Author Topic: Pawn Rice Farm  (Read 550 times)

Offline robob23

  • New Member
  • *
  • Posts: 2
Pawn Rice Farm
« on: November 23, 2016, 12:43:18 PM »
Hello, first time posting here. My wife is from the Philippines and we currently live in Hong Kong. Someone approached my wife's father about wanting to pawn his farm. He said that if he sold the farm to the Bank outright that he would get 2 million pesos. He wants to pawn the farm to us for 800,000 Pesos. My wife explained to me that we would make a contract for 5 years. So for 5 years the farm would belong to us and we could harvest the rice and keep the profit. At the end of the 5 years we would either negotiate to buy the farm by paying more or make a new contract and continue the arrangement for another 5 years.

I am a little hesitant on the part about renegotiating after 5 years, as this does not seem advantageous to us. I actually have no experience in this kind of thing. Any advice on what information we need to get before making a deal like this? What kinds of things I should look out for? How to proceed?

Any help is much appreciated. Thanks!

Offline iamjames

  • Sr Member +
  • Sr Member
  • ****
  • Posts: 964
Re: Pawn Rice Farm
« Reply #1 on: November 23, 2016, 02:29:42 PM »
A simple question  - and the answer will horrify you: Ask what is the rate of interest? Per annum???

A simple rule - NEVER, NEVER, NEVER conduct any financial transaction in the Philippines without being physically present and understanding ALL the details.

Offline Lee

  • Administrator
  • Sr Member
  • ******
  • Posts: 3,246
  • Moderator
Re: Pawn Rice Farm
« Reply #2 on: November 23, 2016, 03:48:15 PM »
How do you know what it is worth?
How do you know if there are any other outstanding loans on the property already, or if once they get that from you, that they will not then borrow from someone else or a bank.
The Philippines is not like back home, therefore unless you have that money to throw away, stay clear.
Also as already written, if you do not live there full time then it is much easier for someone to take advantage of you.
:) Happily married since 1994 & live part of the year in Cebu and the rest in S. Florida.

Offline lost_in_samoa

  • Sr Member +
  • Sr Member
  • ****
  • Posts: 153
Re: Pawn Rice Farm
« Reply #3 on: November 23, 2016, 04:45:47 PM »
He wants to pawn the farm to us for 800,000 Pesos.

Caveat Emptor.

I was offered a similar deal.  I said "sure, my attorney will set up the contracts and escrow structure to sign the deed over to for the loan period".

The vacuum he created leaving sucked the papers off of my desk!

Heads up!



Offline Igorotak

  • Full Member
  • **
  • Posts: 34
Re: Pawn Rice Farm
« Reply #4 on: November 23, 2016, 05:43:45 PM »
Stay away from this sort of "deals" as far as you can. There are no guarantees that the farm has a "clean Title". You never know who the beneficiaries are (and how many!) And they will come out the woodworks as soon as you have handed over your money.

Worth reading: https://www.securitybank.com/blog/7-ways-to-ensure-your-land-title-is-real-and-clean/

About the Rice Industry: http://www.fao.org/docrep/x5427e/x5427e0i.htm

About investing in the Philippines: If you have 800.000 peso to spare, your chances of making a profit are better in a Casino.
« Last Edit: November 23, 2016, 06:13:20 PM by Igorotak »

Offline FMSINC

  • Sr Member +
  • Sr Member
  • ****
  • Posts: 414
Re: Pawn Rice Farm
« Reply #5 on: November 23, 2016, 07:53:38 PM »
Rice land in our area non-irrigated is selling for around 200,000 hectare if road access add 50,000 more.

Make sure he has clear title no tax receipts.

Go to court house to see if there are any liens against it looks like the bank already has a loan against the property for 2 Million which I doubt as banks will not loan here on bare farm land

Also Remember Filipinos can only own and transfer 5 hectares of farm land if its over this he will not be able to pass title to you so also visit the local Land Reform Office

If he is over his allocation the Land Reform Office will take it from him and awarded to landless farmers. If does goes to Land Reform you will only be able to own 3 Hectares and you must prove you farm it for 7 years then they will then give you a title for it

If you still go ahead remember your going to have to pay money to plant the rice / thats 3 crops a year and more investment opportunity for you

Chances are its a bogus deal with pay offs from him to your wife relatives

I suggest you stay away its a Tar Baby for sure


Offline piozam13

  • Sr Member +
  • Sr Member
  • ****
  • Posts: 185
Re: Pawn Rice Farm
« Reply #6 on: November 24, 2016, 03:33:35 AM »
even if  Php800,000 is a good deal, i do not see how you can make a profit or get your money back.  save yourself losses and disappointments!  invest elsewhere!

Offline Hestecrefter

  • Sr Member +
  • Sr Member
  • ****
  • Posts: 193
Re: Pawn Rice Farm
« Reply #7 on: November 24, 2016, 07:28:23 AM »
Hello, first time posting here. My wife is from the Philippines and we currently live in Hong Kong. Someone approached my wife's father about wanting to pawn his farm. He said that if he sold the farm to the Bank outright that he would get 2 million pesos. He wants to pawn the farm to us for 800,000 Pesos.

And just why, pray tell, would he "pawn" the farm to (apparently) complete strangers for P800,000 if he can sell it right now for P2 million?  Makes no sense.  Also makes no sense that a bank would be a buyer.  I don't know of many banks that are in the business of farming.

Offline robob23

  • New Member
  • *
  • Posts: 2
Re: Pawn Rice Farm
« Reply #8 on: November 24, 2016, 01:11:51 PM »
Lots of good information. Thanks guys! I will likely steer clear of this deal since I do not have the money to throw away.

Offline lost_in_samoa

  • Sr Member +
  • Sr Member
  • ****
  • Posts: 153
Re: Pawn Rice Farm
« Reply #9 on: November 25, 2016, 08:55:42 AM »
money to throw away.

Just wait until the guys with a Yamashita map come by.  Now there is a real investment!  {/sarc off}

Offline David690

  • Sr Member
  • ***
  • Posts: 103
Re: Pawn Rice Farm
« Reply #10 on: January 12, 2017, 06:46:00 PM »
You cannot always apply the norms of the western world when living in a foreign country.  Things often work in a different way to what we are used to.
Land pawning is quite common in Philipinnes.  It is alternatively referred to as a usufruct mortgage.

It is not the land ownership that is being pawned, rather the cultivation rights, for a fixed period for a fixed sum without interest.
You didn't post any details of the land, location, area etc so no way to know whether this would be a potentially profitable investment, but it is not necessarily a scam.  Having said that PHP800,000 sounds very high.

If you register the pawn with the burangay captain you should have some level of security, so long as it is in your wife's name, not yours.
Londoner at heart

Offline piozam13

  • Sr Member +
  • Sr Member
  • ****
  • Posts: 185
Re: Pawn Rice Farm
« Reply #11 on: January 13, 2017, 02:57:32 AM »
You cannot always apply the norms of the western world when living in a foreign country.  Things often work in a different way to what we are used to.
Land pawning is quite common in Philipinnes.  It is alternatively referred to as a usufruct mortgage.

It is not the land ownership that is being pawned, rather the cultivation rights, for a fixed period for a fixed sum without interest.
You didn't post any details of the land, location, area etc so no way to know whether this would be a potentially profitable investment, but it is not necessarily a scam.  Having said that PHP800,000 sounds very h
Just wait until the guys with a Yamashita map come by.  Now there is a real investment!  {/sarc off}

you are right - land pawning is a common practice in rural areas - in farmlands where there are no big commercial corporations farming.
however, you have to be there to cultivate yourself.  otherwise, you'll get someone to manage it for you.  there lies the problem. 


Edit by Steve: Fixed quote.
« Last Edit: January 13, 2017, 07:05:04 PM by Steve & Myrlita »

Offline trevor

  • Sr Member
  • ***
  • Posts: 172
Re: Pawn Rice Farm
« Reply #12 on: January 13, 2017, 01:43:50 PM »
Living here for over eight years now and this is the way i understand land pawning. They pawn mostly rice fields in my area.. The owner of the land would borrow money and use the land as a collateral. That is the owner would sign over the use of the land to the lender. There would be a legal contract and that is done with the help of the local Barangay official. At the end of the contract the owner is suppose to repay the loan and take back his/her land. The lender can keep the land for as long as the loan is not paid back. We have been approached many times to do this sort of deals but i told the wife i did not come here to do farming. This maybe what the poster is referring to but did not post all the details.
Never look down on anyone and always extend a helping hand. Tomorrow the role may be reverse.
Life is what you make it. Nothing to do with luck.

 


bisaya, cebuano, cebuano lessons, bisaya lessons
Romantic Tagalog