New trends in real estate project financing; new opportunities for contractors and financiers

New ideas create better quality of life and wealth

Rizal Philippines
June 9, 2017

I just had a trip to a Region I municipality.  It is a first class municipality with 130,000 population making it eligible for a real estate project.  The deal was if I say the site is suitable for the real estate project, the financier will buy the land, we enter in a joint venture.   All I had to do was say it is great for the project:   it will sell, and deliver cash flow and ROI to the lot buyer.  However, since location is the prime consideration for that type of project, (the two sites are 7 km from the town proper) I said no.   However, they pointed to me an alternative Plan C site which is flat, (does not need much development cost) and much nearer (only 3 km to the town proper)

Later during the day I met a politician contractor.  I thanked him for us working together for the last 10 years.  He supplied us with heavy equipment and transit mixed concrete (We currently have a million peso supply agreement)  And I gave him two suggestions:   to be co developer (ie that he will do the construction) and have a share of cash flow as developer say 10 to 20% of the amount for sharing.   (say 50 -50% jv, they will get 10 to 20% of our 50% in effect from 80 - 20% to 70 - 30%)

We typically talk of the usual equity by the developer and bank loans.  It need not be the case.  Some people with money look for better returns by being the land owner, and co developer.   The co developer, typically a contractor, may forego payment but be reassured of a recurring cash flow or income

I even encouraged him to go into a real estate project in his town for the same project since he can not be a local LGU exec forever.  He needs recurring income (say monthly cash flow) as what his friend of similar position did in our project.   His family (he is now deceased, a victim of political violence) gets nearly a million pesos cash flow a month That is a lot for a legitimate project where their only investment is the land

It may mean less income for the sponsor (us for instance) but we can shorten the gestation period of the project, lessen the work, equity on our part, (even less manpower for construction) we can sell faster early on and concentrate on our core competency:  the selling and marketing part. And beautifying the project (the product) presentation (COBS)

Who says that homes for the aged will not prosper in the Philippines?

New ideas create better quality of life and wealth

Rizal Philippines
May 28 2017

Mabuhai Nursing Homes





Anawim caring for the elderly

A lot of Filipinos expats in the US are making good in the "homes" (for the aged) business.   Some doctors I know sold their house and migrated to the US to be in the homes business. A relative of my wife petitioned their MDs and DMD daughters to run their homes in the US (he has at least two).   We only thought that in Japan where there is an aging population is the nearest place where homes would prosper.

Filipinos are supposed to be family parents oriented.  But it looks to be fast disappearing because of Western influence and the busy lifestyle that is fast being the adopted by modern Filipinos

Some friends went to a home for the aged in nearby town to cheer up the residents and donate equipment (a washing machine)    It is privately run and established by a CI who was not able to take care of her parents in their hour of need (where they need care)

It is a business where the residents pay a certain amount but a good number of them, who used to be well off and professionals are not paying and neglected by their families.   (Those who all ready bequeathed their wealth to their children) and/or whose children are abroad, are professionals and who have no time for their parents anymore.

That will be direction of the care of the aged in the Phil. and may be new opportunities for care givers.  NO need to go abroad.  And may be the SSS benefits would be enough for home care.   Home for the aged.  Also the NGO would have to pay attention to this.  I need to put up one for this purpose

Innovative ideas by Pinoy Chefs/entrepreneurs

New ideas create better quality of life and wealth

Rizal Philippines
May 20, 2017

To really produce new products and encourage entrep students practice tinkering and experimenting with new ideas, the easiest route/medium is food.  That is why I had sort of iron chef competition in the class where they have their own menu and make their pitches (they have to do a sales talk to entice buyers/customers)

Food is also the greatest family expenditure consuming more than 50% of the GDP.  This runs into trillion.

It is no wonder that the food industry has its biggest share of winners (and losers.)  Innovation here is short lived, sometimes with the same life span of a vegetable in the refrigerator.  Food taste rapidly and some restaurants, change their menu and format every quarter.  Otherwise, you will not survive.
Customer needs change rapidly

Some notable foodstuff innovation that I saw:

1.   Brewed coffee in a tea bag.  An entrepreneur experienced that brewing coffee takes time .  So why not do it the teabag way.  All you have to do is boil water and put the tea bag in.
Brewed coffee in a tea bag

2.   The boodle fight restaurant in Navotas.   Price ranges from P499 for four and up to P799 for eight people.   There are lot of customers   Pias boodle fight resto in Navotas