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= 12/4/20 urgent message =
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= 8/31/22 hearing update =
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WE ARE IN A VERY DANGEROUS SITUATION !!! i just talked to our BIR contact, he said the official deadline of tax amnesty is dec 31, 2020. here is the rappler article - https://www.rappler.com/nation/house-passes-bill-extending-estate-tax-amnesty-two-years. the bill that extends the amnesty by 2 years passed in congress, but not yet approved by the senate because of the pandemic. he said most likely the senate will approve the bill, but that is not 100% sure. also let's say the senate will approve the bill on march, that means if we pay the estate tax on january or febuary, our tax will be P63m. we will have to wait and PRAY the senate approves the bill before we can pay the P6m. that means we should not wait for the annotation of the mambaling title because the hearing won't start until last week of december. we should accept the current offer of P30m net.
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last month's hearing was postponed to today because last month, atty gica failed to comply with the annual requirement for his license to practice law. atty balili explained to us that it's common for old lawyers especially the known legends to feel entitled and not comply with the misc requirements. in the past they can get away with it but nowadays the court system is very strict.
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tita jane, please fedex the mambaling title as soon as possible. let's say because of the pandemic the bill won't be approved by the senate until june 20201. that means for 6 months we won't be able to sleep knowing our estate tax bill is officially P63m and there is slight chance we won't get the amnesty.
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today's hearing was postponed again to sep 29. a 15 year old boy was in the hearing and claimed he was Ang's lawyer. the hearing today was suppose to be for atty gica to present evidence why Ang should be co-administrator. so the judge asked the boy to present evidence and the boy said he does not know anything about the case. the boy said he is an associate lawyer in gica's law firm and gica just messaged him 3 days ago to attend today's hearing. he has been trying to contact gica and Ang for the past 3 days but they would not reply his messages. so the judge got angry at the boy and punished us by postponing the hearing.
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the boy came to me and asked me what the case is all about and asked me how he can contact Ang. he said he never met Ang and does not even know what he looks like. atty balili was also present. i told the boy that if he wants to make a name for himself to follow the advise i'm about to give him.
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= 12/3/20 message =
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i told the boy this case is as simple a 1+1=2. we owe Ang 1.6m plus interest. Ang sent us copies of his court petition demanding P6m in 2016. we included Ang's demand letter in the petition for administratorship. we already told Ang that we have the money and we want to pay him his P6m anytime. so there should be no problem. the boy agreed and atty baili supported my statements. atty baili then told the boy that if we really want to, we don't need to pay Ang anything because the case has been prescribed. atty balili explained more details and the boy agreed that the case has been prescribed and we really don't need to pay anything anymore. the boy was shocked and agreed it's really stupid for Ang not to accept the P6m.
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------ mambaling buyer who doesn't need the right of way
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i told the boy it's clear gica is just trying to scam Ang and not interested in doing what's best for Ang. i suspect gica is just trying to prolong the case so he can continue to earn lawyer's fees. i told the boy about the previous hearings where gica interrogated my aunts and all his questions where irrelevant as if he just wants to show Ang he is doing something. i told the boy the judge is clearly on our side because when the judge asked gica why Ang won't give up the titles and gica replied they need it for proof on their claim, the judge told gica, "the crystals already included Ang's claim and the P6m demand in the administratorship petition. what more do you want?". the boy and atty balili strongly agreed with my opinion.
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just like some of the interested buyers of mambaing in the past, we have a buyer for mambaling who does not care about the right of way because what they need is at least 5,000 sqm for residential development so they need to buy the property next to ours which has a frontage and is 3,000 sqm. so combined with ours which is 2,369 sqm, it would meet their 5,000 sqm requirements. the past brokers have been telling me the owner is in the states and very hard to contact.
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i told the boy that this is an opportunity for him to build a reputation that he cares about his clients more than money. i told him i was never a good engineer but the reason why i kept getting promoted and ending up earning P150k or P7m a year in silicon valley was because i built a reputation as someone who never takes advantage of anyone and helping others and making other people happy is what makes me happy.
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all i know is the name of the caretaker is girlie. so i went there to try to get the contact info of the owner from girlie, maybe if bowie can call the owner in the statess or even meet face to face it would make the deal have higher chance of success. turns out girlie if very nice and cooperative. her FB messenger account name is Gigi Navarro, the woman with blonde hair. you can chat with her via messenger. she knows exactly the price – it’s P55 million and the owner will give 2.5% commission. she told me the owner's name is Mrs. Helen Young Spencer, and turns out she can easily be contacted via messenger. her profile picture is the woman holding 2 red flowers. turn out Mrs. Spencer’s price is fixed at P55 million (~P18k/sqm) and does not want to negotiate. however the brokers would keep bugging her to lower the price, maybe so that they can earn bigger profit. this annoyed Mrs. Spencer so she blocked the brokers who kept asking her for a lower price.
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i told the boy to talk to Ang personally and show Ang you just want to do what's best for your client. i told him to advise Ang to just take our P6m payment so we can all move on and he won't have to waste time, unecessary stress, and money paying lawyers. there's also no chance the judge would allow Ang to be co-administrator because he can't even attend hearings and his new lawyer can't even contact him to prepare for the hearing.
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i gave this info to the buyer in hopes he will be aware not to annoy helen the owner and avoid ruining the deal. although i am confident we will win the case and the right of way of mambaling will be annotated by early january and tito jojo's buyer will push through, we should not rest on our laurels and we should always exhaust all options because we never know which ones would be our savior.
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i then showed the boy the google map location of Ang's house in mandaue. i advised him that Ang does not talk to anyone face to face. the guard will call Ang and you just talk over the phone.
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another lesson to be learned here is we should post our for sale properties in lamudi so we can also reach direct buyers, not just brokers. of course we should still meet with brokers because there's no harm and they can still give us more chances.
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= 4/22/22 hearing retrospective =
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---- valuing our mactan lot
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(just sent this to atty balili. we should learn from yesterday's hearing that everyone should at least trust me so i will have less mistakes and the judge won't be angry at us. the judge was angry at us for submitting the inventory after the deadline because nobody was replying my postings in our chat group soliciting info on the missing mambaling and toledo titles so i didn't know what to put in the affidavit of loss so i can legally put in the inventory the status. if we make these kinds of mistakes that angers the judge he might assign co-administratorship to Ang)
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looks like the mactan buyer is backing out. note our asking price was P13.2M OR P8k/sqm. also note that if we had had a right of way wide enough for cars, the value is easily P50k/sqm or P82.75m. but i think it's a blessing in disguise because even if we had a wide right of way, the most ideal use of the property is bed spacing or something similar to munoz. bed spacers don't usually have cars. note that the width of the current right of way is more than enough for motorcycles. because of the very strategic location, workers in mepza, city hall, gaisano malls, hotels and resorts will be clamoring to rent it if we only offer P4k/month per room (note munoz's m5 si P6k/month per room). they can have a roommate so they only need to pay P2k/month. note most bedspacers are usually jam packed with at least 4 people per room and at least 8 people sharing a bathroom. with ours, each room have a bathroom (similar to m5).
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good morning atty, i want to summarize our meeting with tita georgia and tita doris yesterday and also report it to the heirs to ease some of their worries. i also have a few questions and requests. first, in behalf of the heirs, i would want to express my gratitude and thanks. the heirs feel so blessed and lucky to have you as our lawyer. based on our experiences, the heirs sincerely believe that your expertise and competence is very rare and there is no way the problems of the estate would be solved if you are not our lawyer.
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now let's compute the potential earnings. note i am being very conservative here. i'm even assuming P4k/month per room instead of the realistic P6k/month. m5 has 52 units on a 444 sqm property. that already includes parking space. that means we can easily have 3 m5's on our 1,655 sqm with 323sqm left to spare (in case there are easement requirements). so 52 X 3 = 156 units. let's assume worse case scenario where we only have 50% average occupancy because of an architectural flaw where there is a water leak problem similar to munoz's m5 (note munoz is currently having financial propblems and even mortgaged P8m from the bank using m5 as collateral). so 156/2 = 78 X P4k = P312k per month earnings or P3.74m/year. let's assume a PE of 20 which is very low considering the PE of S&P500 right now is 31. using a PE of 20, the value of mactan lot is a whopping P74.8m. and that's using assumptions that insanely and intentionally undervalues the property. so it's value to our family if we use it is P74.8m minus cost of construction. note the PE of our valle verde condo is 27 (P10m/P360k). and i'm giving our mactan property only a PE of 20. it actually makes sense because munoz is currently trying to sell m5 at P20m because of the architectural problems of the building. the land value is P20k/sqm X 444 = P8.9m. that means the cost of the building is around P12m. so P12m X 3 = P36m. let's deduct it from P74.8m so the land value of mactan to our family is around P38.8m, using insanely conservative assumptions. so next time a buyer of mactan offers P13.2m or even P20m, give them the finger. i'm kidding actually if we haven't sold any property yet and haven't paid the estate taxes we should take the P20m offer.
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- the #1 priority of the heirs is to pay the estate tax, including toledo, before the amnesty deadline. i just want to inform the heirs that you confirmed that after the hearing on may 18, there should already be an order from the court to direct the BIR to submit the final computation. the money set aside is P4m. the initial estate tax computation is P2.8m including toledo 6ha 3816, .1ha 3817, 3.5ha 4129 and .38ha 4130-prt. but this EXCLUDES TOLEDO (60ha 4126 + 6ha 4127 + 9.8ha 4143 + 1.8ha 3820 + 2.2ha (no lot#)). let's call these "toledo new tax decs" because we took possession of their tax decs only last year (after many years of wrangling).
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where in the world can we get P36m for the buildings? the beauty of this idea is that we can start with just 1 building so we only need P12m. this is actually small relative to the sale of any toledo property.
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- the #2 very big concern of the heirs is the P9m estate tax computation of the toledo new tax dec properties. the fair market value assessed was P200/sqm. however, you said it's possible to negotiate a settlement with the BIR and maybe bring it down to P3m which brings our total estate tax to P6m. the heirs also claim that 2 years ago, they were looking for buyers for the toledo property and the best offer they got was only P50/sqm because there was no right of way and it was forest timberland. which means at the time of death of my grandparents (1995 and 2001), the fair market value has to be much less than that. in fact, the reason why NGCP won't pay us for the 4 towers they put in our property is because until recently our property was classified as forest timberland which is imminent domain. we would also like to get advice on who to consult in the BIR regarding this matter. my father has contacts in the BIR but i don't want him to get too involved due to his health.
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the bedspacing idea does not really require expertise. we don't have to reinvent the wheel we can follow m5 design and call ours c1, c2 and c3. even hire the same architect or contractor. except of course we need them to explain to us the architectural flaw of m5 that is causing the leaking problems so we can verify if they fixed the design. i feel sorry for munoz we just made him our guinea pig.
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- the #3 big concern for the heirs is the source of funds to pay for the "toledo new tax decs". we were blind sided when we received the P9m computation. we were always under the impression that forest timberlands have very low zonal and market value. in fact at the time of death the zonal value for the new toledo tax decs was only P10/sqm. until yesterday, we never worried about the source of funds to pay for the additional toledo estate tax because we had interested buyers for our mambaling property. but in yesterday's hearing we learned that because the amnesty has been extended to june 14, 2023, the judge might not approve the payment of capital gains tax which basically means we can't sell. although the amnesty deadline is still 1 year and 2 months from now the heirs are very worried because we have no idea when we can actually have a hearing where the judge will order a final computation from the BIR and appoint a regular administrator. it's obvious to us that atty gica is trying his best to delay the hearing and it seems there are lots of tools in his disposal to delay the hearing.
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it's very easy to collaborate nowadays using online collaboration tools and accounting systems that provide transparency where everyone can see the revenues and expense down to the last cent. christian can help with the IT area. i can also help with setting up a system and documentation for all kinds of operations such as maintenance schedules. we just need to document all responsibilities and duties to make it flexible for any member of the clan to join and leave the business. there are so many members in our clan each with our own skill set so we will never run out of manpower.
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the problem is if the appointment of regular administrator keeps getting delayed, there might not be time left before the amnesty deadline to sell mambaling. we would like to request in the next hearing to inform the judge about these legitimate concerns. all we ask for is that if the hearing or appointment of regular administrator is delayed again, that the judge assures us the court will approve the payment of capital gains tax. the heirs would also want to request that in the next hearing, to inform the judge that we cannot be making offers to sell yet unless we can assure the buyer that the sale will be finalized without any hiccups. also inform the judge that it can take many months and even more than a year to find a buyer at a fair price.