Buying into the American dream

The Filipino dream of owning a property in the United States can still be a reality even if one is earning in pesos.

"We are making that dream possible through our land banking scheme at Golden Ridge Ranchos," said Golden Ridge Sales Corp. vice-president Randy Dizon.

The land banking scheme started in 1996 when a Dizon family corporation, 7-R Port Services, decided to diversify its port services business and entered the real estate business.

"It was timely as we were able to purchase 700 hectares of raw land adjacent to the Old Spanish Trail Highway, Inyo County, California, which is near the border of Nevada. Today, after eight years, there is development around the periphery of the former desert. Proof of this is the Pahrump Valley," said Dizon.

Located about 45 miles from Las Vegas, Pahrump Valley was formerly a residential community which housed Las Vegas residents. It has since evolved into a self-sustaining town with its own commercial and industrial facilities, with real estate selling at $4.28 per square meter or P800/sqm.

"We are seven minutes’ drive away from Pahrump and we are selling raw land at $2.30/sqm. or P130/sqm. Most of our buyers are Asians. The catch is interested buyers will have to buy at least a hectare," said Dizon.

Under the company’s land banking scheme, a buyer will have to wait for five years before he/she can resell and profit from his/her acquisitions. A buyer can, however, immediately build on his/her property. To date, there are already 36 households in Golden Ridge Ranchos.

"There’s electricity and water via deep well but the further development of roads around the area will depend on government," said Dizon.

Property Strategy

Land banking is a real estate industry practice of developers and speculators who identify a property which has the potential of increasing its value over the years. There are at least five key factors to consider when going into land banking. These are proximity to developed areas, movement of population, accessibility to road network, government spending, and infrastructure and utilities.

"Using Pahrump as a benchmark, 2000 statistics showed that the area experienced an 82.7% increase in population because the cost of living of residents is lower than in other key US cities but the annual income of the residents is the same," said Dizon. "Accessibility to key cities is ensured as a major highway is being converted from a four-lane to an eight-lane starting August this year. Government is also pouring in investments in telecommunications, hospitals, and public schools."

Of the original 700 hectares, Golden Ridge is currently selling only 200 hectares. The company requires a 12% down payment, which is put in a bank escrow account. Amortization is made over 10 years and locked at the current peso-dollar exchange rate.

"The documents, which include the transfer of the title/grant deed to the buyer’s name with some annotations, are signed at the US Embassy. We also give buyers round-trip tickets to the US for a site inspection," said Dizon.