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September 12, 2010

It Matters: Getting To Know The Developer – PART 2

I read through my older posts and I came accross my article about getting to know the developer. I wrote there that I have another story to tell about my experience in getting my accreditation approved. I actually forgot to write all about it until recently,  I bumped into my old friend who is an electrical works contractor and he told me that he got this big project, a low cost condo project in Pasig and since we have our waterproofing business I said, hey that’s great! Who’s the developer? Can you hook me up with the project engineer so we can bid for the waterproofing works? Then my friend said, yes but not now. They don’t have funds yet and I myself can’t start my work because they are still waiting for their funds. Curious, I asked again. Who’s the developer? And he answered the name of the developer that I was supposed to be writing about.

The Story

It was after my DMCI accreditation that I met someone who is more experienced in real estate sales. He’s the one who invited me to get my accreditation with this low cost condo project. I accepted the invitation thinking, why not? It can sell faster since it’s very affordable. I went to the developer’s office on time and the first thing that I observed was that their main and only office is still bare. Walls are not yet painted, debris is still visible on the hall going to the CR but I didn’t see any construction worker there. And on one side, I saw a neatly painted wall with two beautiful solid doors. It turned out that it is the two model units for the project. I can’t help but think, with this office setup, they can easily fold up their business and run away and I wondered why they started marketing their project with this kind of office. Aren't they concerned about what impression this could make to the brokers and more importantly to the walk-in customers?

The orientation started and I was eager to learn more about the background of the developer. They did discuss their background briefly but it didn’t help me overcome my doubts with them. They said they are more than a decade in the industry but this is their first time to do a development here in Manila. Their previous projects which they claim to be very successful are located somewhere in a far away province. After that, they discussed the usual strengths of their project then spent the rest of the time encouraging us to sell sell sell. But when asked about the status of the ongoing construction, they said, the foundation of the building was already laid and construction will continue until the target completion.

With this answer, I assumed that they are relying more on the money generated by pre-selling the units to finish their building. This scared me as there are many cases like this where the developer failed to finish the project because of lack of funds. You can consider yourself lucky if they do  finish the project but the turnover date would likely be delayed a couple of years from the initial target date . This is the kind of risk that I don’t want to engage my clients with.

I didn’t pursue to market the project and I can’t help but worry for those who will invest their money with them. Until now, I’m hoping that I am wrong. But later I learned that the one who invited me didn’t pursue marketing the project either and the fact that my contractor friend can’t start his electrical works on the project due to lack of funds holds up my assumption that they do rely more on funds generated by pre-selling to finish their project.

The good thing about DMCI Homes is that they don’t rely on pre-selling funds to complete their project and that is why oftentimes, they finish constructing the building way ahead of the target completion date. It really matters to know the background of the developer because like I said, there are numerous cases where the developer failed to finish the project due to lack of funds. I’m sure you don’t want to be in this kind of risk so be warned and make the right choice.

Live a beautiful life!

Ryan Rillorta

PS. As mentioned above. We are a waterproofing contractor. For more information about our company or for quotations and inquiries. Click here

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