Win-Win Investment in Dairy Cows

Is there money to be made in dairy cows you ask. It's indeed an unusual investment but one that we're happy with knowing that we are not only helping ourselves but helping others who are less fortunate as well.

This lobang came to us in April last year. Mr. Danny Fausto DVF Dairy Farm (Gatas ng Kalabaw) Chairman and Mr. Ding Bagasao ERCOF (Economic Resource Center for Overseas Filipinos) Chairman came to Singapore with the offer, basically:

a) Investor provides funds to buy the cow
b) The cow will be assigned to a Farmer who will provide his farm for the cow's use, take care of the cow (feeding, cleaning, offspring delivery, etc)
c) DVF Dairy Farm will buy the cow's milk and deposit the sale amount to the Investor's account; Also, the DVF Dariy Farm will make its bull stock available for the impregnation of the Investor's cows and extend technical assistance to the Farmer to ensure proper milking hygiene
d) ERCOF will send reports to the Investor as to the status of the Investor's cow(s), the milk sales deposits and liaise with the farmer

As you can see, this is a partnership among 4 entities: the Investor, Farmer, DVF Dairy Farm and ERCOF. And a win-win partnership at that.
- Investor gets a % of the milk sales. No farm or muscle work required.
- Farmer gets a % of the milk sales and shares in the ownership of the cow's offsprings e.g. 1st offspring owned by Investor, 2nd offspring owned by Farmer, 3rd offspring owned by Investor, etc.
- DVF Dairy Farm gets a % of the milk sales in exchange for assistance to the Farmer and getting the milk supply.
- ERCOF gets a % of the milk sales. In exchange, ERCOF will liaise with the farmer and DVF Dairy Farm for the Investor.

As an investor, the projected pay back period for your investment is 2.4 years based on milk sales and the value of your herd.

DVF Dairy Farm itself is another story. Mr. Danny Fausto has our respect and admiration for helping the farmers (through DVF Dairy Farm) and for his advocacy for the Philippine dairy industry. If you want to know more about this entrepreneur whom we have the privilege of partnership with, read his book 'Dare to Dream' (available in the Philippines at National Bookstore outlets) or click on below media publications.

Philippine Daily Inquirer: Milk flows from the rice granary

Sun Star Cebu: Dariy farm seeks hike in traffic on foreign milk

Nueva Ecija Journal: Talavera milkman's tale of success launched

AgriAsia: DVF raises hopes for a viable RP industry

Philippine Star: Carabao milk is a good anti-cancer supplement

Channel News Asia: Poor Philippine farming community milks its way to success

To know more about DVF Dairy Farm mission and vision, products and outlets, please visit their website.

If you are interested in this investment opportunity and want to know more, please don't hesitate. Leave us a comment with your email address or call us at +65 9863 7328. Or email us at pinoylobang@yahoo.com.

Photo above shows one of the 3 cows we now own, the Farmer / Caretaker and ERCOF Chairman Mr. Ding Bagasao.

Am I Allowed to Buy Property in the Philippines?

To be able to buy property in the Philippines, you must be:

a) a Filipino Citizen OR
b) a natural-born Filipino Citizen who lost his/her Filipino citizenship through naturalization in another country OR
c) a Filipino by dual-citizenship OR
d) a foreign national married to a Filipino Citizen
For individuals classified under b, c or d, you may purchase a parcel of land not exceeding one thousand (1,000) square meters in area and for residential purpose only.

For foreign nationals, you can purchase:
a) House and Lot - provided the property is under the name of a company registered in the Philippines
b) Condominium Unit - you may purchase a condominium unit under your name

Choosing a Property

How can you know whether a property is a good deal? You've probably heard that the three most important things to look for in real estate are location, location, location. Actually there are five things you need to analyze according to Robert G. Allen, author of 'Multiple Streams of Income' and the real estate bestseller 'Nothing Down'.
1. Seller motivation
2. Good location
3. Good financing - including down payment and long-term financing
4. Good condition
5. Good price

All of the above five conditions combine to make a good investment. And below is a simple scoring system from his book 'Multiple Streams of Income' that can help you choose a good property.

Property Points System
Each of the above five conditions are given a score from 1 to 3, where 1 is poor and 3 is excellent. If the property scores less than 12, pass and keep looking.

Guidelines:

• Analyze and assign a point value to each of the five factors of a property
• If in doubt about a point value, always pick the lower number
• Add up the numbers
• The lowest acceptable score is 9, the highest possible is 15
• Greater fools always buy property in the 9, 10, 11 range
• Great investors always buy property in the 12, 13, 14, 15 range

1. Sellers motivation and flexibility
Poor (1 point) - Won't budge on price or terms. "Take it or leave it." Doesn't need to sell. Not anxious at all. In the driver's seat.
Average (2 points) - Might consider a small discount in price. Needs cash for new house or property. Needs cash for bills, etc. May carry small second or contract but leery of unusual deals.
Excellent (3 points) - Needs cash for pressing items, i.e. behind in payments, etc. Or, doesn't need cash at all... has tax, management, transfer, time problems, or divorce, retiree, or investor looking for a solution without major need for cash. Flexible in price or terms.

2. Location
Never (0 point) - No pride of ownership. Junk and debris in streets. High crime. No appealing shopping close by. Declining neighborhoods. Abandoned buildings and boarded up properties. Close to major streets, industrial areas, or commercial zones (across the street). Far from employment centers or commuter accessibility.
Average (2 points) - May be clean older neighborhoods. Close to shopping, churches, schools, etc. but not very appealing. Working class tenants, neat, established. May be poor location on the upswing with pioneer fixer-uppers. Nicer inner-city neighborhoods.
Excellent (3 points) - Easy accessibility to all necessary amenities and transportation. Middle class, suburban neighborhoods. Not on busy streets. Cul-de-sacs ideal. Properties nearby very similar in price. Good foliage and landscaping except in brand new subdivisions. Only high-class inner-city locations.

3. Financing
Poor (1 point) - More than 15% down. Seller needs lots of cash and wants all of his equity. Or, property will have heavy negative cash flows for more than two years. Or there will be a large balloon payment due in less than three years from date of purchase.
Consider only if price is excellent.
Average (2 points) - Financing required from an institution with up to 15% down of buyer's money. Credit checks. Institutional, secured loans for part of the down payment (high interest, high monthly payments). Seller carries small amounts. Cash required from buyer. Balloons due in less than 5 years.
Excellent (3 years) - Less than 5% of buyer cash involved. Seller carries most of the financing at lower than market rates with no balloons in less than 7 years. No negative cash flows projected beyond the first year. Contract sales, no credit checks.

4. Price
Poor (1 point) - 10% or more above the reasonable market price.
Consider only if financing is excellent.
Average (2 points) - Within + or - 5% of market price.
Excellent (3 points) - At least 10% or more below market price.

5. Property Condition
Poor (1 point) - Consider only if price is excellent.
Needs major cosmetic and structural improvements. At least 10% of purchase price will need to be spent immediately to make unit rentable. Improvements do not significantly improve the rent roll because of quality of tenants and location. Improvements not to increase value more than 10% above purchase price. Usually associated with poor locations. Possible to find this property in excellent locations where prices are so high that improvements do not increase value but just make units acceptable to renters. Viewed as making a larger down payment (for improvements) and receiving an averaged priced property.
Average (2 points) - This is the true fixer-upper! Cosmetic improvements would be nice but not immediately necessary. Costs not to exceed 5% of the purchase price. Cosmetic improvements immediately affect the value upwards and make the property more desirable, saleable, and attractive. Not much structural work (if any) is necessary... only paint, landscaping, drapes, and other inexpensive improvements. This type of property should not be bought if the buyer does not have the time or mental capacity to undertake supervision of improvements. This property can prove to be the most profitable in the short run. The worst house in the best neighborhood.
Excellent (3 points) - Newer property or older property with recent renovation. No problems, clean inside and out... good landscaping. New components to replace major items. May have been a recent fixer-upper project which is being sold by a don't wanter at an excellent price. No work necessary before renter moves in. Solid property with a hassle factor of zero. Quick closing, quick rent-up, quick cash flow.

Example (Alta Vista de Boracay)
We've tried this out with the Alta Vista investment and the scores are below.
1. Sellers motivation and flexibility - we give it 2 points as there is a need to sell. No interest if paying within 1 year with in-house financing. Other terms available: 2, 3, 4, 5 and 10 years to pay.
2. Location - easily a 3 on location. Good landscaping, not very busy yet all necessary amenities are easily accessible.
3. Financing - we give it 2 points as 10% downpayment is required but the leaseback program can lessen the monthly amortization
4. Price - we give it 2 points as it costs lesser than that of the neighboring development with a comparable unit. It's as much as PhP650,000.00 to PhP772,000.00 lesser than the neighboring property.
5. Property condition - easily a 3 on property condition as it's new and comes fully furnished. No renovation or interior decorating expenses and effort.
Total Score = 12 points. Definitely a good investment.

Property Evaluation Worksheet
After your initial assessment using the Property Points System, you can use Robert's Property Evaluation Worksheet to do a more detailed assessment.
The Property Evaluation Worksheet is available from the Multiple Streams of Income website (Keyword: BargainFinder) or simply click here.

Alta Vista de Boracay

(Visit our Flickr page for more pictures of Alta Vista).

As mentioned in "A new breed of OFWs", we'll be talking about the investment opportunity that we came across in the business networking dinner last week that made us here at PinoyLobang really excited - Alta Vista de Boracay. Boracay is rated as one of the world's Top Ten Beaches by Yahoo.

experienced developer...
Alta Vista is a project by DMCI which has developed prestigious hotels and landmarks such as Shangri-La, The New Istana Palace (Brunei), Asian Hospital, CCP, Rockwell Condo, etc. So you can expect the same quality in this project.

residential vs. condotel unit...
You have the option of buying a Residential Unit or a Condotel Unit. If you plan to stay in Boracay for most of the year, get the Residential Unit and have the freedom to go and stay as you please. However, if you only plan to go there a few times each year, it would be more practical to buy a Condotel Unit which will be maintained and fully serviced by the hotel operator. All units are fully furnished.

leaseback program...
You can also enroll your Condotel Unit under what they call the Leaseback program. Under this program, your unit will be rented out to tourists and a percentage of the income will be paid out to you without any effort on your part. You don't have to book reservations for tourists, service the tourists or clean up the unit. The hotel operator will do these things for you. So you can continue to stay where you're based with your family and continue working and earning. And with the extra income from your Condotel unit, you can supplement your monthly amortization.

your own place in Boracay...
Itching to go to Boracay? You can still enjoy your Condotel unit as you are given 15 days free stay per year. So you can schedule that well deserved 2-week vacation, head to Boracay and just crash at your own place. Yup, no hassle booking a hotel room and waking up to a strange ceiling. Its a place to call your own, your own little slice of paradise. The nearest beach is Puka Shell Beach which is a lot less crowded than White Beach. This is the ideal place for serenity seekers who want to escape the stress of everyday working life much less working in a concrete jungle, to find time to be by yourself and soothe your senses by lying on the beach and watching the sunset or even the sunrise. But when you're ready for more activity, White Beach is only 5 minutes away via the Main Road.

let's talk numbers... projected return on investment...
But how much can you actually get from investing in this property?
Let's take for example you buy the studio type unit named as Panorama (interior is shown in above picture) and enrol it in the Leaseback program.
With a 60% occupancy rate @ PhP5,000.00 per night, it is projected that you can get as much as Php27,000.00 per month.
With 70% occupancy @ the same rate, you can get as much as PhP31,500.00 per month.
Since your monthly amortization remains fixed for the duration of your payment period, you will likely earn more as rental rates appreciate.

What is the likelihood of achieving 60% or 70% occupancy rate?
Boracay is an international tourist destination as such not only is it "selling" during the local summer season (March - April) but other times of the year as well.
Peak season (highest rate): Christmas, New Year, Chinese New Year and Holy Week
Semi-peak season (high rate): November to mid-June
Regular season (rates are 10-50% lower): July to October
There is approximately 500,000 foreign and local tourists in Boracay each year and only 5,000 rooms (from the 224 resorts on the island).
The hotel operator will aggressively promote Alta Vista to local and international markets (Europe, US, Middle East and other Asian countries).

PinoyLobang says:
Over-all, the best selling points for this investment are the location and the leaseback program as you can earn extra income without having to do an extra job i.e. Passive Income. The property is more private but still very much accessible. And this is in Boracay...
For a more comprehensive review, please go to the bottom of the post entitled 'Choosing a Real Estate Investment'.

If you are interested in this investment opportunity and want to know more, please don't hesitate. Leave us a comment with your email address or call us at +65 9863 7328. Or email us at pinoylobang@yahoo.com.

A new breed of OFWs

We attended a business networking dinner organized by Global Pinoy (Association of Filipino Entrepreneurs) Singapore last Monday night, 11 June 2007. It was held at the newly opened Filipino restaurant 7107 Flavours located at Marina Square. It was well attended by Filipino professionals and entrepreneurs based in Singapore and visiting from the Philippines. The keynote speaker was Dept of Trade and Industry representative to Singapore Edgardo Garcia. His talk was informative and positive - the Philippine economy is improving and the future is bright - a much anticipated message for us overseas Filipinos who are hoping for a turnaround in our country's fortunes.

There are a lot of investment areas opening up in the Philippines not only in Metro Manila but also in the different regions brought about by the One Town One Project (OTOP) initiative by the government. There was one or two investment opportunities that really piqued our interest here at PinoyLobang and we will be sharing more on this in another post.

Personally, I believe the networking dinner was long overdue. It's about time we SingaPinoys came together and through this venue, help each other and in the process help our country. Hopefully, this is only the first of many such opportunities to band together to bring about positive change in our lives - at least in the economic aspect, through entrepreneurship. So kudos to Global Pinoy President Fara Blanco as well as to the Global Pinoy members who helped organize this event. Global Pinoy's Vice President Sherwin Enriquez had an interesting remark in his closing speech - that one of Global Pinoy's missions is to transform OFWs into OFEs or OFIs i.e. Overseas Filipino Entrepreneurs and Overseas Filipino Investors. We here at PinoyLobang wish Global Pinoy success in this mission.

7107 Flavours itself is another story. A first in Singapore for a Filipino cuisine fine dining experience. The restaurant's ambience is definitely conducive to business dinners or meetings. I would recommend bringing your Singaporean colleagues or business clients curious about Filipino food is to this place. Adding to the Filipino ambience are the exotic, handmade vases from OurTribe - a Filipino company selling beautiful home and fashion accessories made of indigenous materials.

Global Pinoy and 7107 Flavours coming together for the Business Networking Dinner is a good example of what SingaPinoys can do together. Here's to more collaborations in the future for all the OFEs and OFIs here in Singapore.