Apex Property Investment

2019 - a year of changes

2019-10-18T18:12:00.001-07:00

A lot has happened in the past few months, I sold my HDB, pattaya property was sold too and getting into the private market...

To Upgrade from HDB or Not

2019-10-18T18:10:00.001-07:00

To upgrade or not, that seems to be a question on everyone's mind. What are the guidelines that help to shape the decision making process?

I spoke to a few "near retired" people, "the ones with the most money amongst them are those that stayed in HDB and not buying any properties..."

That makes a lot of sense from the perspective of cashflow.

1. CPF gives you 2.5% compounded interest.
2. Property has VERY high transaction and maintenance cost.
3. The power of leverage works for flippers and a rapidly rising market.
4. Beyond a certain period of holding, there would be no advantage and the buyer would be worse off.

Control :

5. HDB vs Private. With the clarification from the Govt that most hdb would not enjoy SERS, HDB's values would not be able to rise as in the past anymore. It is no longer an investment.

I let go of my HDB yielding 6% in Oct 2019. HDB is approaching 38 years old. There would be little resale value left. I think even when the cash is put into CPF, compounding at 2.5% per annum, over 10 years, would beat the returns of a depreciating HDB.

A Landed Property at last

2018-09-18T07:07:00.002-07:00

As the year ended in 2018, the final buying was for the landed property in Sunway Iskandar.

It was a tough battle between a fukuoka apartment that cost $35k for a nett 6% return and a leveraged 85% landed property in neighbouring iskandar malaysia. Earlier I have written-off Iskandar Malaysia as an investment spot due to the large uncertainty and oversupply of high-rise in the development. Nearby, Prima Nusajaya faced some issues with developers not building and handing over the house in time, causing huge distress to the buyers.

Fast forward, Sunway has entered Iskandar with great concepts and completing Citrine Hub, the township seems to be on its way to becoming a hub for locals to come to shop. The hub is also accessible by causeway link to Singapore and Bukit Indah, making sure connectivity is not compromised, a sure recipe to success.

We stayed in Taman Sutera and the vibe was great with lots of young people, but the grab drivers that we hired hardly know about medini / iskandar, but they know Sunway.

This year I bought the Landed Superlink Terrace. A landed at last. This link house is the cheapest estate in medini. For the price of a 3 bedroom condo, you get a landed linked house that comes with Sunway Security. I think, this is a property which has limited downside.

This is for own stay, as well as it would appeal to students and family and faculty of Sunway International School.

A review of the properties that I'm eyeing

2018-03-13T05:05:00.000-07:00

This post documents the review of the

Cashew Heights :
Investment
Living Layout etc
Transport / Amenities
Overall

Cashew Heights is a 500+ condo unit with all big sizes ranging from 1200 - 1600+ sqft. The estate is huge with sheltered carparks etc.

Investment quality :
Rental : Cashew heights is much sought after by expats and locals due to its unique offering of huge space and compound. Rental price is weak, less than 2% yield and the units are old to hold up the price. Competing with Dairy Farm and other alternatives in the region is a challenge. The opening of German European School nearby could improve the market.

Capital growth : Cashew heights was built in 1986 and as its a 999 leasehold, there was no issue of depreciated assets. Cashew MRT opened nearby and there are new developments in the school, a potential town centre at Dairy Farm / Petir Road. Things are looking good. The estate's plot ratio is 2.1 and is looking towards URA revising the plot ratio.

Living Layout :
Conversion quality :Some of the owners converted the split level living room to a office and the rooms and rent other areas out. The maid's room can be rented as a studio. The conversion quality to improve yield is not great. The giantic living / dining area are sufficient.
Living : With the abundance of windows, laying out furnishing is a challenge. The living layout sucks.

Transport and Amenities :
The location is 500m from Cashew MRT and a 1 stop to Bukit Panjang MRT. Transport is not great. Food and other amenities are ok. Schools around here are Bukit Panjang Pri, CHIJ. If you have a baby girl, there is no need to get this address for entry to CHIJ. For Bukit Panjang, its a gamble as its a popular school.

Overall :
Price is running too far from yield. Buy for own stay only if Rent < Interest and Maintenance. Use the money to invest in other higher growth / yielding assets.

2018 - Financial position

2018-02-14T15:26:00.000-08:00

The year 2017 ended with no property purchase again due to lack of funds and lack of good buys. I started investing in a few startups ran by good friends from KL. I have absolutely no idea what is going on with the company except that the guys running it are good businessman. I invested in the CEO and not the business.

The year 2018 started well. I decided to move to a Condo and urge E to move in as well. Renting out my HDB immediately upon moving out save me some headache, albeit to a family of bengalis. I decided to do so as the estate is upgrading toilets and its a huge mess. I better stay out during this period. I rented the place out for 1.6k

I rented a Condo at Cashew Heights for 2.3k per month. A good deal maybe... after moving in most of the stuffs, the place is kinda difficult to fit. The layout is weird and not meant to be designed for modern TV centric usage, otherwise, the space is quite good. Bought some high-end fridge and TV for the missus. I urge her to rent out her place as well. Fully furnished, should fetch her good 2k per month.

All in, 1.6 + 2 = 3.6k and deducting the rental of 2.3k, nett - 1.3k, gives us a comfortable cashflow to stay at the condo with full facilities and childcare, utilities and food.

The next purchase gotta wait... at least 2 years while mustering enough bullets to bite at the Singapore market for the "required" own place. Haiz... whats wrong with renting when the landlord gives you all the freedom to make changes / renovations. I just felt heartpain paying for the upgrades.

2017 - Financial Position

2017-01-11T14:52:00.000-08:00

All too often we met with financial advisor who is only keen to sell you a dream / vision of retiring with a nest egg of a dreamy number, asking you to make the savings to the oft 30 years investment plan. I too was sold on this and even considered laddering the investment. After reading multiple books on financial education, I find this approach to be totally a waste of time. Case in point, my personal endowment programme enrolled in 1998, having paid monthly for the last 20 years netted me a yield of 0.5% per annum. Well, that is for protection, I argued, but does it really make sense to put your money into such a programme for 30 years?

My approach is to develop a passive income stream, with the tenants paying me my living expenses. I'm not concern about capital growth. Treat these investments like small business. No, annuity plans sound stupid! annuity is like paying someone a lump sum of money and having him pay you in batches, installments. You can do that with some financial discipline.

Based on the past 6 years or so of investment and planning, this graph shows my cashflow for the next eternity. The assumption is of course based on 100% occupancy rates, constant interest rates, constant expenses. By age 65, all mortgages are fully paid up (by tenancy). Working for the next 5 years, this is the achievable. (totally not withstanding any capital growth that might occur or not). Spreading the risks would be multiple properties spread over a few geographical areas and a war chest to be accumulated to tide over 6-12 months.

5 years to go is counting down now.

Sell or Keep - aging HDB

2016-11-12T19:50:00.002-08:00

The concept of retirement for me would be cashflow; passive cashflow covering expenses. Ideally, I would want to buy more properties in Singapore. Cooling measures in Singapore makes it difficult for me even if cashflow is wise, even with both properties, I can still keep my mortgage servicing under 60% in adherence to the restriction of the TDSR.

My HDB bought under my name is 32 years old... it is aging. The neighbourhood is under going Neighbourhood Renewal Programme, which means money is spent to upgrade the estate. Since money is spent on the estate, it would be unlikely that this estate would be en-blocing soon.

I am faced with a dilemma, since I need a bigger space, I need a new space. The current HDB can give me good yield (gross ~ 9%, Nett Cash on Cash ~ 17%), how impressive can this yield be.

My total returns from rental for the next 60 years could yield > $1mil. However, the hdb is unlikely to rise in value anymore.

Going for a new Condo, I have to take on risks and may not get to retire at 45, the returns could be greater than >$1mil...

Decision time...

Update : Jan 17

There was no decision made after all. 2016 proved to be difficult times and I ended up with no new purchase. While windows closed for lending in australia, malaysia is bubbly, singapore restricted. Suffered some setback with decisions in Pattaya against my favour, an appeal is underway. Cambodia finally revealed its intention. Some losses to be expected.

Watching the Singapore Market Closely

2016-10-13T15:44:00.000-07:00

The recession is looming, time to upgrade due to personal circumstances. What can I get? I'm looking at district 9, 10, 21 for the psf price of a new condo in the suburbs. No questions asked. King Albert Park looks good, so does Garden Vista. This price is comparable to the newly launched price at Hillview Peak... Why not look at district 21? 10, 9.... update soon.

Finally a chance at Landed

2016-06-15T14:57:00.003-07:00

I had been looking for a chance to get a landed property to complete my collection. Why landed? Landed provides you with higher CG due to limited growth. There is now a chance to own a landed property for 20% rebate and 80% loan which effectively means no money down deal.

UEM sunrise is releasing the very popular horizon hills estate at Valley West Bumi Lots (converted to international lots) for 20% discount. The product is completed and ready to move it.

This is my chance of ownership. I reckon one can rent the property for RM 2500 at today's market which is SLOW and "hoping" to reap capital gains after 5 years. All in at cost of around RM 50k per year. Thats RM 250k for 5 years of holding. Which is possible to leave it in neglect or at very low rental rates.

Valley West in Horizon Hill is still very much DEEP in. This is not something Singaporeans are used to.

There are of course other options.

1. Verve suites @ KL south with 15% rebates and the cost of ownership is 5% (RM 53k) and rental could reach RM 2500 for a 2 bedder. nett outgoings would be around RM 2k per month. Total cost for holding for 5 years is 53K + 250K (303K) or 53k + 150k (203K)

Nearing completed.

2. Colony @ KLCC - near KLCC and with 13% rebates. The rental could be around 3k her month and nett outgoings would be 7% - RM 70K + holding cost is 150k (220k).

Completions 2020.

Colony is more definite in rental with the KLCC working population.

Decisions time to really expand my portfolio.

Progress Chart

2016-05-16T16:20:00.001-07:00

Sell out now or Wait

2016-05-13T15:02:00.001-07:00

The ability to raise funds is a important skill of the property investor. If you can at any one time raise hundred or thousands or get a bank to back you with one call, you are probably there. It allows you to swoop in for the best deal and be on top in every negotiation situation.

Maths Questions time readers.

I have the HDB, which is a potential cash cow, having purchase it for just over $300k 6 years back and still owe $80k nett. I could finish paying in 2-3 years if I go all out and pay with cash, which I don't wish to. As far as I'm concern, I would like use CPF to take care of the house mortgage.

I would want to sell the property to raise funds and leverage on another 2 private properties. Which I think even with ABSD and TDSR policy in place, I could still do so. In 3 years, I could refinance and take out further dough. I do feel HDB's policy is a bit limiting. If I could reverse time, I could go back in time and go private straight away.

I'm keeping the hdb for pure safety buffer. It had superior cashflow, low cost, low maintenance and at 30+years of age... ZERO growth left. I wonder... if it would be be better off cut the hdb and go for private today.

The risk is present in the private market, loads of over supply and condos fetching less than 2% yield for some. I do not want to be caught out in a low cashflow situation.

Between cashflow and capital growth, which would you choose?

I want to go back to basic again. I raise my game through cashflow and not on capital gains. I know if the game plan is adhered to, I would be retired comfortably in 6 years. My target.

ie, 1 fully paid HDB, - rented out for further cashflow, a few properties overseas which would be reaping some equity growth, able to retire with 3-4k nett rental per month

On the other hand, if the private sector path is successful, I would also be achieving the same rental per month and would have an asset under care that would grow in equity and value.

I do need to be more educated and bold to go forward and take the plunge. Check this blog out in 6 months. cheers!

Buying EC, Condos or otherwise... depends on your situation.

2016-02-06T16:52:00.003-08:00

2016, the progress of the investments are pretty slow CG wise. Cashflow wise, was doing well til the hotels hit a snag with bad management. Oh well, lets ride this through.

Coming nearer home, selling HDB for me becomes a real necessity to move forward, this means safety net will be compromised. But I can deliberate further. My other 2 friends would have a real need to move and its time to re-evaluate their options.

Discussing with E and L who are in the same position. E have to sell off her Pinnacle HDB to set up a new family with her daughter. This means she will have several options; with her salary at $4200 gross per month, there is not much that she can do, lets review the options here.

BTO HDB

This is the cheapest Option, 3 years of build and 5 years of MOP plus all the other restrictions. Typical 4 bedder would be around 300k. She will need to pay resale levy - $20k and renovations $30-$40k.

This means a out of pocket $70 easily. Her loan will be within her 30% (just covered by CPF)

In addition, she have to rent for 3 years before moving in.. additional ~$70k.

Resale HDB

Resale HDB is a good Option as well. Better than BTO in my opinion.

HDBs price in the next few years will be stagnant and it might not be a good idea to invest in one.

Buying a EC will be full of restrictions like the BTO Flat as well. With her affordability level she can get a 1+1 room. Hardly enough room. The advantage would be after 5 years. She saves on renovations. She may have to pay resale levy. Out of pocket $20k and factor in rental and maintenance charges. This one she will be stretched.

Normal Condo

She can get a normal condo after evaluating her for TDSR she can afford something in the range of $798k. This is great. she can easily get a renovated 2 bedder near a mrt and keep enough cash buffer to last min 5 years. If things goes awry after 5 years, she can still extract equity to tide through the challenges.

A normal condo would be my recommendation to her.

L on the other hand just sold her private, she is staying with her MIL and there is no huge issue on renting. She don't qualify for BTOs and ECs, and this narrows her options to resale HDB and normal condos. Given her situation, they are not doing too well in their business, no cars, 2 kids, average income 3k plus minus plus a bit of buffer from their sale of the condo. In my heart, I think a resale HDB would suit her best. Til she build up her cashflow, she had wanted to buy 2 Condos and rent one out or buy a bigger condo to remake into a dual key. That was textbook solution but it would be hard to do in real world.

Both of them, schools are important, hence, it would be important to buy something near schools and near amenities to make living easier.

Full Speed Ahead - 2016

2015-12-31T16:06:00.001-08:00

End Goal.

Journey

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.

Cash

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.

2016
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.

An advice from Investment moat

2015-12-28T13:14:00.000-08:00

http://www.investmentmoats.com/wealth-building-2/my-advice-to-the-20-something-on-the-path-to-financial-independence/

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.

Hiccups along the way

2015-11-26T06:09:00.001-08:00

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.

What is really important in Life?

2015-11-15T05:15:00.000-08:00

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...

Australia Properties Settling Woes - OTP

2015-10-08T04:53:00.004-07:00

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.

Cheers!

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.

Next Step - Developer

2015-09-23T18:26:00.000-07:00

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.

thanks!

Australia properties Settling Jitters

2015-09-19T16:45:00.001-07:00

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.

Price of Stocks Rise and Price of Stocks Falls

2015-08-28T17:12:00.000-07:00

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!

Where is Greece?

2015-08-13T07:38:00.001-07:00

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.

By Steve Goldstein

Published: Aug 13, 2015 8:47 a.m. ET

A drug call hopium

2015-08-13T03:32:00.002-07:00

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.

Dual Key Ready Layouts

2015-07-20T07:42:00.005-07:00

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

Original

Converted

Depreciating RM Currency - a boom for the leveraged investor

2015-06-22T03:58:00.000-07:00

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.

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

2015-06-20T19:26:00.001-07:00

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

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 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.

Epilogue:

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.

SOLD!!!

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.

Related Reading: How (and how not) to Buy a House