at PHP115 (live weight per kilo). Prices of feeds back then were at Starter (P1041), Grower (P983), Finisher (P921). This still excludes cost of vaccines and medicines.

I’m not familiar with your circumstances abroad, but if you could hold on a little longer, and if you have someone you trust who can run things for you here in our country, I suggest you go ahead and get started with your piggery (it’s good that you’re preparing a business plan) while you’re still gainfully employed there.

You know, I’m not really a fan of totally closing one door (employment) and opening another one which carries more risk (self-employment). As much as I can, I’d do both in parallel, and just quit my day job once my business is more stable. I leave it up to you. Good luck and may you have a richer life!


To VD, on your investments

As we’ve discussed, lucky you that you don’t have to pull out your investments and yet you can migrate to another country. I suggest you go back to your investment OHA, specifically your objectives and horizon as to why you opened your stocks and mutual funds investments.
If I were you, I’ll keep my investments here intact, as long as I can monitor them online, with the thinking that my objectives have remained the same in spite of an overseas opportunity. I’d prefer to have both stocks (my own trading) and mutual funds since I prefer to have an experience on both.
Likewise, you’ll never know if suddenly, things overseas don’t work out as planned, at least you have your investments here in place and you don’t have to start all over again.On the rental of condominiums, you mentioned that the original objective was to reside on that property, which your family did. With that, I think the family considered it as a sound investment, that it was worth it even if you’ll just live in it. It was just an afterthought to rent it out.
Admittedly, “investments” is loosely used by sales agents to make a condominium sale and I advice all buyers to take this with a grain of salt. Now, the question on rental income indeed being sufficient to pay off the monthly amortization of the condominium (thereby making it self-liquidating), well it depends on the location, and whether the property was bought at a very low price (such as pre-sell).
Though I’m pretty sure NOT ALL condominium units are self-liquidating in that regard. Personally, a 30-year breakeven period is indeed a no-go for me, but as you mentioned, the rental objective was just secondary, the primary objective was really to live in it. If I can bring this down to say 10 years, then I’d probably reconsider since at the end of 10 years, the property is still mine even if someone else paid the amortizations. Maybe we’ll find out by next year.

Kiyosaki will say you only consider as investment if it brings you positive cash inflows. I respectfully disagree. Some buyers get condominiums to live in it, for comfort, proximity etc, for them a better alternative than renting an apartment, and a more achievable objective than having a house and lot. If Juan finds these reasons worth it, if they get to save money compared to their present situation, then I’d say getting a condominium was a good investment in that regard.

Lastly, we should also consider appreciation of real estate values in the equation. Maybe the P10M property your bought almost 5 years ago has now increased in value. In that regard, the P10M was also a sound investment.


To OFWT, on potential apartments,

This is actually one of my investment goals too, apartments! As we’ve discussed, one way is to compare similar properties for sale online, check whether selling prices are not far off from each other. Or inquire on other properties for sale in the area and compared it by price/sqm.
But a better way perhaps is find someone you really trust (family, relatives or friends) who can do the ocular inspection for you. Nowadays, it’s easier to send videos online, or even a live Skype conversation during the actual site visit perhaps?
3D Realty Handshake by lumaxart, on Flickr
Have them video the whole activity, including videos of the vicinity, neighborhood, their observations, interview with the agent / seller, nearby places where you can get potential boarders (schools, business districts etc), the possible repairs that need to be done, the improvements etc. It’s good that you have the investment mindset and  put your hard-earned money to work as well.
Goodluck and may you have a richer life!

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PS. It’s hard to be an OFW, it’s really a great experience to travel abroad as a tourist/ visitor, but as an employee, experience is very tough. As such, it is imperative that family and relatives here in the country are equipped with an investment mindset, that they are financially literate, so that they are able to properly managed the money sent to them.
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