02May2020 Update: Published Income Updates on PowerFill and Aunicaj.
Been busy the past few months building a new business venture (we’re looking for business partners and distributors by the way) while we also spent some time in the province to unwind and rest (plus to get updates on our cows Liv and Mellie, and harvest updates from a small farm, which we now call Alpha Farm because beta is coming soon)!
Now time for some updates on the co-owned gas stations which we invested in.
Last Sep2018, we wrote about our initial experiences with our small investments in PowerFill and Marz Fuel. Wow it’s been 9 months already since that article? If you missed the first article, it might be a good idea to get a refresher first, to know the similarities and differences between the two, so you have a better context of what below updates are about.
Here is our initial review: PowerFill and Marz Fuel Gas Station Co-ownership: Initial Review. After reading this, dive in for our most recent updates and developments.
PowerFill Updates (Month 21)
I think we were batch 13 to 17 of 2017 and in a nutshell, we waited for almost 2 years for a gas station location to be assigned to us. Here are the highlights:
- Aug2017: Placed an investment. Remember, PowerFill’s approach is to accept investments while at the same time looking for potential locations and working on the necessary permits. lease agreements, etc.
- Sep2017 to Aug2018: Monthly updates were received via email. Batches ahead of us were slowly getting location assignments but since we’re batch 13, we were still waiting. The usual issue is the slow pace in getting permits (from LGU and Barangays).
- Sep2018: The 1% monthly interest for the investment started coming in. This is the agreement in the event that it’s been 12 months and they have yet to assign us to a location ready for construction.
- Oct2018 to Apr2019: The 1% monthly interest earnings were deposited religiously into our accounts while still waiting for our branch location. At this point, we’re already getting impatient and PowerFill is apologetic since (1) they also invested in the branch location (that’s what they said) and it’s in their best interest to have the branches operational soon; and (2) they’re incurring 1% monthly cost per investor due to the delays “beyond their control”
- 04Apr2019: They were looking at 3 potential locations for batch 13 (Valenzuela, Pampanga and Pangasinan). All these are still work-in-progress though in terms of public hearings, LGU resolutions and clearances (and all other headaches in opening a gas station) so even if we get assigned to one, it will still take months to be operational
- New development. They offered to assign us into a gas station that is opening soon (nearing construction completion) but it will be located in Santiago, Isabela. Not sure how, either PowerFill management gave up part of its ownership in this branch, or maybe an investor pulled-out, or any other reason. Bottomline is, there’s an opportunity to get this business started and operational sooner than later.
- We decided to grab this “relocation offer” even if it’s much farther than the potential locations identified earlier that month. We decided to take it instead of risk waiting for more months since the original locations are not yet finalized, and once finalized, construction will take another few months (rainy season coming soon). We figured, if we don’t accept this, branch opening might be during the 2nd anniversary of our investment, or even later! At least in the Isabela branch, it will already be operational by May2019. Plus it’s near wifey’s hometown in Quirino so pwede na rin. We can just visit when we go to Quirino (like we did recently).
- The 1% monthly interest stopped by April (since we now have a soon-to-open branch). All-in-all we got 7% interest while waited for 20 months from our month of investment.
- 06May2019: Finally, the PowerFill Santiago, Isabela branch opened! Unfortunately, we were not able to attend the opening ceremony so we just went there on our own 2 weeks ago. It’s around 3km northbound of Ford Isabela, near Divisoria Elem and High School.
- May2019: Got our Co-ownership certificate via courier (since we were not there during grand opening), plus our VIP investors card (Php 2.00 /liter discount for Gas, Php 1.00 discount for diesel in all PowerFill branches) 🙂
- Jun2019: Now we wait for the business reports and dividend distribution. May this business be fruitful. 🙂
Below are some pictures grabbed from PowerFill Facebook page.
Marz Fuel Updates (Month 9)
As mentioned in our previous article, Marz Fuel has a different approach so from the start, we already have an assigned location which is in Indang Cavite. So we were hoping that they’ll be able to beat the 20-month waiting time we had from PowerFill.
- Sep2018: Placed investment with Marz Fuel through their marketing partner, Aunicaj. Targetted start of construction is Nov 2018.
- We started receiving updates via email. Expected start of construction moved to December since the Indang branch (c/o Aunicaj) partnered with Rapide Auto Services so aside from a gas station, a franchised Rapide auto servicing will soon rise in the same location.
- According to management, investors will not shell-out an additional amount but will be included in the profit-sharing of both gas station and Rapide. So I’m guessing management shouldered the whole franchising expense, and in exchange, they effectively have a bigger share of ownership (hence profits) since invested capital in the gas station + auto servicing is now much bigger. Our profit-share will still be commensurate to the amount we invested, smaller in terms of percentage, but hopefully bigger in terms of actual amount since the location has now two income streams — gas sales and auto servicing.
- Jan2019: Construction was further delayed to Feb2019.
- Mar2019: Started receiving pictures on construction updates.
- Jun2019: Construction still ongoing, target opening is Jul2019.
Below are some pictures from the construction site. Note that Marz Fuel does not have the 1% monthly interest in case of delays past 12 months. But so far, if all things go as planned, the opening should be within 10 months from the time we invested. Hopefully, this will also be a fruitful business for the co-owners.
Why Co-Own? Why Not Build Your Own?
Got the above question via #AskGeri many months ago. Sorry for the very late reply.
Building our own wholly owned business, admittedly, is still a goal for us, a future state. We’re not closing our doors to it. But probably not a gas station, but a wholly-owned retail business in another industry somewheres. In time.
But for now, this is what our capacity allows, in terms of money and time and willingness. Note that initial investment for these gas stations are below half a million, while building one’s own gas station will cost 4 to 5 million pesos, even more. That’s just the structure. And I’m not yet talking about the initial inventory, few months of lease and salary for manpower. All these are cash out before you start earning. So lots of cash buffer needed.
Plus the headaches of securing locations, finalizing lease agreements, convincing LGUs to grant you permits (and some grease money along the way) as we’ve seen in PowerFill and Marz updates. These are the challenges we’d like to avoid for now, we’d rather “outsource” to someone else so to speak, hence we opted to try the co-owned route rather than going solo and do all these for ourselves.
Yes we won’t learn as much unlike if we do it ourselves, but let’s just say the oil industry is not something we’d like to be our core business in the future so learning it is not top priority. So for now we’re focused on our cash cows (our full-time jobs) and just building small businesses and sources of passive income along the way.
That’s just us though. Not all investments are for every Juan, and not every Juan is for all investments option out there.
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