Profits from asset revaluation? - to make themselves Number 1?

Looking forward to the future of business

A business firm by a Filipino billionaire this post believes, used financial accounting magic (ledgermain) to post up his business to have earned P1trillion in profits.  While this may be legal and in accordance with GAAP, comparison with other companies can not be held acceptable:   all ready comparing apples and oranges.  Sales revenues as against asset revaluation.  And the business owner has to pay taxes on unrealized gain.  

The question is:   can you sell the properties at the published prices in the asset revaluation:    P200,000 memorial park plots anywehre in the Philippines..   X amount (hundreds of thousand pesos/sm at Villar city

What did the billionaire gain by revaluation?   Holding himself in high esteem in the business community?  Did he creeate wealth for others?  Did he create jobs?  Did he improve the econnomy?

Maybe we could do the same to our inventories and declare ourselves billionaires.  ?

Rappler on MVillar insane 2024 trillion profit

Leveraging and OPM - that is the magic and what real estate deals are all about...

Ateneo Professor on Entrepreneurship

Rizal Philippines

History of Meralco

The real real estate deals are those where little or none of your money is used.   And only brilliant deal makers entrepreneurs can do that.

Examples.

1. Purchase of Lopez from GTU of Meralco...

    Under the Laurel Langley agreement, all US owned companies in the Phil by 19.., they shall be sold and transferred to Philippine owners, especially the utility firms like Meralco, Channel 7.
Classic was the purchase of Meralco by Lopezes from GTU

   1.  Lopez using personal money makes a DP;  Lopez borrows from PCIBank

   2.  Lopez executes a Contract for term payment of Meralco (which could probably come from
        earnings,) say 10 years

   3.  Lopez incorporates a holding company to hold the Meralco shares, keeping corporate structure
        of Meralco intact:  Meralco Securities Lopez of course are the majority stockholders

   4.  Meralco floats some of the shares at an IPO.  The proceeds are used to  pay off the PCIBank
        loan.

   Question:  did Lopez use his own money to buy Meralco..? At the end he did not spend a single
    centavo.  Only the genius of Lopez could have thought of that...

On being an Angel Investor/Angel

Ateneo Professor on Entrepreneurship

Rizal Philippines
July 20,2019

While I was teaching, one of the required special reports was on Angel Investors.   Anyone could look for one or be one later on.

I  find now myself in the latter situation.    Who is an angel investor:   compared to venture capitalists, these are former entrepreneurs who put in their time and money to assist businessmen who are in trouble.  Or start ups.   They do  not have very strict rules but do require high returns because of the risk involved.

One such group was the group of Dennis Mendiola who was helped  by the Pres of Meralco now (he just retired from Meralco then).    The Angel Investor gave the  group of Dennis the  connection with SMART to make a software for them (involves the E load send)

Those that are I have on my plate are:

New

1.  One memorial park queen pin in an island province wanting to put up 10 in first class municipalities for the next 10 years;

2. A marketer turned developer who needs assistance in funding and new business model.

Turn around:

1.  A memorial park in Northern Iloilo

2.  A memorial park in the heart of Iloilo

3.  A memorial park in Northern Luzon.  This needs huge amount and time because  it has been foreclosed by a bank after being in arrears for nearly 15 years for 8 numbers.

Hoping to help tackle all of them

Read my newest blog on small stuff lessons

Opportunity in a foreclosed memorial park at the north

Ateneo Professor on Entrepreneurship

Rizal Philippines
July 20, 2019

I was invited to a meeting two Fridays ago regarding a 6 hectare  foreclosed memorial park at the  north...Foreclosure amount was P15M, with only 200 plots remaining for phase 1 (only 2,000 salable) plots.

The lady who invited me a JV partner owed her still P4 million (that was borrowed to partially pay of the lender.  Despite that P15 million pa utan.

The owner herself is hopeless.  As it is it looks really hopeless   Sales were sometimes 3 to 4 a month, not enough to pay operating expenses much less pay off the loan.

The good news are:

1.  There could be a total of 3.5 + 3 hectares more to develop;  for the 6.5 hectares available,  we can
      produce still:   6.5 x .55/2.5  =14,300 plots x 45 K  = P643,500,000.   That could:  be used for
      development  -   say

                            Development cost                                            P64,000,000 m
                         
                            Bank foreclosure                                              P15,000,000
                             and the lady lender                                              4,000,000
                         
                           and cost recovery by the land owner.                           
                           say 65,000 sm x 1,500 /per sm                           P65,000,000

                                                         Total                                      148,000,000


                                                                     Total estimated rev   643,500,000

                                                                     less 50%                   321,750,000

                                                                     Net lot price             321,750,000

                                                                     Less                          148,000,000

                                                                                                      173,750,000

                           


2.  The town is a first class municipality and classified by Wiki as financial and commercial center of
     province.  There are 25 banks in the town and there is a Savemore, Jollibee and KFC

3.  Their pricing is at P1,800 per month.  But buyers say if it is P800 per month or less tatakbo;
     Acceptable pricing is P45K up...

4. Sementado na road papuntang site; 

5.  It is nice memorial park at the hill, katapat municipal cemetery

Today is a lucky day; plenty of opportunities

Ateneo Professor on Entrepreneurship

Angono, Rizal  PHL  | July 8, 2013

Yesterday was 7.7, 2013 (total 6 my destiny number, this is my year)

Do I believe in luck and numerology?  May be yes and no.  Yes, because we need all positive thoughts to become successful;  no because I believe that nurturing connections, being good, being skilled and sharp gets you ready for opportunity.

Today, these were the opportunities for me:

l.  Cheaper and new equipment for interment;  we can buy here instead of importing from USA;

2.  Three memorial park sites in the north, all in heavily populated areas;

3.  One memorial park in the north that has conflict but which we believe we can manage and sell well.

4.  One subdivision site in MM only for P3t per square meter.

Wow.  The Lord has been kind to us if we can get them.

We also encouraged the one who is brokering this, who was left by her husband to go back to construction.

We encouraged our OIC who has been given ORC benefits to look into these