Last stormy “Gorio” Sunday, I took it easy by staying home and watched the news on TV. My luck was to stumble upon a GNN TV talk show of Miguel Gil. My attention and interest was immediately awakened when I saw Hon. Atty. Gerard Lukban, commissioner secretary of the Security and Exchange Commission, being interviewed by the host, Mr. Gil of practical business.
The moment I heard the topic on capital markets and protection of investors, I let go of the gadget to change channels and focused on what was being discussed.
Atty. Lukban, shares some important tips for investors. He started out with warning the public about “Get Rich Quick” schemes. Also, he shared his experiences about Pyramid scandals and Investment Syndicates.
Most schemes promise that participants can obtain this high rate of return with little risk, and with little skill, effort, or time. Get rich quick schemes often assert that wealth can be obtained by working at home. Legal and quasi-legal get-rich-quick schemes are frequently advertised on in internet, magazines and newspapers. Illegal schemes or scams are often advertised through spam or cold calls.
It is clearly possible to get rich quickly if one is prepared to accept very high levels of risk — this is the premise of the gambling industry. However, gambling offers the near-certainty of completely losing the original stake over the long term, even if it offers regular wins along the way.
Economic theory states that risk-free opportunities for profit are not stable.
Some investments, like the get-rich-soon method, may influence investors especially in real estate, one has to be careful about buying foreclosed properties.
Because of these scams, they will require investors to buy properties with legal impediments on a “as-is-where-is” basis.
If you happened to come across a cheap property, it is prudent to inquire and undertake due diligence.
It is best to get a professional opinion from a real estate lawyer or a licensed professional real estate consultant. According to Republic Act 9646 Section 3, it states that a Real Estate Consultant is a duly registered and licensed -natural person who, for a professional fee, compensation or other valuable consideration, offers or renders professional advice and judgment on the acquisition, enhancement, preservation, utilization or disposition of lands or improvements thereon and the conception, planning, management and development of real estate projects..
For example, Atty. Lukban warned the viewers about certain real estate development corporations that solicit investments, offering as much as 5% income per month.
One form of this type of investment solicitation is also known as “Build-to-Own”. The idea is to pool resources such as land, cash and construction materials that are syndicated or grouped into an Investment Fund.
In essence, there is nothing wrong with the Build-to-Own scheme or known as the “Communidad” concept, introduced in the Philippines by Quito Moras. A well known success project is that of Parque España, located at Filinvest, Alabang. The development if I recall right was with the Aranetas, Spanky Montserrat and Quito Moras group.
However, others have tried to make innovations and changes of the idea of Communidad. What is very important is the integrity, track record, and trustworthy financial resources of the group, corporation or partnership offering the investment proposal.
“The bottom line is to be vigilant, to undergo proper education on investments and to be prudent when making a decision. Investigate before you invest,” Atty. Lukban said.
Real Estate Consultant Ramon Cuervo III advised us watching his interview to be vigilant, and on the long term, to learn how to reap financial benefits in work and earning a living.
Fortunately, the Filipino investor is starting to be better educated, improving in financial literacy and calculates his appetite for investments.