I’ve been lagging in my uploads and postings here at PHStocks because of this fiasco, or dilemma, if you will.
Basically here’s the gist of this true story: a sweet-talking agent coaxed a foreigner into acquiring a property in the Philippines, saying that he could own it as long as it is not landed. When the deal was done, the agent disappeared, and the foreigner was left groping in the dark as to what to do next.
So why was I affected? Because the foreigner was my previous boss, and that I was the one to pick up from where that greedy bastard of an agent left to help him sort out everything.
BUT HERE’S A DISCLAIMER: I am writing this not because I am discouraging you guys from acquiring properties in the Philippines. Heck, I have stock positions in listed property companies in our country. But this is just plain discouraging. And I am writing this to save you from the inconvenience and sleepless nights just in case you acquired a property without further knowledge in the process.
So here’s the thing. My former boss, a British national, owns a press release distribution firm. He travels around a lot, of course, to get clients. That time, he’s in one of the investment conferences in the Philippines. That’s the same time that the PSE index is having the time of its life, buoyed by hot money inflows due to the US Fed’s QE policy.
So you can just imagine the bullish mood in that event. Well, I have to admit that that was also the time that the country is being noticed again by the global investment community, what with the government initiatives and efforts to root out corruption.
Anyway, so my ex-boss was there, mood is freaking festive, and everyone feels like a hundred grand. An agent–let’s call him Agent 124–was there as well because their firm was somehow connected with the organizer of the particular event, or their firm was among the sponsors. And of course, that’s an opportunity to widen one’s network for future opportunities.
Well, Agent 124 and my boss sort of “hit it off” and spent the night merry making. All the while, Agent 124 is selling a unit in his portfolio of units to sell. According to my boss, Agent 124 told him that he could own a property in the Philippines, as long as it is not landed–so an option is in a condominium or an office space in a building. That’s also the same time he’s making his pitch.
Hint: the unit belongs to one new, very high-end (at least that’s what the ads say) condominium in the country’s CBD, which was once embroiled in a spat against another building or condo regarding who should be tagged “the tallest building” in the country, or that CBD area.
OK, back to the story. So, my ex-boss, who is also considering setting up a branch of his business in the PH, and seeing some sort of future in the country, decided to take Agent 124 up on his offer. His plan is to get that property, and somehow turn it into a home-office of some sort.
So the deal was signed, and after a few days, he paid the reservation fee for the unit, and after a further few days, he started paying the 12-months-to-pay-20%-downpayment to the unit.
Midway through that 12-month period, Agent 124 slowly disappeared; with calls no longer returned and emails ignored.
Nearing the end of that downpayment (DP) period, my ex-boss realized that he just opened a can of worms.
For one, he took the loan BELIEVING–as per Agent 124 assured him–that he could take a housing loan from any bank in the country. At the end of the DP period, he is scrambling to process everything–documentations for applications here and there–to be able to continue the proper payment of the unit. Well, he really can continue paying the unit–BUT THAT will be payment straight to the developer/owner of that “tall” condo. And the freaking interest rate of said monthly payments are as high as their building.
The fact is, ex-boss thought at the time that he could have gotten the housing loan from a bank in the country by the time the DP ended, and would have started paying the lower-rate monthly amortization to the bank, instead of the developer. He was so damned wrong.
Painful Truths, and Even Painful Processes
Then came PHStocks to the rescue (PHStocks and I are one and the same – just for the heck of it). He asked me first if I could be a co-maker in the loan. The plan is for me to open a joint bank account with him, and apply for the housing loan with him. Along those lines.
To no avail. I approached several banks, most of them we can see listed in the PSE, and their answers just echoed each other. “That is not possible”.
Here’s the thing. I am addressing the foreigners, alright? They can definitely buy a property in the country, provided they got the freaking cash or capability to pay the unit in one go–that is, they don’t need to apply for a housing loan from a local bank. Agent 124, thinking of only the commission he’d be getting, didn’t not explain fully to my ex-boss that he either need to have an SIRV or SRRV to be able to qualify for housing loan application. Or, he should have been “loaded” enough to pay the in-house financing (which carries a humongous, unreasonable interest rate, with a maximum period of only three years). That, or he should have married a Pinay after taking out the loan, so that the name on the house will be hers.
Fact of the matter is, my ex-boss doesn’t have any of the above. Of course he’s got money, but that’s his business’ money. And he doesn’t want to touch that.
Which is why I have to go through the really, really painful and inconvenient process of setting up his business’ branch in the PH, so that he could have gotten the SIRV–> which in turn, is just one part of the equation to being qualified for a loan. He needs to have a co-borrower.
But let me tell you about the setting up of business first. Hot damn. I agree 5,000% with whoever said that the Philippines is one of those countries with a very difficult process to set up a business in.
Even though the World Bank said that the ease of doing business in the country has improved by 25 notches in 2013, the rank still sucks: 133. And actually, that is “DOING BUSINESS”. What I experienced was “STARTING A BUSINESS”–the applications and permits and everything else in between. According to World Bank, the PH ranked 166 in 2013 when it comes to starting a business, and ranked 170 in 2014. I totally agree.
It. Is. Just. Difficult.
ANYWAY, so that’s the reason why my posts are lagging. I’ve been experiencing said difficulties in setting up my ex-boss’ business in the PH, so that he’d be able to get his SIRV, so that he could be considered–with me being a co-borrower–for that freaking housing loan for that unit in that tallest building in the CBD. But the funny thing is, his SIRV is still not approved because he doesn’t have a business address in the PH (the unit is residential)–and that business address is needed to be able to get a business permit for his business. It’s like we’re stuck in a freaking paradox.
And I’d like to highlight the word “CONSIDERED”. The loan has not been approved yet. It is still on process, and I’m still following up and waiting for news from the banks on whether or not the loan has been approved or not. But of course, we were able to make progress.
So there you go, my dear citizens of the world. If you’re not a Pinoy, or not married into a Pinoy/Pinay, or doesn’t have an absurd amount of cash to pay out the property in an instant, or doesn’t have a running business in the PH, or any other issues that your subconscious will throw at your logic whenever you encounter these sweet-talking-good-for-nothing property agents selling units in the PH, think again. For one, they are just cajoling you to get their commission. And then think about what my ex-boss experienced above. And then think hard for yourself. Again. And again. And then repeat the thinking eight more times for good measure.
And then finally, contact me for consultation if you’re still not convinced. After all these months of hardship in this matter, I could say what U2’s Bono is saying in one of his songs: “There’s nothing you can throw at me, that I haven’t already heard.”
Comments? Violent reactions? Contact me: richard[at]phstocks[dot]com