A new real estate business concept/model? Real estate with agri business package (a blue ocean concept?)

Looking forward to the future of business

We are real estate developer.  Thats our day job.  We have developed residential subdivisions and memorial parks.

Last month, parcels of land were presented to us and we visited the sites:   a 7 hectare  forested parcel of land in  neigboring province, and another 33 hectares also in the same province.

The following were the initial findings:

1.   7 hectare.   Its overlooking the lake with hudnreds of fruit bearing trees, about 5 kms from a famous church, and from the falls rapids.   Its in the middle of nowhere.   Possibilities:    hospitality business,  farm lots

2.  33 hectares    about 5 km from a famous church, near the lake, near a recently constructed filtration plant of water company,   Also in the middle of nowhtere:   far from the market.  The owners are dead and subject to EJ.   The other developers who were ahead all ready made option moneywhich they forfeeited (having failed in whatever they wanted to do).   There is a sort of initial resort development in the area.  Possibilities:   quarrying  or socialized housing.   However these are long shots because there is no infra project that is happening near the site so there will be quarrying operator takers and for socialized housing, we stil have to look around.

Another possibility:    farm lots (and there are plenty) priced at P2k to P3K.  But there are plenty and many have been burned by the sirens songs of being a farmer in remote mountains or dale.  What can be unique, main value proposition.?

Environmental/opportunity scanning.   As fate would have it this post saw vids on preceious woold businesses:    unqiue flowers, tree farming and a fragrance source tree farming.    A video said that a tree could yield 1 kg (3 to 5 max) that can sell for P50,000 kg per kg.   And at 4m x 4 meters distancing, we could plant 800 such trees and that means a hectare can gross P40,000,000 in five years when we are ready yielding resins for the tree.  

Then there is this company  led by a former doctor, a surgeon, who will looking for plantation partners and they will take charge of the value chain:     seedlings, farm technology, inoculation and marketing for a 40% share of the revenues    Not bad    Thats still a 24M in five years.   And for a hectare and you sell 1,000 sm each, thats still P2.4 million ROI per 1,000 sm.  Now if we sell 1,000 sm for say P2,500/sm, the buyer earns about 95% roi, quite a main value proposition.   Thats a lot of ROI considering that he may buy on installment

New business concept:    farm lots cum attraction cum business 

             Target market:    investors, tourists, real estate buyers

              Product concept:    Farm lots (like Farm plate in Daraga.

              Features:

              1.  Commercial:   food, coffee shops, pasalubong, even beer house

              2.  Key tenants:   a farm resort with spa, swimming pool, staycation hotel and resto

 

              3.  Attraction:     colorful trees and flower farm, with fees for say _______P50.00 per person

                

              4.  Main businesses:    tree farms:   timber and fragrance trees

                  with tie up with the good dr.   

             Distribution, land use:

              Roads:                20%

              OS attraction:    10%  (flower farm, like cherry blossom, madre de cacao) or even a mini zoo

              Commercial :      5%

              65% x 33 ha =  21.45 hectares.    x 3 k = 643  x 40% to landowners  = 257,00,000 =  778/sm return   

             This can be applicable to:   the 7 hectare in same province, a 3 hectare in this province that is overlooking.    

             For my uncle who has hundreds of hectares in a Region 3 province overtaken by illegal settlers (which they can not touch such business concept can be applied).  Enter into a contract growing with farmers who will say be paid 60-40% on straight gp sharing  for free farming, or 70-30% if paid on salaries.   At the same time this is going to be good politically to their in law who is a board member

Lack on thoroughness, inclusiveness in the work of the licensed real estate broker

Looking forward to the future of business

Our group has been offered a nearly 4 hectare project semi developed and the deal has been languishing since October.   It could not be blamed on us, but on the licensed real estate broker.

Two things are pending with the broker:

1.  We have requested a marketing plan since the person said that the project could be marketed fast;  we do not know anybody at the locality.  In the discussion last Tuesday, there were many details which were clearly selfish and excuses;   so an LOI to market was supposed to be marketing.   And said that the deal cant push through without the marketing plan.

2.  There is a major issue on the project.  It having been registered with the regulatory agency has a mention of a contractor who is declared as a developer.  We asked her to research this:    at DHSUD and Register of Deeds, as this agreement could have been registered.   Again excuses.    The lack of research and thoroughness, for a broker now, under very strict professional regulations, cant to my mind is up par with what a broker should be doing.  She is bound to have 7 figures income on this deal.  Not very professional and thorouh in her job.

I would like to think that the broker is not focussed on this deal, she has so many things in her plate, and lacks time and concentration to finish the deal.  It is challenging to call, or get her follow up on the deal

Despite efforts by govt agencies to up the competence of broker, its not happening.   Lack of desire for self improvement has something to do with this?

Its not surprising that not much is happening by way or personal and professinal growth

Dealing with B figures in business - real estate - housing

Professor on Entrepreneurship

Rizal Philippines
October 5, 2019

They say it takes certain kind of personality, character mindset, for you to jump from P100,000 sales to a million.  and so on.  Unless you take the leap,  if you sell only P100,000 thats the way its going to be.

So this calls for a lot self improvement, skills upgrade to make the leap.

So if you are a businessman, and you are used only to millions, aiming for B would seem to be a daunting and ardous task

It seems to me at least. The President  of a real estate company whom  I have been meeting in the last 5 days, says this year, he  would have sold P2 B h and lot packages.,  Next year he would target P5B, and on the 3rd year, he would target P10B.  Well thats for brokerage.

I aspire for business that we own.

I did not realize that it could be that easy.

Say for a 5 hectare project with 31,000 sm costing only Pxxxxxx with 373 individual TCT
200 75sm cut, and 150 150+ up sm cut

                   Plan A

                          200  H and L 75 sm    P1,500,000 each                      P300,000,000

                          173 H and L 150 sm    3,200,000 each                         553,600,000

                                                                                                              853,600,000

                         Malapit na sa B assuming walang price increase.  Kaya madaling yumaman si
                         MV and company.  Malakas lang loob mo

             Plan B:   raw land acquisition

                      100,000 x 60%      /75 sm        857  sm x 1.5 million each  1,285,550,000
                      Wow

                       

                                                                                                             

What are stable companies to invest in? Those that serve basic needs

Ateneo Professor on Entrepreneurship

Rizal Philippines
July 22, 2019

It is the observation of this post that the stable and profitable companies to invest in are those involved in serving customer needs rather than wants:   housing, clothing, food, security rather than those that deal in fancy wants, or esoteric products.  So those companies would be in food, food distribution, housing insurance financial services, communication services, expressway, office spaces, retailing etc.

Even if we look at the successful Venture Capital funding
40 best venture capital ventures

Those in entertainment music, travel, would be more risky

What do you think.?

N.B.  Our dean and classmate in College commented that RE took a beating in the 1997 crisis (due to excesses in Wall St for subprime mortgages, driving down prices and even causing bankruptcy and demise of revered investment banks and creating ripples in the financial capitals of the world;   the RE has long recovered because it is a basic need.  In NCR Philippines the price per square of meter of condo has seen its price rise up from less than P100k/sm to over P200k per sem and at MoA even to P500k/sm

There is a big difference between income generation and being wealthy

Ateneo Professor on Entrepreneurship

Rizal Philippines
July 20, 2019

I would like to make comments on the mindset of a newly minted millionaire who made a success in real estate marketing with cash flow of about  P1 m +for his brokerage fees.  So this comment is just like the comment of the accountant to Ray Kroc, the franchisor of McDonald's before who got only 1.5% as franchise fee and has nothing to show for the 1,000 or more franchisee he has.  The accountant said that the business model should be to make money on the real estate and not on the food.    The 1.5% is really a drop in the bucket.    The business is in the real estate. Buy the land where the store is to be put up and lease... Lease payments start on day one...  The land when paid off
by the lease can be mortgaged to buy more land.

I recognized this difference about 3 decades ago.  In a subject Management of Financial Institution, I had endless debate with a professor, an officer of a bank who said they were the same.  I am sure he retired as an officer of the bank, and was never wealthy. He had plenty of income, but not wealthy

Lease payments is income, having more land that appreciates is having more wealth.

For this millionaire, I noticed:

1. His mindset is that of a real estate marketer and focus is on the payment for the agents:  offices, vehicles..

2. However it seems to me that he is dawdling on how to be wealthy.  He is engaged in undertaking
     unrelated to his business and which are risky;

3.  Typical of newbies: buy buy buy stuff and signs of success: cars watch gadgets.

How to be wealthy....  You cant be wealthy getting commissions of developer.

He is developer too But he must separate the development company.   For taxation purposes  and strive to be legal and above board

Zhaing Xin a self made Real Estate Mogul

Ateneo Professor on Entrepreneurship

Rizal Philippines
July 15 2019

Before the real estate tycoons in the like of Shi Kai Ling, Trump, old and  conservative, male

Here is Xhaing Xin,  a child of cultural revolution, migrated to HK to become a factory worker, an investment banker at Goldman Sachs at USA.  Then she met her husband Pam  and decided to go into real estate... in China.  They dreamed of building Manhattan of Beijing.

They quarrelled and she decided to go back to England. She changed her mind and came back to help her husband.  They hired the world's best architect,  and used her IB knowledge to raise money for her projects.

She thinks China is now the land of opportunity (no longer US alone)

New Business Models Propel growth of existing businesses

Ateneo Professor on Entrepreneurship

Rizal Philippines
December 9, 2017

I did not fully realize that Business Model Innovation (BMI) is the great way to go.  We were bookish during the professor days. Academic days.  --> on how to really use and apply the concept

We were looking at a pick up, and there was this guy who said he just bought a Navarra Sport 4x2 AT, and wished he bought the premium 4x4 AT.  (That is P300t more than what he just bought)

We sat down and had conversation. And said he changes cars every 3 years, sells the old car for a much better price because he said he needs the car for representation and salesmanship.  His customers has much better respect for you if you come in nice new car.

So he must be rich and asked what his business is. And said he is into meat processing. And based in Tondo.  He said he is a niche player.    And then boasted that I did advisory work for the #3 in the industry.  And quickly mentioned that the #2 reached their stature (4x the sale of #3) arrived where they are using a very different business model.  And was very enterprising, because they did not use their own resource.Want to find out?   Call 0927 459 7888.

After that I had a meeting with a Pres of a real estate company who would not know what they would do with the marketing and operation of the new business.  For advising him and running the firm, without cash out, he would offer me 20% of the company. And using our brand.... Same strategy as what #2 did.  Well we can expand our business faster by employing the same tack.... What do you think

Another case of rearview mirror strategy on a real estate development company

Ateneo Professor on Entrepreneurship



I recently got the news that a strama defense scheduled tomorrow has been postponed for some reasons, according to the chair for the subject. The strama paper covered two companies:  the holding company and the operating company and is rather confusing as to which he discusses in various parts of the paper.  That is good news because it is a bad strategy.  The student merely repeated what they did before as the first project. A clear case of rearview mirror mentality/strategy



The paper are silent on the following:

Customers  - PTM

Product, mvp and how they impact the customer

The opportunities to be seized

While the paper was profuse on data regarding the industry:   office buildings, hotels, etc and their rent, the proposed project (plan) was unclear as to what opportunity shall be seized by the company including the features that will appeal to the intended market:  price, amenities, service, etc.

What wouldbe compelling about their new project/product? Why would people buy this project instead of other projects?