Jump to content

All Activity

This stream auto-updates     

  1. Today
  2. How do banks appraise property prices? Certainly banks will look at developer prices. But unless the developer will buyback (through a Put option) the developer's price for a new property is not really relevant. What matters to the bank is HOW MUCH CAN THEY SELL the property for, if the loan goes into default. The price is likely to be far below the price of a brand-new property; partly because if may be in less than pristine condition. And also because the bank will not have access to the powerful marketing machines of the developer. Typically, a bank will look at : + Comparable prices of similar properties sold in the secondary market. They bank may have these figures from other foreclosure sales of similar properties. And they may have recently financed similar properties and seen the prices at which they were purchased + The cash flow potential of the property. Obviously, the higher the rent, the more the property is worth - assuming the rent is at market rates, and the property will maintain its condition and rent-ability. A one-off above market rental which is not repeatable is unlikely boost the value of a property. A good argument can be made, that you only need to know THREE MAIN numbers to value a property: + RENT, at fair market level, and the + COSTS, like association fees and property taxes to be borne by the owner + INTEREST RATES, for someone who might buy the property With this information, you can calculate a Valuation, where the property will cover the Interest costs on a notional 100% Let me give an example. (This could be a Studio unit at an Avida property) Suppose you know a (newish) property can be Rented at P24,000, with Costs of P2,000 for monthly association dues + P8,000 of annual property taxes, and prevailing Interest Rates are 7.0%. The first thing to ask is what Maximum size Loan* could be made, where this property would support all the interest costs. Here is how to calculate this: Annual Net Income = Annual Rent ( 24k x 12= 288k ) - Costs ( 2k x 12= 24k + 8k = 32k) = 288k - 32k = 256 k per annum 100% Loan Size = Net Income (256k pa) / Interest rate ( 0.070) = 256/ 0.070 = P 3,657 k That value, of P 3.66 Million might be a starting point in valuing the property If a buyer were confident that rents were headed higher, or interest rates would fall, then he.she might pay more ===== *Why a Maximum Size Loan, which assumes 100% of the property is financed with a loan? In real life, this is unlikely, since most banks would be reluctant to go beyond a 60-70% Loan. Here's why: many sophisticated investors will be willing to Buy a property if it has a positive cash flow, but may be reluctant to buy, if the property has a negative cash flow. If a property's Net Rent can cover a 100% Loan, then any Equity that is invested will help to insure that the property will pay itself off
  3. "The MATHematics of property prices" I have wanted to tackle this subject for sometime, and this section on Philippines property is the right place to do it. There is so much nonsense spoken about property prices, that maybe someone needs to explain in detail the mathematics of property price evaluations. In PH there seems to be a common misconception that Property Developers set property prices. Well, this is partly true, since developers do set the prices for the New properties that they build and sell. The problem is: the prices on new properties are only relevant for the developers. Individual owners can rarely achieve the same price, It is common for a person who owns a new or almost new property to find that he needs to offer a 25-30% discount to “developer prices” to find a buyer. And sometimes, in a rush sale to a cash buyer, the price achieved might be an even bigger discount than this. Why do developers get higher prices? I believe that there are three main reasons: + Developers have their own “marketing machines”: All the major developers have big & well-oiled marketing machines, that find buyers using tactics like passing out brochures at shopping malls, and hiring marketing staff with firm sales quotas, and sending them on foreign trips. These teams are good at finding new buyers who may not be fully aware of other purchase opportunities beyond what the developers are offering. They also seek out Filipinos overseas, and prospective foreign buyers who may see no other opportunities, other than those offered in the brochures. + Credibility, & buyer ignorance: The marketing teams can help to find buyers who may be totally unaware of the relative bargains available in the secondary market. And unlike more mature markets like HK and SG, it is not easy to discover what are the actual transaction prices available in the secondary market. There are very few agents operating out of estate agencies on the street near large new condos, And Partly to avoid too many questions from Tax authorities, sellers may be reluctant to report actual selling prices. And there is nothing like a MLS (Multiple Listing Service) to give buyers a clear picture of what is available from those who want to resell their properties + Developer financing Many Filipinos lack sufficient capital to buy for cash, and may find it tough to get bank loans for purchasing property. And when they do get loans for secondary market purchases, loans provided can be lower rate of advance, and at higher interest rates. Thus, the only way that many can buy is on an instalment basis. Developers have geared their property sales that way. Once you talk to a seller you might meet at a mall, they will very quickly start talking to you about how much the monthly instalment is for pre-sale property. If you are a cash buyer seeking the lowest possible price, you may find the discounts for cash buyers are small, way less than you would expect based on prevailing interest rates. This seems to be designed to force buyers into supporting the fiction that developers high prices, are the real market price. Will banks provide bigger loans for new properties? Here is a little-known secret that I recently uncovered: Many developers will provide a PUT option to the banks when they finance a new property. If the loan is in default, the bank may agree to buyback or resell the property at a price which will allow the bank to escape without a loss. (I do not yet know, if this is only offered to tie-in banks: ie SM for BDO, Ayala for BPI, etc.). Anyway this practice explains why a bank may be willing to provide a larger loan for a new property, than they would for exactly the same property purchased through the secondary market. How do banks appraise property prices? (Discussed in the Next Section)
  4. Strange type of blue color for Air Residences, and the parts colored in blue seems different compared to the photos on brochure ?
  5. Good news coming? ... REIT rules to be released by July THE Securities and Exchange Commission (SEC) said it can release guidelines on the issuance of real estate investment trusts (REITs) as early as July, without changing the minimum public ownership (MPO) requirement. The commission is set to conduct another round of public discussions this month to finalize the qualification requirements of a REIT fund manager, which is one of three provisions that has dissuaded property players from issuing such a product. “Kung wala masyadong tanong on the rules… by July finalize na (If there are not many questions on the rules… by July, we can finalize it),” SEC Commissioner Ephyro Luis Amatong told BusinessWorld on the sidelines of the 3rd Asia Pacific REIT Investment Summit in Parañaque on Tuesday. Mr. Amatong said there is a pending issue regarding how much interest a fund manager can have in a REIT. The fund manager is tasked to implement the investment strategies of the REIT, oversee and coordinate its property acquisition, leasing, and operational and financial reporting, among others. Rule 6 of the Implementing Rules and Regulations of Republic Act No. 9856 or the REIT law states that a fund manager must be independent of the REIT, its promoters, or sponsors. “Nakalagay sa batas ay independent, but I think what it really meant was external, na yung fund manager ay hiwalay from the REIT…so pwede naman palang may ownership stake yung REIT or yung sponsor in the property (Under the law, it says the fund manager should be independent, but I think it meant that it should be separate from the REIT… So it can have an ownership stake, the REIT or the sponsor in the property),” Mr. Amatong explained. However, the rules that are being readied by July will still include the 40-67% MPO for REIT vehicles, against the 33% requirement that property players have said is the ideal public ownership level. Mr. Amatong said the SEC decided to iron out the rule on REIT fund managers first since it was a concern for all industry players, whereas some companies are already comfortable with the existing MPO requirement. “Ang lumalabas, may mga willing to comply with the MPO. Pero the issue of the property manager, issue siya for all. So inuna namin kasi applicable to all, lahat gusto may stake sila in the property manager or the fund manager (It turns out, there are some who are willing to comply with the MPO. But the issue on the property manager, it’s an issue for all. So we prioritized that, everyone wants to have a stake in the property manager or fund manager),” he said. With the amendment for the rule on REIT fund managers, Mr. Amatong is optimistic that the country will see the first REIT issuance this year. Ayala Land, Inc. (ALI) said last April that it is preparing a REIT offering where it could raise about P25-26 billion within the year. This comes a decade after the REIT law was enacted in 2009. Mr. Amatong also said that “about one or two” companies have already expressed interest that in conducting a REIT offering with the current MPO requirement. Aside from issues on the REIT fund manager and high MPO requirement, property players were previously concerned with the 12% tax on the transfer of real properties once they place their assets in a REIT. This rule however has been removed following the passage of the Tax Reform for Acceleration and Inclusion Act last year. https://www.bworldonline.com/reit-rules-to-be-released-by-july/
  6. MUX chart ... update: Last $1.69 +4.97%
  7. Yesterday
  8. Interesting. We've reached 1.69 and gold just broke 1360 for the first time since April 2018. I only sold off 35% of my stack during this rise so bring it on!
  9. OILIES Bottoming Together Again? BPT, USO, OIH .... update : 10d : $16.04 -0.25%, $11.25 +4.07%, $13.80 +2.22% : 10d : $16.04 -0.25%, $11.25 +4.07%, $13.80 +2.22% ==
  10. OILIES Bottoming Together Again? BPT, USO, OIH .... update : 10d : $16.04 -0.25%, $11.25 +4.07%, $13.80 +2.22% : 10d : $16.04 -0.25%, $11.25 +4.07%, $13.80 +2.22% ==
  11. TOP REASONS TO LIVE AT THE RISE 1. Rise has well designed units, mostly 28 sqm 1BR with 18 elevators, 50% more than Air Residences next door 2. Great location near top companies and jobs on Ayala Avenue 3. Rise itself will be amenity-rich , like Shangrila’s hotels and residences 4. Rise is above a very nice mall, with great dining & shopping. Also near the malls of Air and Ayala North Exchange 5. Area nearby is gentrifying fast, bringing new jobs, new restaurant choices and other attractions (see below) 6. Transport options on Ayala Ave, and Gil Puyat. Plans underway to add subways stop at/near Fire Station * Yuchenko museum, 3 minutes away in RCBC Tower * Easy walk to Ayala Ave, and to Greenbelt mall, mostly on a covered walkway, protected from rain * Circuit is also walking distance and will provide performance & entertainment options * A new Mapua business school is being constructed halfway to Circuit
  12. SOXX Bellwether & IWM, SPY IWM- etc ... SPY : 3mIwm+ go FL 10d F LT: sw : VIX : VIX-etc : ==
  13. xx / SPY : 3mIwm+ go FL 10d F LT: sw : xx
  14. ESV bouncing (to resistance) - Almost $1 off the Lows ESV-etc ... 10d: $7.37 +$0.46, +6.66% vs. OIH-$13.80, +2.22%, USO-$11.25, +4.07% Bought : ESV-Jan.$5c at $2.46. closed at $2.80-3.10= $2.95 mid, +19.9%
  15. Last week
  16. drbubb

    Impeach Trump? Or Jail Hillary?

    President Trump Mocks Pathetic Democrat Impeachment Protests: ‘Almost Nobody Showed Up’ “This is a huge distraction and will only help Donald Trump get elected.” Steve Watson | Infowars.com - June 17, 2019 Comment President Trump mocked Democrats Sunday over poor turnouts to protests that were organised by the left wing radical group MoveOn.org under the banner of ‘#ImpeachTrump: Act to Defend Democracy’. “Yesterday was the Radical Left Democrats big Impeachment day,’ Trump tweeted, adding ‘They worked so hard to make it something really big and special but had one problem – almost nobody showed up.” “Democrat voters want to hear the politicians talking about issues. This is a huge distraction and will only help Donald Trump get elected.” The President added. MoveOn claimed that there were over 140 protests across the country. However, the only gatherings of any note occurred in the liberal strongholds of New York City and California. Footage of the events confirmed turnout was lack luster, with numbers in the low hundreds:
  17. Clinton Email Classified Material Violations Confirmed – State Department ‘Has Assessed Culpability to 15 Individuals’ in ‘Multiple’ Security Violations BREAKING: Clinton Email Classified Material Violations Confirmed – State Department “Has Assessed Culpability to 15 Individuals” by Cristina Laila June 17, 2019 The State Department in a letter to the Chairman of the very powerful Finance Committee, Senator Grassley (R-IA) confirmed Hillary Clinton’s classified material violations. The State Department stated that it has assessed culpability to 15 (unnamed) individuals, some of whom were culpable in MULTIPLE security incidents related to Hillary Clinton’s use of a private server and her mishandling of classified information. “Consistent with longstanding policy, the Department does not release the names of current or former employees participating in the security incident program. However, in the spirit of cooperation, the Department can share with you certain information about the status of the ongoing review. To this point, the Department has assessed culpability to 15 individuals, some of whom were culpable in multiple security incidents. DS has issued 23 violations and 7 infractions incidents under 12 FAM 550. This number will likely change as the review progresses,” Assistant Secretary of Bureau of Legislative Affairs Mary Elizabeth Taylor wrote. Individuals still employed by the State Department will be referred to the Bureau of Human Resources and some may receive disciplinary action…that’s it? “Consistent with the referral policy, for individuals who were still employed with the Department at the time of adjudication, the Department referred all valid security violations or multiple infractions to the Bureau of Human Resources. In reviewing any violation of agency policy including policies regarding the appropriate handling of classified or sensitive information, the Department may consider a broad range of disciplinary or other administrative actions. These may include, depending upon the circumstances, counseling, reprimand, suspension, and/or separation. For example, the Department’s discipline policies for employees are laid out in the Foreign Affairs Manual, 3 FAM 4100, 4300 and 4500, and apply to violations of statutes, regulations, or Department policy as stated in the Foreign Affairs Manual or Handbook, Department Notices or ALDA Cs, or bureau or post policy documents,” Mary Elizabeth Taylor added. The State Department said it “considers any violation of security policies to be a serious matter.” Right, which is why Hillary Clinton was able to use a private server while she was the head of the Department of State where she hid her Clinton Foundation pay-to-play and transmitted classified material — and she’s still not in prison. === First, Look her up! Then, Stretch her neck!
  18. TRUMP VOWS TO DEPORT 'MILLIONS' STARTING NEXT WEEK! ICE BLITZ x
  19. NEWS flow of MUX is improving at last
  20. Haha - is that faint praise for MUX? It seems destined to range between 1.5 and 1.7 for now, unless gold breaks 1370, which would be a major event. Also perhaps the selling was overdone previously vs gdxj.
  21. a backwards stock call it crap, and it may do well : up today 3%+ when gdxj is flat say something good, and it may do poorly
  22. (there may be a better thread but pretty relevent here too) The unsealing of an application for a search warrant by the federal government on 8chan’s servers has unintentionally revealed that a federal agent has been trolling the site and attempting to redirect the users’ conspiracy theories against the Russian government instead of the CIA or Mossad. ... As it turns out, this text is to let the user know that they are looking at their own posts! This means that Special Agent Rod inadvertently exposed himself as 8chan user ID “8f4812” by including these screenshots as his supporting exhibit. As it turns out, a more complete version of this thread was saved on archive.isbefore it was deleted. By using Ctrl+F on the page and inputting “8f4812”, you can look at all the posts made by the FBI in this thread. The longest reply can be found here:
  23. SOI-etc .... update : SOI-only 12mo : International Prospect Ventures: Golden Valley holds an approximate 16.5-per-cent interest (4,470,910 shares) in International Prospect Ventures... > https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aGZZ-2767000&symbol=GZZ&region=C
  24. Crappy stock really. I added some at 1.3 but not hoping for much, unless gold really gets going.
  25. GOLDEN VALLEY MINES CORPORATE AND EXPLORATION UPDATE Golden Valley Mines Ltd. has provided an update of the company's activities at its joint ventures and related entities, including Abitibi Royalties Inc., International Prospect Ventures Ltd. and Val-d'Or Mining Corp. 1. Related entities Abitibi Royalties: Golden Valley holds an approximate 44.9-per-cent interest (5,605,246 shares) in Abitibi Royalties. Q1 2019 cash flow During Q1 2019, Abitibi Royalties generated total cash flow of approximately $1-million, with approximately $388,000 coming from the company's 3-per-cent net smelter return (NSR) at the Canadian Malartic mine. Royalties from the Canadian Malartic mine commenced at the end of Q4 2018. Canadian Malartic is the largest gold mine in Canada and is operated by Agnico Eagle Mines Ltd. and Yamana Gold Inc. The remainder of Abitibi Royalties' cash flow during the quarter came from options premiums ($505,000), dividends ($92,000), realized capital gain from a non-core equity investment ($13,000) (no shares in Agnico Eagle or Yamana were sold in Q1 2019) and interest ($3,000). Please see Abitibi Royalties' news release dated March 14, 2019, for the company's 2019 to 2021 royalty production schedule and Abitibi Royalties' news release dated April 16, 2019, for further information. Canadian Malartic exploration Exploration programs are continuing to evaluate several deposits to the east of the Canadian Malartic open pit where Abitibi Royalties holds a 3-per-cent NSR. This includes portions of Odyssey, East Malartic, Sladen and Sheehan. During Q1 2019, exploration at the Odyssey deposit focused on defining several internal zones and expanding the deposit toward the Rand Malartic property boundary to the east. Odyssey and East Malartic potential production (2021 to 2023) Odyssey and East Malartic are being studied for potential underground mining from surface to a depth of 600 metres, starting between 2021 to 2023 and then potentially deeper beyond 2023. Preliminary studies show the potential for production increases of approximately 150,000 gold equivalent ounces per year at the Canadian Malartic mine, with ore fed to the existing Malartic mill, displacing a portion of the lower-grade open-pit ores. Further evaluation through additional drilling from underground access points, resource delineation and engineering would be required to advance Odyssey and East Malartic toward a development decision. The study is expected to be completed in late 2019 or early 2020 and, if approved, development starting thereafter. The permit allowing for the development of an underground ramp at the Odyssey project was received by Canadian Malartic in December, 2018. For further information, including technical information, regarding Abitibi Royalties' interests at the Canadian Malartic mine, please see its press release dated May 6, 2019. International Prospect Ventures: Golden Valley holds an approximate 16.5-per-cent interest (4,470,910 shares) in International Prospect Ventures... > https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aGZZ-2767000&symbol=GZZ&region=C
  26. Yeah. I sold a small part of my position at $2.00+, and held the rest thru the dip. Not back in profit yet MUX: $1.53 - $0.03, on 3.2Million shares,
  1. Load more activity
×