Money Matters

I've never been good at money. I think I inherited this trait as a recessive gene on my mother's side. Hence, this is definitely my number one concern when it comes to picking up and moving to another country. I've been doing a bunch of research this week on how we would finance our dream.

There are 37 universal and commercial banks operating in the Philippines, in which 17 are foreign banks. The top three banks in the country are Metrobank, Bank of the Philippine Islands and Banco De Oro Unibank. All three provide small business financing. The good news is that the Filipino government has been encouraging foreign investment, especially in tourism. There are special products at each of the banks specifically for building and renovating hotels or other tourist facilities.

So here's how it would break down. I'm anticipating that we would spend about US$600K on purchasing a property and then spend another US$200K on renovations and supplies and then have US$200K for working capital. From what I've been reading, it's likely that we could get financing for 75% of the project. That means that we would need at least US$250K in cash to get started. So where the heck are we going to get this much money?

1) Savings

JT has been bugging me to really take a good hard look at my finances and actually start spending and saving from a budget. He seems to think that we could come out with at least 100K from this if I continue to make the salary that I do and if he takes over managing our money. I think he's being overly optomistic, but I'm willing to hand over my paycheck to him every month if it makes this dream become a reality.

2) Kate's 401K

I am saving for retirement, but that's only because they take it out of my paycheck every month. I've built up some money here and while the thought of spending all of it on this venture is scary, I like to think that if we lost it all, then I'm still young enough that I would have time to catch up in that department.

3) The sale of our three properties

I have bought 2 houses in my time in Charlotte. I say those are "real estate investments," but at the time my main motivation for buying them was that I wanted to have a place to live and decorate. At least now they are both rented out and are actually earning equity.

The house we live in, we bought for a great deal. If the economy was at it's peak, we would have about $60K in equity already. Here's hoping that when we finally move, we'll have enough in those three houses to take a big chunk out of our $250K goal.

4) Investment from family members

I am most wary of this one. While I know my family members would willingly invest in our venture, it's one thing to risk your life savings, it's quite another to risk someone else's money - especially when it's people you love and care about. Ideally, we'd like to do this all on our own.

Some links:

Information from Metro Bank on Small Business Financing

Information from Banco de Oro Financing

Bank of the Philippine Islands

Thoughts on Leyte

Today, I'll be sharing my thoughts/research on Leyte. Ting had indicated that it is the next up and coming location for diving, which would certainly drive traffic to our resort. There seems to be a lot of interesting dive sites, especially viewing whale sharks. There also seems to be a ton of places to go trekking in the jungle, which I know JT will like. I get the sense that it's more "untouched" than some of the other sites.

Resorts For Sale:

Hindang, Leyte, Philippines

Mahayag, Albuera, Leyte, Philippines

Both of the resorts seem to be well established, but I wonder why they're selling. I would think that given that the area is still up and coming, we would have to have capital to keep us afloat until we can establish regular clientele.

JT and I were discussing this weekend if we would want to be somewhere that is established, with steady traffic of vacationers/divers already travelling to the area vs. being in a smaller resort village where we would need to do a lot more marketing, but there is less competition. There are pros and cons to each, but ultimately, we couldn't come up with an answer until we actually visits the sites.

While it's important to us to be monetarily successful, it's more important that we live somewhere where we like the lifestyle. JT would be all about living in the jungle, with no city resources around. I would want to be able to do a little shopping without having to drive more than an hour. Can you imagine if I had to take a boat to buy diapers? It's a balancing act.

Vitamin Sea Resort

Just for fun I emailed the owners of the Vitamin Sea Resort. Here's what they said:

We have cut the asking price from 29 million pesos to 25 million pesos! for a quicker sale. The resort will sell all of the buildings and their contents along with the boats in the sale. My wife (Anecita Midkiff) will sell the land. As the new owner you will own 100% of the titled land and the resort The resort is designed to have 6 luxury Suites about 40 sqm and a Presidential Suite about 80 sqm on the first floor. Each room has a private terrace, living room, bedroom and C/R (bathroom) with dual sinks outside the C/R. The presidential suite is designed to have a private kitchen. There is a 145 sqm restaurant/ bar plus a partly furnished 3 bedroom 145 sqm air conditioned apartment on the second floor with breath taking ocean and mountain views Also , we have a luxury beach bar with billiard area 90% complete. The suggested rental prices for this resort as compared to our neighbor Anda White Beach Resort is 5,000p or more a night for the 6 suites and 10,000p per night for the presidential. Pool is dug but not started and is designed to be an infinity pool. The Resort is currently 75% finished. An extra 4 million pesos ($85,000 USD) will “turnkey” the resort.

Nearby cliff top resort “Bluestar” just sold this past year and was on the market for 35 million pesos with only 7 fan rooms and no restaurant. Anda is slated to be the next great destination in Bohol. There is a pristine 14km reef for diving right in front of the resort. Sand is whiter than Boracay. The resort comes with 32 foot banca style boat good for snorkeling or diving trips and (2) 15 foot paddle bancas. A large storage Building with (3) 2000 liter blue poly water tanks and a beautiful cottage for 4 stay-in workers with an extra storage area in the attic. Also, you have sellable rights to 1/2 kilometer of power lines that we had installed by the electric company. We also have a new 25 KVA transformer and 5 brand new Sanyo split type air conditioners. Various tools, small generator, jack hammer and many other items convey.

Our reason for selling is a disappointing story. My wife’s relatives were supposed to help us build the resort and instead embezzled and stole funds to the extent that we ran out of money before we could get it functioning. We do not want to use financing and my 2 young american children wish to go home. All papers for titled land and buildings are clean. This sale is distressed due to the fact there are no more funds left to get resort operational. I hope you can take advantage of this sale to purchase this titled land with a beautiful 3 bedroom 145 sqm apartment attached to a 7 room luxury resort with restaurant. Paradise awaits!

Thoughts on Cebu

I've been researching all of the suggestions that Ting had, starting with the first location - Cebu.

So far, most of what I know about Cebu is what I've read on Wikipedia. Kind of pathetic. I've never had the opportunity to visit.

What I like most about Cebu is that there's both a city and remote island locations close by. I've mentioned before that I would like Elyanna to attend an IB school and there is one in Cebu City. The logistics of going from our resort to that school are yet unknown though.

Another benefit is that there's already an international airport there as well. This will be essential for our potential guests.

The island of Mactan would be ideal since it's the closest to the city. However, I think my favorite is Bohol on the Comotes islands. According to my aunt, they have clients there with beachfront properties. It would be great to have contacts already. I even found a resort that is for sale there, called Vitamin Sea Resort. It only has 7 suites, so we'd have to expand, but how beautiful. I contacted the realtor, and we plan on seeing the property when we visit in February. Hopefully, it will still be available.

More interesting links:

Doing Business In Bohol

Another Resort for Sale - This one seems to be really hard to access though.

Augh...does anyone want to lend us $700K US to get us started now?

Love Love Love

I'm not sure if this post is directly related to the topic of this blog, but I'm going to write it anyway because I want to remember it.

JT came home last night and immediately wanted to hold Elyanna. He took her out of her swing where she was happily napping and cuddled and cooed with her. I gave him her bottle and they settled into the chaise for a feeding.

He is smitten. He told her how much he loved her and how proud he was of her, even though she hasn't accomplished too much in the four months she's been alive. He called her the most beautiful girl in the world.

I feel the emotions welling up just remembering the scene.

His tears welled up too. He told me that he feels his love for Elyanna is dangerous. Dangerous because he knows that he will give her whatever her heart desires. I assured him that it is not dangerous because his love will ensure that he will always have her best interests at heart.

I love that our daughter already has her father wrapped around his little finger.

We miss her everyday we have to go to work. We can't wait until we can make this dream come true so we can share more of our lives together.

Information From Ting

Over the summer, we were fortunate enough to have many visitors to see Baby Elyanna. We even had my Tita Chit and Tito Fred, my father's older brother, come down from the Philippines. Over dinner in Myrtle Beach, JT and I told them about our plans. Tita Chit offered up a contact - her neice Ting - who happened to be a diver. Ting and I exchanged a couple of emails, but this one was really valuable:

Hi, Kate.

Nice to meet you.

I wouldn't call myself an expert on Philippine diving. I just like to dive a lot and have been to some of our most popular diving destinations in the Philippines. But this was some years ago. Ever since leaving the country to work and study overseas, I am afraid I haven't been updated about where the best diving is to be had these days. But I'll share with you briefly anyways my recommendation based on my stock knowledge about the industry.

The most popular sites that most foreigners go to would be Puerto Galera, Northern Palawan, Cebu and Bohol. In these places, you can definitely find somewhere to build a resort, or perhaps, purchase an old one. I'm not sure about the land/lease prices though. As these places are popular, they might of course be a bit more expensive. And you'll have lots of competition.

Based on what I have been hearing from diver friends over the years, if I was to look for a place to put up a resort, I would try either Leyte - this is a new diving destination that is gaining popularity these days. A quick search on Google tells me only a few resorts are currently operating here.

The other location would be Southern Palawan. I attended a travel seminar about the government's plan to build a new airport in the souther tip of the island. The north is already a very popular diving destination (El Nido, Coron, etc.). But the south remains largely unexplored due to accessibility issues. But I would bet this is a more interesting place to build precisely because of that. With the new planned airport, things will definitely pick up.

I might also want to consider the island of Camiguin (ridiculously affordable diving, though not too many dive sites). Or if you have the resources, fund an exploration on the Pacific side of the Philippines. My dive instructor and some friends are currently doing exploration dives on that side of the country (particularly in the north of Luzon - Cagayan, Tugegarao, Ilocos). If you want, I can put you in touch with him and he can most likely give you better recommendations and even be available as a consultant for your planned diving business.

I hope the above information helped. If you have any more questions, please feel free to email back.

Cheers,

Ting

So there you go! I've been doing research on those places that she mentioned and have narrowed down which ones we will investigate further. More to come...

Homeschool vs. IB School

I graduated high school from St. Mary's in Calgary, Canada. I'd say that I probably had one of the more positive high school experiences, at least compared to most of my friends and acquaintances who have described scenarios of fights, gossip, cliques, sex, drugs and rock and roll. We were relatively sheltered at St. Mary's, a public Catholic High School with an International Baccalaureat program. Don't get the wrong picture. This isn't your typical Catholic school. Yes, we did have Religion classes, but my senior year, we were tasked with learning about Judaism, Hinduism and Buddhism...perhaps to compare and constrast how awesome Jesus was compared to those others, but nonetheless....

Anyway, given that there was an IB program there, most of my friends were "smarty-pants." Not really nerds, though some were, but just regular folks like me - precocious, a little above average and motivated to learn as compared to other high school students. It was really the first time that I felt like I was part of the majority.

When I think about my daughter, I always imagined that I would send her to an IB school as well. This is assuming that she'll be book smart like her father and myself. JT and I definitely share a love for reading - a love that we hope to pass on to Elyanna. Between the two of us, we have hundreds of books, so many that we had to fill a whole wall of our formal living room with shelves and now call it The Library. We try very hard to read to Elyanna everyday.

So yes, her education is very important to me.

That extended preamble brings us to the topic at hand - what is going to happen with Elyanna's education once we move to the Philippines?

The first option that we thought of was homeschooling. Given that we will have more time to spend with our daughter, why wouldn't we spend that time teaching her Math, Science, English and History? There are benefits - learning would be very different for her. It would be hands-on, self-motivated and not at all like the regimented structure that her father and I grew up with. We can be very creative with our lessons - going out to tidepools to look at creatures for biology class, counting out a cash drawer at the front desk to learn arithmetic, reading a book together, book-club style as a family and reporting on it later. Those activities sound idyllic. In addition, school could happen anywhere - whether we're on the resort on a remote island, visiting family/friends back in North America, or touring the world on the off-season.

But it seems such a huge responsibility. Instead of relying on the village that is a school system, we would be solely responsible for Elyanna's education, a large influencer on her future. That is a large burden to take on! Could we do it?

I've told JT that I'm comfortable with that option until Elyanna get to 6th grade. After that, I'm not so sure.

We've talked about hiring a tutor. Someone who could be a caregiver and also be more qualified (someone with training in education) to teach our daughter. But how much would that cost? And the search for someone like that seems daunting.

I've had discussions with my Tita C about American Schools in the Philippines. There are IB schools in Manila, of course, but the only one that was even close to where we might be is in Cebu City. A couple hours away are the resorts, so perhaps we could send her to a school there. That would mean that she would commute or maybe I could get an apartment in the city and stay there with her during the week. Not the best option to be separated from her father, but it is an option.

So yes, this does weigh on my mind. I ultimately believe that Elyanna's life will be far richer on a resort with her parents than the traditional suburban lifestyle. We love her enough to ensure that becomes true.