One of the main financial concerns I have been facing lately is the need to learn to invest and grow my money. To solve that problem, I’ve tried investing through stocks, RTBs, and also started exploring internet marketing. While all three have been a great learning experience so far, one investment vehicle I’ve never had the chance to explore is investing through Real-Estate.
That changed about 2 weeks ago.
My Very First Real Estate Investment Thru Private Lending
As I was browsing through the popular real-estate investing site foreclosurephilippines.com by Jay Castillo, I came across an article about the Trace Trajano’s Apprentice Challenge. In that article, Jay and his partners in RYP Realty Team shared some of their experiences in the Apprentice Challenge as well as their need for investor partners to help them out in one of the challenges. I signed-up right that instant and I’m glad I did since it’s been an exciting experience ever since.
A few days after I filled up the investor’s form, I received a message from Ebb Magtuba, the CEO of RYP Realty Team, one of Jay’s partners in the Trace Trajano’s Apprentice Challenge. I met up with Ebb over a cup of coffee, and he shared his story on how he got involved on real-estate. I also learned that RYP Realty team was the leading contender in the Apprentice Challenge. To someone who has limited experience when it comes to real-estate, I felt a whole new world was opening before my eyes.
The following week, my wife and I met up with Ebb again. This time, Ebb was with Eden Alemania-Dayrit, the very successful real-estate investor who was the one structuring the whole deal. Both Ebb and Eden went with us to checkout the property that we would be investing in.
As investor, the opportunity was to get into a private lending deal that could potentially earn us a little bit of “passive” money, without us having to do any of the hard work of doing renovations, processing legal papers, as well as marketing and selling the property.
The 3 Questions You Should Ask Before You Lend Your Money
Before investing our money though, there were 3 things we were concerned about. First, how soon can we get the money we lent back? Second, what is the worst case scenario? Lastly, what’s the track record of the other party we’re dealing with?
For the first question, Eden confirmed that we can expect to receive our money back plus interests in not more than 4 months, regardless if the property is sold or not. After we get our money back, Eden’s plan is to use her earnings from her other successful real-estate deals to continue to market the property. At that point, we would now be risk-free since we already made our money.
For the second question, the absolute worst case scenario would be us ending up with the property. When you think about it, it would not be that bad at all since we would have gotten a great property at below market price. Since we were able to visit the actual property, we already know its exact condition, how much renovation it probably needs, and how conducive the neighborhood is for home owners.
While going around the area, we also managed to find out how much other similar houses were being sold for. So at least, we got some idea whether the price of the house we were investing in was within reasonable range. Add it to the fact that Eden was also able to sell a similar property in the same neighborhood for a higher price. So in the point of view of the end-buyer/home owner, it would come out as a great deal.
For the last question, it was interesting that even at a young age, Eden has already done more than a dozen similar deals, some even in the same area where the property we were investing in was located. She’s definitely not a beginner. Even with her success, she still manages to stay humble and seek out the support of other successful real-estate investors like Trace Trajano and Larry Gamboa who continue to mentor and help her out in case an unexpected scenario happens.
Out of curiosity, I also asked her what was the worst thing she experienced so far as a real-estate investor and she willingly shared a problem about a tenant who encountered financial difficulty and was not able to pay up on time. The good news was that even with that problem, she was still able to get her money back.
Ready, Fire, Aim
In the end, even though there’s a certain amount of risk involved, the answers to these 3 questions and the legal papers that support the “worst case” scenario as well as the integrity of the people we’re dealing with was more than enough to calm my nerves. But as with anything related to money, only time will tell whether it is really a good deal or not.
At this point in my life, however, I would like to believe this is a very good opportunity to learn the world of real-estate investing first hand. It matters not whether my decision will result into success or failure. What matters more to me is the realization that I can be courageous enough to take action in spite of my fears and be willing to fail and learn to gain actual real-estate investing experience.
In all honesty, the whole experience made me anxious and excited at the same time. With the experience, I have more reason to continue learning about real-estate investing so that I can manage the risks better in my next deals.
As always, whatever I learn from the whole real-estate investing experience, I will gladly share them to you through this blog.
How about you? How’s your experience investing in real-estate so far?
P.S. Do you want (or know anyone who wants) to make 10-15% return on their money per year with little or no risk? Fill-up the investor form to find out more about this opportunity.