Thursday, 31 December 2015

Full Speed Ahead - 2016

End Goal.

My quest for financial freedom starts in 2007-8 where unit trust investment takes a huge chunk of the investment portfolio. Unit trust was the darling of the investment world, it gives you exposure to a basket of goods, managed by a professional. Well, that professional’s pay is from a percentage of your investment. So far, unit trusts have proven to lose money. 

I just spoke to David, a very lousy salesman and got him to admit that unit trust can’t do the trick for me. Well, I concurred, but since at the beginning, he was so sure and cocky about trading unit trust. I smiled. Though I lost some money, it affirms my knowledge and this is something that no one can take away from me. I seem not to have any luck in stocks which is one of the world’s largest gambling den. With people like David selling these products, it is no wonder, the stock market will always collapse, it is a matter of when.

Since 2008 financial crisis, stocks have more or less recovered to their historical high, it is now time to take stock again (pun not intended). The Federal Reserve office WILL raise rates soon and it means a strategy realignment. 

Now I’ve invested in a few properties, Malaysia running at 5.25% and Australia running at 5.25% as well, Malaysia having a downward spiraling currency and Australia at an all time low. Comparing the 2 I’ve lost 20% based on exchange rates for the Malaysian properties and I’ve hit AUD at its lowest. I can imagine MYR continue to fall and AUD continue to rise. Now I’ve some spare cash, where would I put them. AUD.

Reason 1 – AUD loans are in Offset Account – I can extract money anytime
Reason 2 – AUID are at it lowest rates to SGD – A potential upside.

For MYR, it is attractive if I have a 200k MYR, that would allow me to gain a Premier Status worldwide for some of the international bank like HSBC.

I’m on a growth phase, the only thing on my mind is to gather more bullets and gain more cash producing income streams.

Co-Assets are quite interesting to look at now since I’m looking at 12 months horizon and the returns from such – crowdsourced investment typically are in the region of 10% upwards and only requiring $5000 to start. For Co-Assets, the degree of control is also almost zero. This is what happened to my Thailand and Cambodia investment. Thailand’s case will be heard in February and Cambodia’s case, haiz…. Well, just need to submit documentation again. 

The other options are to put them in AUD offset account to reduce cost of holding. I’m weighing on this as namely, it is only a gain on paper. I’ve prepared for the properties to be negatively geared over 5 years and this would allow me to tap on equity gains. Putting them in MYR is not an option at this stage of life as MYR continues to erode and money put there can’t be taken out easily.

Aging Parents
I have not been giving my parents much money as they do not seem to know the value of money. I’ve taken the liberty to “starve” them of cash and invest in income streams that could feed them for life. I’ve yet to achieve that elusive dream as Thailand hits a snag – the income stream broke and its now in litigation and Cambodia hits a snag as well. Both are quite unstable. I’ve a HDB that still produces good money and I think its time to use these streams to give them a little money for however they want to spend. There have another 20 years left?

I’ve discussed with the old parents, now all my brothers are well on their way to getting a HDB, it’s a milestone which I do not need to worry anymore. In truth, I did not contribute a cent, I did in giving some advice where its needed.

Today is the first day of 2016, while there are a few hiccups along the way, the past 4.5 years was a good one, lets be grateful. 

I went all out in 2015 and in 2016, expect more. I'm negotiating a Malaysian property deal in Japan on the last day of 2015 whilst on holidays. It was here that I decided that Japan may not be the ideal place for me. Japan, to be exact, Tokyo had such low legislation standards in insulation, that houses need not be insulated at all... its bloody cold in the japanese house. This I conclude to have lower value to me. I saw a 20m2 parking lot going for 2.6 million yen though and it looks interesting.

Where should I go in 2016? 

1. I have leverage in Malaysia and should go for a Malaysian property with minimal out pay.
2. Continue to exchange for AUD while its low, economy is improving, regardless they say.
3. Look for development site in Aussie and build my own place.
4. Press for Pattaya property litigation results.
5. Press for Cassava Plot payment.
6. Press for payment for Zephydom
7. CoAssets?

Deals done without control is not wise. I'll look closely at CoAssets on what kind of deals it can bring me. 

Hmm, full year 2015 income? Nett income - Nil.

Monday, 28 December 2015

An advice from Investment moat

Pls read this advice from Investment Moat, he is kinda technical even for me, but its sound advice. We share similar concepts in living and investment journey, my only concern is I'm a higher risk taker and I don't need emergency funds, the funds are in the bank and one have to maintain absolutely clean records.

Thursday, 26 November 2015

Hiccups along the way

Recently just concluded the settling issues for 2 Australian properties. You can never imagine what happened. The bank officer sitting on the documents while knowing the settlement date is due. 

Alas, some penalties are paid. This is outrageous and I demand to have their ineptness reported to the authorities.

Meanwhile back to the 2 hotel rooms in Melaka. As I mentioned, I expected returns in excess of 10%. It is such a strategic location. It has a great team, now the returns has been astoundingly low. 200RM a room / month. Thats gross! pun intended! how could such a hotel be in such a good location attract only 30% occupancies and in July - no income. The hotel ran at a loss??!!! 

We are banding up ALL owners to counter propose how to run this. Even if we run as a Air BnB, I believe we could earn more. This is just terrible. We will feedback to the developers and they can kiss their future product sales goodbye!

Pattaya side got some news. The developer is expected to contest our court actions and we can see a good fight now. Every lawyer tells you they will win, we will see.

Meanwhile, this caps a year of 2015 with 4 properties handed over and running and one more property should have clarity soon.

Sunday, 15 November 2015

What is really important in Life?

Too often, we have romantic dreams about going to the 3rd World to help people in need...
Too often, we dream of leaving it all and stay in a out of this world place...
Too often, we dream of vacationing...
Too often, we dream of sacking our bosses...

But what have we done to make to make it a reality? 

June was a ex-colleague who dreamt of early retirement. Interestingly, she can. 

She had joined name with her mother and bought a fully paid HDB in Tiong Bahru. Lucky her I say, yet she told me of the tortures of staying with her mother and wished she would be staying on her own soon. I explained that it would not be in the best interest at her current financial status to stay out and incur more costs. She says she understands all the principles of early retirement and to create additional passive income to fund her retirement. That is very good! She left her cushy job 3 years back to seek her ventures outside civil service, only to return back, a lower salary point. I wonder... 

Sha would want to save enough to buy a Singapore condo for her additional income. To that I say, she would be likely working til 65 to do it. She is ok with the concept of working to 65. I mean, to pay 7% ABSD for 2nd property in Singapore? She would not consider putting that tax money into another property elsewhere, equally safe and produces more income and insists she would pay that 7% to the Government to own a 2nd property in Singapore. Well, her theory won't work for me unless its for own stay. Say a $1 million property, you have to pay 7% tax amounting to SGD 70,000. If you top up a little, you probably can get a decent student housing in Australia, returning 8% per annum, a little shy of $500 per month passive income. 

Others, I've met insists on partying and enjoying a 'lifestyle', spending a holiday or two abroad, claiming they were stressed out and requires a rest. I told them straight in the face, I'm too poor to do that, I just have to harden the fuck up and go through life's challenges straight on. I have a mission and the mission is to terminate my mission asap. The faster I do it, the better, I shall eat cardboard, stay at home and not over spend a single cent til my mission is over. Thereafter, my tenants shall pay for all my vacations, employ my team of lawyers, brokers, agents, etc to manage my properties and then I shall go and do what I want to do... 

Thursday, 8 October 2015

Australia Properties Settling Woes - OTP

Murphy is ever present and when Murphy strikes twice, the pocket bleed. Recently, the valuations for 2 properties which are about to settle came in really bad - like 12% off!!! 

What the? 

Update 17/10/2015 - 

Cornerstone got 80% loan with ANZ and is on its way to be settled. 
Carnegie got to $375 after pressing the valuer. 

Lesson learnt is do not despair, there will be a valuer who will value the property at the right price. The only issue is a lot of such lenders do not operate for foreigners.

Update 25/10/2015 -

Cornerstone settled. Well I have to call Netbanking ANZ for link up on monday.

Will be expecting approval for Carnegie on 26th October.


Update 15/11/2015 -

Cornerstone settled and rented for 5% yield with 2 weeks of vacancies, albeit for 6 months term. Professional photography was done and the developers love them so much, they paid for the photos and I get free photos for publicity. The other unit competing units rented out 2-3 weeks after mine. Similar properties could be had at the next stage, don't miss it!

Continuing the OTP woes, ANZ changed its policy of not granting loans to units smaller than 50sqm and hence, I have to fork out extra $20k for NAB's offer. Carnegie was rented out for 4.3% yield for 24 months before settlement.

All is good. Pending settlement from developer. Fridcorp takes care of their buyers.

Both developers were highly recommended, Consolidated Properties and Fridcorp.

Wednesday, 23 September 2015

Next Step - Developer

There are just so many branches in property business. As a investor, there are already tonnes of information to digest, the ultimate aim of property business is to develop raw land and add value to it and finally able to market this to other people. 

May I suggest the following levels of investing which I have taken.

a. Principal place of residence - subsidised housing
b. Single bedroom Apartment in City Centre - done
c. Hotel Suites in holiday destination - done
d. Single bedroom Apartment in sought after suburb - done
e. 4 Bedroom Townhouse in growing suburb - done
f. What's next?

As you can see, I set a path of stability for myself. Investments are measured with income generation as the key considerations and rentability as the end result. Apartment in city centre would be high sought after by working professionals needing a place to stay during their attachment. It will not have high capital growth - for sure, unless the city grows in tandem. In fact, it will have oversupply issue. Again, its managed risk. If you are able to ride it out with lower rent, you will manage well. Hotel suites are a huge cashflow for operators, why would it do different for owner occupiers. If the price is right, you are able to rent out lower. Again, capital growth is limited. I'm happy with 2-3% gross anaemic growth for very little down payment. They kept me grounded with cashflow til my next purchases. 

Single bedroom in a sought after suburb is bit risky but as the price is out of reach of many, a well designed layout could do better than a 2 bedroom. Again, if I have a choice, a 2 bedroom apartment would be better for a suburb location. 

4 Bedroom Townhouse in growing suburb is the highest risk in my limited exposure to property. Its the most expensive of all and its tenancy depends on growing family. I'm a grand old age of 5.5 years old in property business. This, I'm going for capital growth. This might appeal to owners occupiers market. 

I've always maintained that I would not sell any properties and allow them to grow and support further investment. I've also shared over 3 years, the single bedroom city centre apartment has grown but policy changes in that country does not allow for withdrawal yet due to the changes in LVR. I'm happy it has achieved enough capital growth to cover my initial outgoings. Should I be able to take money out next year, I would have nett zero down with just monthly outgoing fees. Consider it as long term loan at favourable rate. 

Hotel suites have just completed. It did not do so well. I expect it to do better in the next few months as it gain traction. Should it bombed.... I might as well do Air BnB in that sought after location for tourist. 

Patiently awaiting results from australia for the other 2.

Next up... the ultimate dream - to develop my own apartments; but firstly, I have to learn to do duplex or triplex. If there are any resources out there, please point out to me.


Saturday, 19 September 2015

Australia properties Settling Jitters

Come next month, 2 project would be settling soon. 2 Morton Avenue and Cornerstone Living (valuation 24th Sept).

Cornerstone living is part of the massive 600million regeneration project @ Coopers Plains. The concept for this investment is to buy in early at the early stages of a multi-stage - 10 years regeneration programme, the idea is later stages will definitely cost more and hence it is a sure guaranteed way of capital appreciation (IF market condition holds). Still with the macro environment changing and APRA changing the loan landscape, it still sends me some jitters as I await the valuation report next week. I've also asked to see the next few stages from the agents and he has assured that valuation is no problem for the project. 

2 Morton has also come back with good results (albeit from the agents as well) this means a jittery 1 more month to go and I've got all my 2nd tranche of deposit ready. Morton Avenue project is a strategy to buy within amenities and next to railway station and near Campuses, it should do well with rental. 

I am on an expansionary phase and would not take any chances at all. 

Waiting is horrible. 

Friday, 28 August 2015

Price of Stocks Rise and Price of Stocks Falls

The recent slump of stocks have me rolling on the floor laughing. The fifth person have an article written on this. It was also quite fun seeing friends' post, that they have gone sick from the falling stock prices. Today, stocks have almost recovered from their earlier week fall. So what really happened? Absolutely nothing! 

Here, in Apexproperty, we believe in assets where you have full control and at least, you have control over its price to sell, its cash dividend you want, only then... its an investment, only then its a business. When you buy into a stock, say Starhub, yes, its a fantastic cashflow company with its own economic moats and all but when it comes to controlling the business when it goes down, say you have a brilliant idea to improve revenue, can you? Also, when the management wants to do something, i.e., issue rights, can you?

If you look at great blue chip companies such as telcos, and you say, hey, the NAV, the Valuation and the cashflow is such and such, therefore the investors are willing to trade security with lower yield and lower growth, which is fine. If you look at property as a business, you will find similar valuations and similar yield points. So, I would rate such 'small business' of a buy to let property to a huge business such as telcos with the exception, I have full control. I have no fear of stocks rise and stocks fall. (experienced investors, sorry, I don't mean you, you would continue to accumulate and while I can't)

Without subjecting myself to the market whims and fancy, I definitely sleep better and was having so much fun reading "predictions" from economists. 

Hey, fear sells... and stock market is a casino. Cheers!

Thursday, 13 August 2015

Where is Greece?

Market watch published an article on the 13th Aug which showed the world map by market capitalisation. 

Imagine how we used to be spooked by some place called Greece? Lets see if you can find Greece in the map. I can't. I also won't be bothered. When Greece disappears from the financial world map, nobody would even notice Greece has gone. I am certainly not bothered by the Greece Contagion. In fact, when Greece contagion came on, I was happy to see the stock price fall. This means the price is undervalued. Happy investing. 

When Iceland went bankrupt, no one actually cares. So today when China devalues the currency, what do you think will happen compared to when Malaysia devalues the currency? 

Understand the world market, which are the countries that will dent the world economy? when market misjudge, go in hard and make a killing.

A drug call hopium

I never believe in HOPE. What is it about hope that people hang on to and yet do not want to do anything about it? 

I've met many people who wished they can quit their job, retire comfortably, go on vacation, go volunteer at 3rd world, doing some good, yet when I ask them, how do they do it? they don't know. They just hope. Hooked on Hopium.

I think I've been able to influence some people as I spoke to Colin and Jon today. They are "suffering" from a disease called "flat account". In fact they had started to buy property and are saving every single penny for this purpose. Just like brave heart's rousing speech in front of the people of Scotland as they formed up to fight for freedom... "for freedom!". We too have sacrifices to be made in order to make that transition from current state to the state that you want. Do not get hooked on Hopium. People who are hooked on Hopium takes huge risk in not helping themselves, not saving, not investing and best of ALL... not educating themselves. 

Yes, taking he first step in investing is scary. It is a world full of scams and everyone you spoke to seems to be a scam artist. Keeping the money in the tin under the bed seems to be the safest; tuck yourself under the pillow and inhale Hopium away.... because its so scary outside. I fear for you. Your actions scare me. 

I met Minting, I think thats her name. She had the same mindset as me! fantastic! I think she will be a good investor. She had already worked on her balance transfer. I shared more with her so she may have a bigger market to play with. We discussed investment tips and who are the best investment guru. As I shared with her, still I am grateful to Marco Robinson and the Wealth Revolution Group that I build my knowledge and mindset with and I'm still recommending people to take his course. Caveat Emptor with any investment decision.

Monday, 20 July 2015

Dual Key Ready Layouts

I just discovered a complete makeover of some condo units that are able to covert to dual key and this blog post aims to keep track of such units for future reference. 

1. Northavale - CCK - 3 bedroom unit conversion
    Taken from this blog  




Monday, 22 June 2015

Depreciating RM Currency - a boom for the leveraged investor

Generally, l advocate leveraging to get better returns. In the case of Malaysia property, I am so far able to get 90%, 80% and 70% loan. I am happy the currency falls as it meant my debts are lower vis-a-vis the falling of my equity. That is of course provided that the property price don't fall. When a currency falls without a fall in the economy, generally it will bring about imported inflation and hence the price of assets will rise. 

Eg, a RM1,000,000 
with a depreciation of 10% in currency, if you had put in 20% downpayment, it means you lose 2% of the asset value - RM20,000 in value. At this point in time, if you sell your asset, you lose RM20,000. However, taking a long term view, if the currency falls, generally asset price increases due to inflation. Say a 10% increase to RM1,100,000 This would counter the inflation. You loan remains 80% of which is RM800,000, your asset would have brought you gains of RM100,000 vs your deposit of RM200,000. This will offset any loss in depreciation of currency.

When in doubt, consult the spreadsheet.

Saturday, 20 June 2015

How to sell a house? a article shared from Mr Money Moustache

Mr Moneymoustache blogs about a frugal living and living with a purpose, I've read his retirement story at age 28 and have been an ardent follower since. Well he had retired from work but had not retired from working. You see, Mr Money Moustache loves his life and not his bosses lives, after he made enough to sustain him, he worked for himself, doing the things he loved and doing them with passion. He had spent enjoyed quality family time without going to the restaurants, movies, or spend huge money on holidays. Enjoy the article.

How to Sell a House

In the making since 2007
An event in the making since 2007
This is kind of a special moment for me. Since the year 2007, which is eight years ago or 20 percent of my time alive on this Earth, I have been stuck with a less-than-ideal real estate situation. And it is just about to be resolved with the happy CHA-CHING! of a cash register.
To make the long story short, my old house building company created a fancy, modern house just in time for the late-2000s housing crash. After two years of listing it for sale and dropping the price, I took it off the market. Instead of selling it into the void at 50% off, I put it on the backburner as a rental house. Since then, it has generated generous monthly checks in exchange for a low level of background stress in my life.
Finally, our local real estate market has recovered fully and the time has come to put this place on the market, and so that is where our story begins today.
And it’s not just my story – selling a house is a big deal for many people. It can be a stressful event, or a looming unknown for those who have never done it before. This fear keeps people stuck in one place while commuting to another, or locked up on top of a million dollars of equity, when they could easily use that money to retire young and live somewhere else.
Loosening up your feelings about selling a house can provide a surprisingly big life boost. As a side benefit, knowing how to do it well will add money to your life while subtracting stress.
With my habit of renovating houses and moving around a little plus a wife who is a licensed real estate agent, I’ve been through a few more house transactions than average. But my Honey Badger tendencies have gotten me stung plenty of times, so I have seen the cruel side of the real estate market just as much as the generous. Because of this history, I figured it would be worth peeking in on my current house-selling adventures as an example.
What Selling Means
At the core, when you sell something you are becoming a salesperson. This means finding out who your customers are and what they want, then figuring out how to make your product appeal to them. You can pretend this is not true, and in a hot enough market you may even get away with it, but in general you tend to get walked over if you ignore the realities of your customers.
Knowing Your Customer
When I bought and renovated my first house at age 25, I saw things only through my own narrow lens. I was an engineer, so of course I assumed that advanced network wiring to every room would be valuable to everyone. I was young and fit and had no children, so of course we didn’t need three bedrooms on the main floor, or guardrails to protect the basement staircase.
Eventually, I applied this self-centered vision to my housebuilding company in 2005 and built something the market did not value as much as I had hoped. I liked modern, open houses which worship the Sun. Big windows. Exposed structural beams. Welded steel. Stone tile that goes all the way to the ceiling. While I shared this housing taste with Dwell Magazine and Los Angeles thirtysomethings, it turned out that my customers at the time were non-coastal people two decades older than me, looking for traditional Victorian-themed homes with enough bedrooms for their kids. They didn’t care at all about how many square feet of South-facing glass a house contained.
Similarly, if you’ve lived in your house for a long time and are getting ready to sell it, you might find that the people moving into your neighborhood are a different crowd than those moving out. Blue carpet and flowery country-style wallpaper were homey touches in 1982, but have become quite destructive to resale value here in 2015.
The bottom line is that your house will sell better if it matches the desires of your ideal customer. A full decade later, people my age (who I find more likely to have similar tastes) can finally afford houses like the ones I built, which means the local market finally likes the same things I do. At last, we pass the Customer Test.
Becoming One With Your Local Housing Market
Almost ten years ago, I signed up for an automated email system that alerts me of every house listing and every sale that takes place in my neighborhood. Although I would not recommend this for people not interested in real estate, it has been fascinating to me. Over time, you develop a deep intution for spotting deals and ripoffs at the moment of listing, which you can refine by watching how quickly or slowly each house sells. Then when it comes time to sell your own house, you know exactly how to price it to hit the fine line of maximum profit.
In the case of the rental house I’m selling right now, similar homes were selling in the $550k-$600k range, so I set my price at $565,000.
Preparation for Sale
House buyers are in an amazing situation: they are making a spectacularly expensive purchase after only 30-60 minutes of touring the product. This means that they operate based on first impressions and rapid evaluation of the spaces. And thus your house needs to hold up well to this type of evaluation. It’s worth reading a whole book on this, but to summarize quickly:
  • Think Open and Airy: When buyers walk in, they need to be confronted with light, space, and charm. So eliminate anything that blocks this feeling – open the curtains, clean the windows, and remove stuff like baby gates or pet crates.
  • Renovations: In higher-end markets, strategic renovations including a modern kitchen, knocking out unnecessary interior walls, and (oddly enough) a great front door will return more than 100% of the cost in eventual resale. The key is in watching that cost: even hiring out all the work, a new kitchen with good cabinets, stone countertops and quality fixtures should total under $25,000 rather than the $75,000 many people end up forking over.
  • Stage the House: If it’s empty, hire a staging company. If you still live there, remove most of your stuff and have only sparse, tasteful decor. Selected artwork, a nice table arrangement with flowers, the perfect books on the shelves, and so on. Buyers will claim that they can look past a mess, but it just isn’t true. The well-staged houses get statistically higher and faster offers, which makes it a profitable choice – especially in higher priced markets. I spent about $1600 to hire Design Matters Home, which covered design plus all the furniture rental and moving.
  • Photography: this is critical, cheap, and yet usually overlooked. How many real estate listings feature blurry, dim pictures of the corners of rooms taken by the listing agent running around with an iPhone for a few minutes? To do it right, you need an SLR camera with a tripod and roughly a 10-22mm wide angle lens. Or hire an affordable pro – I was able to get a great real estate photographerto shoot my house, plus process and deliver about 50 digital images for under $100. Money well spent (and thanks Josh!)
    Let’s compare the effect of lackuster versus professional photography with a real-world example.
Figure 1: These are the actual pictures from a recent $425,000 listing in my area. Four hastily-taken pictures. Seriously?
Figure 1: These are the actual pictures from a recent $425,000 listing in my area. Four hastily-taken pictures. Seriously?

Figure 2: Since the system allows up to 25 pictures, I provided 25. Each with a full text description (most real estate agents leave the description field blank).
Hire an Agent or Sell it Yourself?
Even Mrs. Money Mustache (an accredited agent herself) admits that there is no special difficultly involved in what real estate agents do. While there are surely some brilliant, talented and hardworking people in the field, the hard truth is that only a minority of the agents either of us have met would fit this description. Besides, the real work is making the product great and getting it in front of buyers. In the US, this means getting your property listed in the MLS (multiple listings system). Although it is an antiquated and proprietary system, it is still where most buyers are shopping so you need to be in it to win it.
Suggestion: hire an intelligent and dynamic agent if you can find one and are not interested in doing the work yourself. Otherwise, hire a discount fee-for-services agent, or just put your place on Craigslist and then pay separately to get it into the MLS.
Most of your buyers, unfortunately, will still be shopping with a buyer’s agent, so you should expect to fork over 2.8% of your purchase price to pay his or her fee if you want access to that big pool of shoppers.
Showings, Offers and Negotiation:
Once you get the place listed, you are off to the races. Buyers will find it on the MLS system as well as Craigslist if you listed it there. They book appointments, review your hard work, and if you are lucky, make you an offer.
There will be negotiations, an inspection, and various deadlines and hurdles to clear, and the level of stress all depends on what type of market you are in: in a slow market, buyers might ask you to replace the whole furnace or roof, and walk away to the next deal if you don’t comply. In a fast one, you can safely reject anything silly and the buyers will tend to give in, lest they lose yet another house to other competitive buyers.
Pro Tip: Normally, buyers can make an offer at any time and you have 24 hours to respond. But if you write something like “All offers will be reviewed on Saturday July 11th at 12PM”, you can wait a week or so to collect multiple offers and respond to everyone at once. This increases your chance at having multiple options and creates competition between buyers, which increases your leverage in negotiations.
So Should you Do it?
Selling your house is always going to take some work, no matter how you approach it. But if you do the math right, it can be some of the highest paid work around, and come with great lessons in human nature as well. I have never regretted a sale and have many good memories (and dollars) to show for the hard work of the past.
At the same time, you should think about the work of eventually selling any house before buying it in the first place. If you’re not ready to devote a few weeks at some point in the future, and potentially absorb a 20% loss if you need to move in a down market, you should definitely consider renting instead.
I started writing this article a few weeks ago, as Mrs. MM and I were working through all of these steps ourselves. We were ready at last on June 9th, finishing the last details and getting everything uploaded into the system just before midnight.
Just after breakfast the next morning, the phone rang with an incoming number from a Hawaiian area code. Some new arrivals to Longmont had studied our listing in detail and were very excited to tour the house in person. We agreed on an appointment time of high noon on that same day.
I biked down to the house to meet the prospective buyers, and we immediately got along like old friends. The house tour was more of a celebration of our shared tastes in home design, and they were full of questions about how every detail had been designed and built.
Before leaving, they gave me a verbal, full-price offer with no buyer’s agent to suck money out from the middle of the deal. In other words, $565,000 with no funny business, heading directly to our investment account in just a few weeks. We shook hands and I thanked them for their wonderful interest and the offer.
Following the Pro Tip above, we left the place on the market for a full week, collecting two more solid offers – but nothing quite as good as that first offer, because cutting out a buyer’s agent made their offer effectively 2.8% higher (about $16,000). So we sealed the deal, the house is under contract, closing will be next month, and all is well.


I wish you even better luck than I’ve had in your own real estate adventures. Own the house you truly want to own, sell any that don’t fit that description, and prosper.

Pawn Broking Business - passive income stream

I have always wondered how pawnbrokers work. Yesterday I passed by a pawnbrokers and curiosity finally took the better of me and I went in just a wee bit to take a look at a notice. They are offering 1% interest. hmm... as a leverager, 1% is good deal! I went on to read the entire notice. "1% for the 1st month and 1.5% per month subsequently. Wow.... Thats 17.5% per annum for money lending with collateral! Thats day light robbery I say!

Apparently this is thriving in many countries, where people live salary to mouth. A slight delay would mean cashflow disaster. One such country to highlight recently was Korea where electronics products from students were being accepted as collateral for some quick cash. Electronics would not have any value to a pawnshop and normally they would not want such products however, it became a thriving business in Korea where students could get fast cash by pawning their phones, guitars and other electronics for a few days to weeks to solve their cashflow problem, until their parents give them their allowances.

As I know, the way to mitigate the depreciation of electronics is to grant shorter terms and lower the cash value granted. Say 50% of the products current value and only 3 months to fully redeem the product. 

As I learn about this 'daylight robbery' business, it intrigues me. This could be a long term passive income source.

Wednesday, 17 June 2015

Update on Seri Bukit Ceylon

Competition has heated up in the Bukit Ceylon Market with the completion of Laman Ceylon, 6 Ceylon, Verticas, Suasana, One Bukit Ceylon, plus the already competitive market. 

Seri Bukit Ceylon still sits in a more enviable position, that is coveted by tenants. A Best has taken over the apartments ran by Somerset. I stayed for 1 week with them. The price on the web is not bad at SGD 69++ for a 1 bedroom, 591 sqft unit. They are apparently running at a 90% occupancy rate.

My agent told me they would like to offer RM 2400 for my unit for 2 years. Which puts me in deficit per month for RM 900. This is not a good place to be for long, however, as I blogged earlier, the capital gains have been about 3-4% gross per year and this is low. I think as long as the rent covers interest, I'm ok to hold on for a while longer. The MRT is going to be up in 2 years and I would have hit my 5 year mark with only 5% CGT. 

So, this market, at this time, the KL city centre market is weak. Do watch for the 1MDB issues to be resolved and see RM sliding further. At this time of writing, it has gone down to RM2.821 RM and at the time of purchase, my exchange rate in 2012 was RM2.5, a >10% drop in exchange rate. 

Saturday, 23 May 2015

Financial Planning for your future - with certainty!

How many times have you encountered meeting a financial planner who told you you need an astronomical amount of money to retire or to be financial independent? I was not impressed with their calculations. Certainly there must be a better way. I searched high and low and studied for the past 5 years. Since the financial crisis, there was no way I'm going to leave my financial future only in the hands of the mutual fund managers, CEOs of companies, savings deposit. 

I believe everyone's plans and life circumstances are different. I've developed one for a young single person who aspires to own his own home and many other homes to come. In fact, I've amassed 7 in the span of 5 years and over a few countries like Singapore, Malaysia, Thailand and Australia. 

I've developed a financial plan that would guide me to financial independence, a plan that will give me rental income of $10,000 in time to come and I would like to extend this planning expertise to you for FREE. Having paid school fees and learning through real investing over several countries, I would like to see that what I have learnt and experienced could be useful to you to help you achieve your financial goal. What I'm good in is in orchestrating and maximising the use of money to achieve financial independence. This is definitely not a get rich quick scheme but would be useful to set you on the right footing so you can rest assured how much you would get in 10 years time. If you would like me to help in anyway, do feel free to contact me and leave your email below. 

I find the following article useful, for your Sunday reading pleasure.  

Monday, 4 May 2015

What to do when you have build up equity in your property?

In the blink of an eye, its been almost 5 years since I bought my 1st property. So how have they all performed? Lets take a look.

The HDB, have appreciated to ~$380k with outstanding loan of $200k. A net equity gain of $180k. Appreciation of 65k over 4 years. ~ 5% gross per annum. - About 70% ROI returns.

Seri Bukit Ceylon bought in 2012 has its valuation gone up to 1050 psf from 900 psf. Appreciation of ~ RM112k over 3 years. ~ 5.5% gross per annum. - About 100% ROI Returns. ~ 160% ROI returns.

Imperial Heritage Hotel has gone up to possibly1500psf from 1190psf. A figure to be verified. 

While 2 units of properties are in Australia waiting for settlement. 

Properties appreciates over time due to inflation or other factors. One should always manufacture equity with the passage of time. This equity gained can then be used to finance further investments to manufacture equity. 

For people buying HDB, if you can start with a private. You will earn more. For me? The HDB is a dud. There is no way I could release the equity without selling the property. One of the key reason why people should never ever buy resale Pinnacle@Duxton is however much equity your earn, it can never be released unless sold. 

In Malaysia, for me things are a little different. My properties have gained in value. There could be opportunities to release the equities. I called the banker, there is a way to release the equities, its called loan top up. In Singapore, we call it refinance. Either way, as long as it allows me to release equities, who cares?

Say, my margin of finance remains the same - 90%, I stand to release over RM100k of equity. Over time, my total investment inclusive of tax is about RM125k.

I have potential of getting RM100k back and only fork out nett - RM25k for this property at the end of 3rd year. How's that? If CG continues at the same rate, I could possibly have a no money down deal after a a few years. What is this you called? Its called printing money.

Say for Imperial heritage, with a high CG, from 1190 to 1500 - its a 25% rise. I could potentially have a no money down deal at this time. 

Well, I have to pay a higher monthly mortgage if I take out the money right? But, as long as I can service the loan, continue to take equity out and take on more leverage. 

I'm looking forward to property 8,9,10,11,12,13,14..... you get the point. 

Thursday, 30 April 2015

Working Capital

As in all businesses, properties generally don't make money from day 1. What do you do? You factor in Working Capital and let time do the work. You cost of ownership will rise but it will be well covered by capital growth over time.

The efficiency is an art and a well crafted piece of engineering.

Listen to the accountant - Chris Gray

We have all been conditioned to be poor by being the same.

To be different from others and retire rich, you need to relook your lifestyle. 

Chris Gray is one guy who gave up his job, his home and purely invest. Why? The numbers worked. The accountant in him figured what most people earned in their primary residence is more than what they earned in their lifetime. That revelations was verified by other accountants as well. The house is the main source of wealth. 

Listen to the accountant and see if it makes sense for you. It certainly did for me.

What event make you change?

Saturday, 18 April 2015

All that glitters is not Gold...

I just emerged from Gerry Robert's talk on entrepreneurship book publishing, publish a book and grow rich. He revealed many secrets / strategies that you can start to sell your book even before it is published. These are common strategies used by marketing teams to achieve results. Mind you, he is not frauding but creating confidence and desire to kick your own butt to get moving. You may not have the contents, but once you collected people's trust in you to put money in your hands, you WILL WRITE it and Deliver it.

This is not my biggest takeaway from the talk. The biggest take away is your mind is only as small or as big as you want it. If someone shares a big idea with you, don't fight it, internalise it and make it happen. I'm glad he opened my mind bigger in this 2 hours.

Well, he did offered his bootcamp for FREE and this is good. I have paid my dues with other gurus already and will not in the near future pay another one. I walked away. 

Thanks Gerry Roberts. I confirmed that books authors are no authority now. All that glitters is not gold but just a marketing tool for them.

Taking a Mortgage for Australian Properties, SGD or AUD?

In the next few months, I'll be making a decision to go AUD or SGD. Especially in rising SIBOR Rates and decreasing fixed rates in AUD. Lets first analyse the situation. 

Rule of taking loan in the country of origin.
1. Always take loan in the home country's currency as much as possible. 
- AUD win

Leverage power
2. AUD - 80%, SGD 75%
- AUD win

3. In Singapore, all loans originating from SGP will be subjected to TDSR, which means, there could be no more loan. SGD loans are still one of the cheapest loans around. Whilst, AUD is not subjected to TDSR. This secondary source of funds is very important to continued leverage and Capital growth.
- AUD win

Interest Rate
4. 2.5% - Sibor plus 1.4% spread. This is a variable rate which can rise to 5%. Whilst AUD gives a interest only 3.99% lowest spread now for a fixed 3 years. (AUD interest rates can go 9%). A 1.5% spread is good for insurance against rates rise. I'll take that.
- AUD win

Switch of funds
5. AUD is at all time low vs SGD, hence it would be a good opportunity to take advantage of the low exchange rate and switch funds when the time comes. If the rate changes 10% in the borrowers favour, based on 70% loan, the borrower earned 7% by switching. 
- SGD win

Given $200,000 start point and assuming all properties being $500,000. The AUD loan can buy 2 and the SGD loan can buy 1. Assuming Cap Growth to be the same - 5%, AUD borrower makes 2 x 5% of $500,000 - $50,000 and the SGD Borrower makes 5% of $500,000 - $25,000 per year.

Assuming forex moves 10%, the SGD borrower makes a nett 12% vs the 10% of the AUD borrower.

Assuming they both hold long... 5 years and each year the properties increase by 5% and for simplicity sake, they did not acquire more properties.

The AUD borrower would get (5x $50,000 per year) $250,000 and the SGD borrower assuming he makes the right decision and the exchange rate went back to normal. - he makes 30% on forex gains 30% * $105000 and (5 x $25,000) - $125,000 on cap growth, total of $230,000. The SGD borrower will probably have a greater cashflow of about (1.5% spread) ~$6000 (includes principal repayment) per year and for 5 years - $30,000. The total nett for the SGD borrower would come up to $260,000.

Thats a $10,000 difference in favour of the SGD borrower. - $2000 per year. Would that be good enough to offset forex risk and exposure to TDSR to take loan in SGD?

What do you say? 

Friday, 17 April 2015

Choosing to be poor... your choice.

With regards to the subject of money, people still view it with despise and taboo. I had a conversation with my colleague. I asked her if she could be retired if she gave up her car and then she could have $3k less to spend. She could be frugal and be retired and time rich!

She gave excuses, like she have 3 kids to provide, car is a necessity and blah blah blah... UNLIKE me who is single, blah blah blah. As I calculated for her, she simply shut down and refuse to engage anymore. 

Well... what can I say.

Saturday, 4 April 2015

Retirement Readiness

I visited Prof Wade Pfau's blog

This is a very interesting topic of research, retirement readiness, how ready are you?

Actaully, it is all about efficiency, once you have accumulated enough, you stop and sit back to relax. How then do you know how much do you require or are you so inefficient that you overworked?

I asked many financial planner, they always turned around and ask you is required, they as with their typical sales talk came back to ask you how much do you need. By the time they worked out the number, you find that by 100 years old, you still cannot retire. This cannot be right?

Mr Money Moustache retire when their portfolio hits $600,000 USD. My Singaporean friends found this number to be insufficient. Well, on what basis do you say you need more money and less time? 

Continue to research to understand how this calculation can be done and how much do you need. Live an efficient life and not having to be confined to working til 65. 

Wednesday, 1 April 2015

Do you have enough debt?

I don't sleep well if I don't have enough debt?

Why do I say that? The very basis of the investment mindset is to make your money work harder than you! If you have money which is not used isn't it losing its value by the seconds? Lets see, inflation decreases the value of money at around 4% a year. 

Personally, I subscribed to maximum leverage, dangerous some may say, as R. Kiyosaki says, dangerous is in the uneducated mind. Take Action and learn and be educated. When you are ready, you will feel that you may not have enough debts. 

Have fun investing.

Are you robbing your self poor?

"How could anyone possibly complain about having money problems, while simultaneously paying tens or hundreds of dollars per month to have passive video entertainment and commercials streamed into their house? People are simultaneously robbing themselves of money and the necessary mental quiet time that is a prerequisite to getting ahead – building skills, meeting people, getting better jobs or starting better businesses." 

- Mr Money Moustache.

Let's start from the very beginning. I had been a cadet pilot and in my course, there was a person whom have left such an impression on me, I have to always bring him up during my story telling. His name was "cookie monster", thats all I can remember of his name anyway. He always carries a tin of biscuits with him and munches all day long. Why? He had saved every single penny towards his impending marriage and not spend any money on canteen breaks. 

As a newly minted officer cadet drawing $1600 per month, who can resist not to spend a little on himself and indulge a little. I do not understand what this life is all about as I have no trusted mentor to guide me, but a life of decadence is something that feels wrong. Why do I need to be entertained? Needless to say, I quitted Radio and TVs and CDs as I feel it is something wrong.

A whole lot of my time is spent spending how to live life efficiently. Is working til 65 and retiring on the CPF savings the only way out? As I looked at the old retired personnel cleaning tables to get by living, I questioned why? but I decided that I will not be one of them.

Property is always a dream for me, alas, economic situation does not allow me to do so. I bided my time, I learn and I tried different means to grow that elusive deposit. I was swayed like most people to pursue my interest, spending money for enjoyment and going to restaurants. I ROBBED myself of the deposit.

2008, I woke up again from this mindless pursuits again. Wait, am I suppose to put away all my savings and HOPE to retire by 65? I saw retired officers having their 'pension' halved. I can't have this. I decided to change.

And as you know, I spent nights doing readings on theory, research and understanding why?

To change a mindset, WHY is the most important aspect to how and what. If you find your WHY, you will stop robbing yourself of the future and not live the "life" they say now. So start finding your WHY and start living your life and build the future you want.