5 years ago today...

I know I said 2013 may be the year I stop blogging, but this topic has been lingering for a while and I have nowhere else to share the story. With the kind of attention Facebook will attract, coupled with Twitter’s limitation, I guess I will just have to jot it down here and keep the blog alive for another year.

These days, many friends still think that I got lucky that I accumulated some (some, not a lot) properties in past five or six years before the market hit sky high these couple of years. Accumulate is a strong word though, I prefer to think that the bank owns still.

But I dislike the notion that people like to think that I got lucky.

Approximately five years ago, my wife (then girl-friend) decided to venture into our first joint-name property investment.

She just started work for about a year or so, and I was struggling to balance my bank book with the car loan and after completing a separate purchase a year before that.

Things didn’t look as rosy as people tend to paint them these days, but five years ago we were pretty much like any ordinary couples out there who were dreaming about having a small slice of the property pie in the market.

We had a small budget, around RM15,000 to RM20,000 in our savings. We spent very little back then to pamper ourselves; we seldom travel overseas, we drive simple cars, we ate simple meals, we almost never shop. We saved every penny to accumulate a decent sum which we thought was enough to make a bold move.

But even then RM20,000 was still a small figure back then. So we hunted for studio units, because studios are the only ones we can afford.

We spent nights after work, weekends and public holidays viewing houses or sometimes just drive around and sit in the car to study the demographic and community in the area we decided to purchase. We probably looked at about 50 over units before getting the right one (we sat down two years ago and counted, we have been to almost 100 new properties launches, excluding unit viewings!).

When we finally decided to sign on the dotted lines, the owner decided to raise the selling price.

We were pretty distraught then, and were contemplating whether to go ahead and figure out our financial plans later, or look for a different one and start all over. And throw six months worth of research down the drain.

Then we gather some information from the agents and found out there was a unit which the owner may have interest in letting go, but was never put up for sale. We pushed the agents to obtain the owner’s contact and tried to convince him in letting go, which he finally did after considering for a month or so.

We were elated, but the fairytale endings don’t end this early.

With our budget, having to pay off the 10% downpayment, coupled with the legal and loan fees we were pretty much broke. So we had to think of something.

And so we did. We asked the owner if we can jack up the selling price in the S&P in order for us to obtain a higher loan, which will cover a big portion of what we initially had to put in the downpayment.

It took him another few weeks to decide, but in the end he said yes (back then there were no RPGT yet).

And so the deal went on, and lasted for about half a year before the transaction was closed.

When we finally got the vacant unit, we knew we had to do something to it if we want to rent it out at a higher price compared to those listed at that moment, so we decided to rent a fully-furnished unit.

But we were down to like RM10,000 after saving some from the downpayment, and to change an empty unit into a fully-furnished unit with RM10,000 is a pretty tall order.

So we did what cheapskates would do: D-I-Y.

We bought the paints and painted the walls ourselves. We bought furniture on cheap deals, and transport them in our tiny little Kelisa. We spent the nights after work cleaning up the place and decorating it. And with a few hundred Ringgits left from our budget, we spent them on a wallpaper to cover one side of the wall and make the entire place looking chic.

And then we marketed it ourselves in hoping to save on the commission.

That part didn’t work though.

We spent several weeks, during night time and weekends bringing in prospects to view and in the end, it just didn’t happen. One lady viewer wanted to reserve the unit for a week for her to move from Kuantan, but ended up a dud when she refused to pick up calls after we blocked off several viewing appointments in the coming week.

So we finally brought in an agent, and told him to market it 20% higher than anything that’s in the market then (just to make up the commission over the course of the tenancy). I am not sure how things worked out differently, but he found a Japanese expatriate to move in after just two weeks, and surprising did not even negotiate for a lower rental!

Five years down the road, we have changed tenants twice, this third tenant being Japanese as well, and we are still getting the same rental over this period of time. Our Cash on Cash Return broke even some time in the third year (2012), and since then the unit has been generating positive cash flow for us, which in turn ended up in other investments.

And so that’s the story I wanted to let out from my chest all these while.

Maybe I am being too confident, but if I had to use a word that best describe the ordeals we went through five years ago, a few came into mind.

Determined? Diligent? Hardwork? Preseverance? Could be any of those.

But lucky? After all those that we've gone through?

I don’t know. You tell me.

where students go, real estate follows...

How true is the statement above from today's News Straits Times?

Well, no doubt, wherever the student population clusters, we tend to see a demand in amount of rental properties. And with that, certain types of real estate investors will venture into these markets and try to make some profit out of it. But are students good tenant prospects for long term?

On the positive side, one will almost need not worry about their property being left vacant for long. Even for a semester break, chances are you will hardly have the unit unoccupied for 3 months.

But reading the paper's statistic I somehow believe the figures are poorly compiled and it's somewhat misleading to generate a feel good factor to justify the articles published.

Well yes, it's not hard to find students who are willing to fork out RM1,100.00 monthly on rental alone, but does the author honestly think there are tons of these wealthy students across the country? Apparently a unit of 1500sf to 1600sf is worth between RM700,000.00 to RM800,000.00 and rentals can averagely fetch a cool RM4,000.00 to RM5,000.00 which makes the rental yielding a 7-8% return.

Either I'm detached from reality. Or the author is.

I was a student not too long ago, but surely inflation has not gone that bad.

Back in 2006, a corner unit of a double-storey terrace with over 2000sf was worth RM550,000.00 can only fetch RM1,500.00 in rental. I was one of those students renting at such price and I paid RM130.00 monthly in a household of 10.

We can barely find expats willing to pay rental over RM3,000.00 for fully furnished units these days and the author would like to make us believe there are groups of few students who're willing to pay much more.

And even if these students exist, 7-8% rental yield is very much, in most savvy investors' eyes, a very laughable return. None of my rented units yield as low as the figure given, and if anyone thinks that's a great deal then I'm secretly rejoicing for the lack of astute competitors.

Perhaps one will think I'm overreacting, but I will most definitely not (though I'll never say never) venture into students' market in this country, sadly because returns is not as good as the author projected it to be. And the ever changing pool of tenants (students do graduate don't they?) will prove to be a hassle and waste of resources to those who seek agent assistance in letting out. And finally, I can almost never find a property returned in good condition after a tenancy expires. This I speak from experience: I pity my landlord when we returned the keys. He actually sold it off to someone who demolished the whole unit to rebuild something else.

I wonder with the current trend of journalism how further backward will we continue to go? I don't mean to criticize all journalists, but I would rather read lame Bieber-related news, than real estate articles with outrageously optimistic datas written by journalists who I suspect have not even bought one property, just because they have to write up an article to submit on a deadline.

wtf?

Reading Faizul Ridzuan's 'WTF? 23 Properties by 30'. Must say it brings back lots of memories of internet forum days. Probably more than half of what he wrote in the book were in forum chats over the years accumulated (or at least I knew the stuff were discussed before anyway), but it's a great book nonetheless.

And it reminds me of a middle-aged man (probably closing into his retirement age now?) who made a sneering remark about me being the 'talk a lot, pretending to be smart kind, but unfortunately without much substance or investments'. And also wishing me luck because I will be needing a lot of it.

Makes me smile every time I think about it.

Man was über proud he was renting out his studio unit at a mere RM1.1k. Started a forum thread pretending to be asking for advice, then revealing he's already investing and basked in his glory for shooting down my opinions.

Poor chap didn't know I was making better rental returns.

I eventually slowed down in forum participation in the coming years. Well, talks on the internet are, and always will remain cheap. Chap thought he won the battle and loved all the attention when clueless 'investors' seek his expert advices in property investment thereafter.

Me? Lost to a keyboard warrior. But at least I got a consolation: when what he revealed has confirmed that I am actually making more money than he was, for every single month from that day onwards.

Until today.

.

.

.

Bwahahahahaha!!!

landed finally...

Well, the title itself doesn't explain anything.

But like I mentioned a couple of posts back, I have finally found the nerves to sign an agreement to tie myself down to a whole life of commitment. That 'dream' landed property for my own family.

Surprising sometimes how some things seem to work the way it does. The Mrs and I have been discussing about getting a landed home for years, and for years I have pushed back the idea because I thought at our age and the size of our family, a proper condominium would've suffice.

Having said that, it is still my dream to find a landed for both of us to grow old in. That special home where we will get to decorate with arty farty paintings on the walls, argue over the shades of brown in the livingroom's wall, how the kitchen should be extended, how the bathroom tiles should match the floor tiles, you get what I mean.

I always thought this place will be there, maybe just 5-10 years down the road. Yes, I get somewhat worried with the current escalating price of properties in the country, but in a way I have always tried to assure myself that I will be financially equipped when the day comes I will have no hesitation in signing the dotted line.

And unexpectedly, that day came a little bit too soon for me, or for us?

Nevertheless, it is still a dream home, and all signs and circumstances have it that we will be staying here for a long time. And so we decided to go all in, even though it means that I will never get to buy another property for investment again. Ever.

A huge step to take, and a huge responsibility to shoulder. But every time I look into my Mrs' eyes when we talk about this home, that is all the convincing I need that I have made the right decision.

I can never be happier than to see the person I love that happy.

ending 2011 in style...

Blogging seems like a difficult chore these days, I always wonder how some blogger find the time to commit. I mean, don't these people have a full-time job or something?

First it was twice a week, then once a week, once a month, once every two months, and now I guess I'll be blogging once every quarter of a year. Soon I'll be posting twice a year if the graphs indicate whatever it looks like it's going to be.

Anyway, an update is still an update, no one shall complain that I never blog anymore (the least I am updating my blog more often that my friends do, you guys know who you are).

October came and it's gonna be gone in a few hours, and we're into the final 2 months of 2011. What exactly have I done in the year 2011? Need a quick refresh.

Quarter 1 - Got married, best celebration party of my life. Honeymoon in Club Med Kani, Maldives, best holiday in my life. Went into a subsale purchase, met the worst agent and banker in my life.

Quarter 2 - Joined Business Network International, got to know individuals from dozens of different industries. Went to Bali, but was working while holidaying. Had no break throughout June, spent 10 hours at work when lucky, or 20 hours when unlucky.

Quarter 3 - Work spill over from June to July. August was meant to be better but didn't happen, but at least finally closed the deal started in February. Schedule became hectic as outstation assignments started piling in. Started looking out for the next property.

Quarter 4 - First month into the last quarter of the year, and already traveled 5 states in a little over a month. Made the bravest decision in purchasing the most expensive property in my short working life.

With 2 months left of 2011, I would've wanted to make the most of out it, but knowing the nature of my business, chances are 2 or 3 days off in the next 60 days will be considered a luxury. Already worked through Deepavali, will be working through Hari Raya Haji, Awal Muharram and Christmas. My best bet for a day off work will be New Year, provided that I won't need to work from home.

What more, with one of my best friend's wedding coming in the coming few weeks, I have actually considered for a couple of months whether to make the bold decision and fly to NZ for a short break and celebrate my buddy's big day in Christchurch, but in the end decided that it will be somewhat irresponsible considering that my colleagues will be battling and working their a$$e$ off when I am away.

So sorry, bro if you're reading this, would really love to be there to witness your biggest day in your life. But I can assure you that even though I'm thousands of miles away I will be cheering for you on the day you end your bachelorhood, congratulations brother!

hola from butterworth...

Same old way in starting my write up: 'It's been a long while since I wrote something here'.

Same excuses, haha...

Quite a lot has happened in the two months since my last post. Well, one of the 'happening' is that the Mrs and I have already been to our second honeymoon to Bali. :) We've taken quite some pictures but like the lazy guy I am I won't be bothered to post them all up here. Perhaps the Mrs will upload into her Facebook albums sometime soon, better view there than here.

Also in these two months, we've managed to acquire a property, Shop Office Home Unit actually. Anyway, this place has been in my radar even before our big day earlier this year, but because of the commitment we'll have to choose where our priority lies so this come in second best. After the wedding is over, we went back in the market and the price appreciated a good 15% from what I was quoted before. Oh well, there's a price to pay for procrastination, but I don't regret the decision to have a wonderful wedding as our main priority (despite making myself RM30,000 poorer).

In the past two months, I have also officially joined a business network group, where a group of businessmen and businesswomen gather together once a week at 6 in the morning to brainstorm and refer businesses to each other. It's a different experience altogether; I get to learn about how other businesses are run, how people market their products or services, how to develop good social skills, and most importantly, how to make these people understand my business so to be able to refer me my desired referrals. It's about time that I approach my work in a different direction, I no longer have to sit at my desk doing paperwork, cold calls, occasional appointments, and busy with the production work. These days I am always on the run, normally spending half the day on the road, very little time in the office (mostly to prepare my presentation items), and very little time with the computer, hence the lack of effort in blogging.

In fact, the only reason why I get to post this right now is because I have 4 hours to spare, stranded here in Butterworth with the Mrs at the saloon to straighten her hair.

Time is getting more and more precious.

And I am loving life more each day. :)

back to business...

Okay, it has been a quiet 2011 thus far, and fair enough with the wedding and stuff ongoing.

Mid of February, I'm back. Perhaps I should blog monthly, at least I'll make up to 12 posts a year. Which isn't too bad.

Wedding was a blast, and great that everything went by smoothly. Since then, 3 pairs of friends got engaged. Now that our wedding is out of the picture, we're scheduled to attend at least 10 weddings throughout the rest of 2011, two of which are my cousins'. November will be a busy wedding month, it's gonna be fully booked every weekend.

Saving a penny here and there since the wedding's over, I guess I can go back to what I enjoyed doing all these while, and get back going in the market. One year out from the field and feeling rusty, but 2-3 weeks of practice and things started to feel like how it used to be. And if everything's going good hopefully a good deal before next month, and one of my goals for 2011 will be fulfilled. Boy, I have a really expensive hobby, sigh...

greed and fear...

I considered myself to be somewhat lucky to have an interest in something that generates some passive income every month. I have to admit that I am still pretty new in property investments but several years on, I am starting to feel disillusioned with the growing crop of so-called 'investors'.

Over the years I've got to know some pretty good investors who I thought shared a common interest, but lately things seem to be getting a little out of hand. Generally I have no problems with how one manipulates his/her own financial tools to diversify their own investments. But I do have my reservations when a company is formed to 'train' new investors into jumping into the bandwagon.

Personally, I believe property investment is not the kind of activity where a huge group of people can just join and be a member. Surely there is something that benefits the core group of investors who formed the 'group' that gives such training and seminars, such as huge membership fees up front. While one can gather much knowledge through these activities, but to introduce ONE project to 300 registrants I think we are misleading a whole group of 'newbies' into the BUY BUY BUY trend.

Surely no one is obliged to join and buy but the situation now creates an army of mindless zombie-like 'investors' who would be more than willing to jump in with the rest of the crowd, and let's be honest, with thousands of like-minded 'investors' in the same project, do one still think it is a good investment? I have my conclusion on that, but I'm keen to know what these people are thinking.

In the end of the day, the core group of investors will be the main beneficiary. Hundreds of registrants will mean over a million ringgits of membership fee received, and no doubt these 'seed monies' will be distributed amongst themselves as 'bullets' for their own agenda, possibly other developments not known by commoners like me. Do one honestly think that a smart investor will buy something where thousands of others are investing into?

Think again.

By motivating a group of people to BUY unconditionally we're creating a bubble which will eventually burst in the near future, and when that happens who will benefit, again?

Things are getting a little out of hand, and you either join the bandwagon which will guarantee to make some profit IF you can predict the timing of the bursting bubble correctly; or you take a road which holds lesser risks and let others have make the money first.

You may be greedy when people around you are fearful, but be fearful when people around you are greedy.

bye bye BBCC...

Uda diminta utama Bumiputera

Oleh Sharifah Salwa Syed

Pengusaha Melayu mahu pemilikan 70 peratus di Bukit Bintang City Centre KUALA LUMPUR: Uda Holdings Berhad (Uda) diminta supaya memberikan pemilikan lebih 70 peratus kepada Bumiputera untuk membeli projek pembangunan bercampur dikenali sebagai Bukit Bintang City Centre (BBCC) yang akan dibangunkan agensi itu tidak lama lagi.

Yang Dipertua Persatuan Penjaja dan Pekedai Bumiputera Wilayah Persekutuan, Mithlan Samijoo, berkata Uda bukan saja perlu memberi peluang kepada pengusaha Bumiputera yang berkemampuan, malah memberi keutamaan kepada mereka yang layak membeli hartanah di kawasan berkenaan.

“Apa yang kita tahu ada di kalangan ahli persatuan memiliki aset yang banyak, tetapi kebanyakan mereka mengeluh tidak mempunyai tapak niaga yang strategik seperti yang dimiliki peniaga Cina di sekitar Bukit Bintang. Jika ada pun, kita tidak mampu untuk bersaing dengan mereka berikutan sewa yang terlalu tinggi.

“Justeru, apabila Uda memperuntukkan pemilikan sebanyak 60 peratus kepada Bumiputera, kita anggap itu satu bonus kepada peniaga Melayu. Namun, pada masa sama, kita berharap Uda meningkatkan pemilikan sehingga 70 peratus bagi memberi lebih ramai peniaga Bumiputera memiliki hartanah di kawasan berkenaan,” katanya ketika dihubungi di sini, semalam.

Semalam, kerajaan bersetuju dengan cadangan Uda meroboh keseluruhan Kompleks Penjara Pudu tahun ini untuk dibangunkan sebagai projek pembangunan bercampur dikenali sebagai Bukit Bintang City Centre.

Menteri Kewangan Kedua, Datuk Seri Ahmad Husni Hanadzlah, berkata pembangunan di kawasan seluas 7.6 hektar itu akan membabitkan pembinaan 1,100 unit kondominium, hotel, ruang pejabat dan pusat komersial dengan anggaran kos RM5 bilion.

Mithlan berkata, pihaknya yakin ramai di kalangan peniaga Melayu mempunyai kemampuan untuk memiliki hartanah di kawasan berprestij itu cuma yang menjadi kekangan kepada mereka adalah dari segi kekurangan tapak sesuai untuk dijadikan premis perniagaan.

Beliau berkata, ada antara ahli persatuan menyewa premis di Jalan Masjid India dengan kadar harga tinggi sehingga RM30,000 sebulan untuk tapak niaga berukuran 20x70 kaki.

Sehubungan itu, pihaknya berharap cadangan pembinaan hartanah bercampur itu akan memberi satu khabar gembira kepada peniaga Bumiputera.

“Jika tidak diberikan 100 peratus kepada peniaga Bumiputera, memadailah memberi keutamaan sehingga 80 peratus kepada peniaga Melayu untuk bertapak di BBCC apabila ia siap kelak. Kita mahu menjadikan kawasan ini sebagai tempat pemborong Bumiputera.

“Kebanyakan ahli mampu untuk membelinya... cuma apa yang perlu Uda sebagai agensi yang menjaga kepentingan orang Melayu perlu memikirkan sesuatu, termasuk menawarkan harga berpatutan bagi membolehkan mereka membeli ruang niaga di BBCC, sekali gus bersaing dengan peniaga bukan Melayu,” katanya.

Now I am really speechless. No, this isn't about races or religions, this is about the mindset of certain quarters in the country.

“Apa yang kita tahu ada di kalangan ahli persatuan memiliki aset yang banyak, tetapi kebanyakan mereka mengeluh tidak mempunyai tapak niaga yang strategik seperti yang dimiliki peniaga Cina di sekitar Bukit Bintang. Jika ada pun, kita tidak mampu untuk bersaing dengan mereka berikutan sewa yang terlalu tinggi.

Wait, I didn't know in Bukit Bintang retail outlets have different rental prices for bumis and non-bumis.

Jika tidak diberikan 100 peratus kepada peniaga Bumiputera, memadailah memberi keutamaan sehingga 80 peratus kepada peniaga Melayu untuk bertapak di BBCC apabila ia siap kelak. Kita mahu menjadikan kawasan ini sebagai tempat pemborong Bumiputera.

Here's the plan, I think UDA SHOULD give 100% to bumi entrepreneurs, and on top of that, the developer should bear all costs of promoting the commercial area after completion, guarantee-buy-back scheme with 10% increment from developer's price in case businesses do not make it, waive maintenance fee for life, developer to bear utilities fee, developer to bear all renovation costs for owners, as well as providing working staff for business owners as there's a shortage of foreign labours and the locals are demanding way too high in salary, also subsidizing 20% of the employees' pay, contribute EPF and SOCSO on behalf of business owners, while the banks should come out with BLR%-BLR% (0% interest) loan packages with options to postpone installments when business is bad, further 10% off the installment sum when paid on time, and special buy-out clauses when business go haywire.

Goodbye Bukit Bintang City Centre. For a moment I thought you're going to be a key development, the next hotspot, and a brilliant investment in Bukit Bintang.

Then I woke up.

1Malaysia!

first experience in auctions...

Perhaps this doesn’t equate in an ordinary manner, but I traded approximately three weeks and 50 bucks to buy an experience in property auctions.

Before anyone jumps into conclusions, I did not manage to get the unit auctioned.

Here’s how the story goes.

I spotted a pretty decent auction unit while rummaging through the classifieds 3-4 weeks back. After the usual queries, an agent alerted me of another condominium studio unit in a location which has been interesting me a long while. I got the common information I could get from the agent and paid the unit a visit the following day.

Visiting the auction property is a must, if you do not know yet, because you’ll never know if you are buying an auction unit with a corpse tucked nicely in the fridge (you know, the Mont Kiara case several years back). But having said that, 99 of out 100 times you’ll never get to view the inside of the unit because 1) the unit’s vacant with padlocks intact; and 2) the person staying there refuses to open the door for you. Well, unfortunately but expectedly, yours truly belong to the group of 99.

Anyway, knowing the area and location, I was somewhat confident that the unit is decently priced below the market value and after a week of research, found that the unit’s being auctioned for the second time (and 10% cheaper than the original auction price). Also, after checks with several agents and database, figured out that it’s around 15% below the market value, which is pretty decent.

The following week, I arranged with another agent to view a unit for rent which is identical with the auction unit so that I can look at the actual layout with my own eyes. Not the nicest thing to do, I have to admit, but that’s the best I can do to have a good grasp of what I’m getting into.

Within the same week, I also visited the land office twice. I arrived at the land office in the afternoon for the first time and got turned away because the land office does not check documents in the afternoon (?). Don’t ask me why, but that’s the reason uttered by the man over the counter. In Bolehland, anything can happen and that includes government employees being barred from searching for documents after 12pm. Good luck in achieving Vision 2020.

Anyway, had to return the following day to make the title search, as well as to check whether any caveats are lodged on the property. After being directed to 3-4 different counters, I finally manage to get the property’s strata title presented in front of me.

It’s but a whole load of jargons.

Can’t really decipher anything encrypted in all of the 3 pages and considering that I can’t photocopy it, I end up staring blankly at the documents not knowing what I should be looking for. I had to request the office staff to explain the important things that I want to know, which is 1) if the defendant the rightful owner of the auction unit; and 2) whether there are any private caveats lodged on the property. And I got good news for both.

Went through the proclamation of sale with the agent again after that and was assured that the bank will bear all outstanding arrears so everything seemed fine. All the recipe for a perfect buy.

But if some things seem too good to be true, usually it’s too good to be true.

Several days ago, I dropped by the auction unit again and this time I lingered around with the security guards to know more about the current owner. Little is known about the owner except that she defaulted payment amounting several thousands, and the weird thing is the neighbour of this unit is so reluctant to talk to me (I bumped into the neighbour in the lift) he’d rather stare right at the lift’s wall than to speak up.

This bothered me for a couple of days. What if the owner’s still staying there? What if she refuses to move out after the auction? Is she even alive? Why is the neighbour so afraid when I asked questions about the auction unit?

After much consideration, I decided to back out from the deal.

But having gone through almost the entire procedure, I went to the auction anyway, and bought the banker’s cheque that will enable me to enter the auction room.

Thank God I made up my mind early, because on auction day there were 7 other bidders who’re targeting the same unit. And the proud new owner of the auction unit is a middle-aged lady who’s obviously a newbie in auctions.

How do I know?

Because she raised the last three bids without anyone counter-bidding and she got the unit at a price 15% above the market value (might as well scout the market for sales if you’re gonna pay a price like that). The judge actually had to stop and ask if she knows she’s upping the price herself before the hammer finally comes. Not my problem anyway.

It was fun while it lasted, and despite all the hassles and troubles I think it was a worthwhile experience. I’ll be glad to go through the entire ordeal again if I can unearth another gem in the auction market in the future.

done and dusted...

It took almost seven months, but anyhow I’m glad that the deal’s finally concluded.

It was right before Chinese New Year this year that we went to view this condo unit, which wasn’t even put up for sale back then. We were merely viewing another similar unit belonging to an extremely fickle-minded owner, and for that this condo unit was presented there and then to us by an agent, from a person who didn’t thought of selling at all.

Immediately after the first viewing we made up our mind that this is the better choice (thanks to the other owner’s decision to increase the selling price 3 hours BEFORE we sign the agreement), and we made an offer to this current unit which he agreed after almost two weeks of consideration.

I had some doubts during the early stages, but seven months down the road, the path looks so far so good. The current tenant is continuing until end of the year, which as least will give us several months’ buffer which can be used to cover the gap when we take over for renovations after vacant. Hopefully, we’ll be able to increase the rental and get it occupied before the turn of a new year.

The entire duration of this transaction hasn’t really gone that smooth, but at the moment I pretty satisfied with the extra knowledge and experience gained throughout the past six months. I’m sure I’ll be better equipped for the next target, although I may have to push the plan further back to accommodate some far more important plans at the moment.

Plans, plans, plans.

words don't hurt me...

I may not be the best one to explain everything regarding property investments, but I will have to concede that at times, the more I explain the more futile it gets. Especially when the people around find it easier to knock down my idea rather than take seriously why I do things the way I do.

Is property investment risky? From a common point of view, yes it probably is. To start investing in property one may consider having tens of thousands cash to begin with, down-payments, legal fees, bank loans, insurance and stuff. You only need to make ONE mistake in property investment to earn you a one-way ticket to hell.

But me being me, I’d like to think it’s a complete opposite from the general perception of high-risk.

Yes, many have told me that I’m gambling with this. At my age it’s easy for people to assume that I do not know what I’m doing. It’s too convenient for people to make sweeping statements when somebody my age talks about property investment.

It really irks me at times, especially so when someone 10-20 years my senior makes degrading remarks of me ‘pretending to be smart without much substance or investments’.

Does it hurt? I’d be lying if I say I don’t. But I guess over time I’ve come to realize that I’m not doing this to prove anything to others, but to protect myself financially for my future.

Besides, me playing with fire? Serious shit? Nobody; who knows me personally; takes me as a risk-taker all my life, and believe me, I am not still.

Lucky?

When I’ve gone through months of extensive research on the area’s development past, present and future, its population, capital appreciation or depreciation, prospects, yields, browsing through endless legal documentations and exploitations, continuous scouting, surveying and negotiations, seeking professional advices in both banking and legal, thorough discussions with investors, and countless other efforts probably not worth mentioning?

Me being lucky is a fantastic analysis for the lazy.

Well, then again, maybe I am lucky.

Like what some people say: the harder you try, the luckier you get.

connaught avenue...

My first brush of shoulders with Connaught Avenue's developer, Akisama Enterprise, was back in late 2006 when I visited their show unit for Kuchai Avenue. I was pretty impressed with their finishings and pricing, especially that the locations they acquired are usually pretty strategic.

And when I saw a banner erected at Jalan Cheras on their latest development, Connaught Avenue Service Apartments, I decided to visit the show unit to take a peek at what they have to offer this time.

To put it briefly, Connaught Avenue is located beside Econsave and will take up the location which currently The Challenger Futsal Centre sits. A leasehold land with 99 years (starting from 2009), with a total land area of 8.66 acres, more than half of the land taken up by 2-storey shop-lots that will be completed together in end of 2011.

One thing unique about Akisama's residential properties is that they always come up with only one type of lay-out, regardless of how many units there are. Connaught Avenue will have 385 units of service aparments spread in two blocks, which makes it about 193 units per block. Having stayed in D'aman Ria with over 400 units in a single block, personally I think this will be quite low in density.

I've always been impressed with what Akisama offers together with the units they sell, back then when I visited Kuchai Avenue, they were selling at RM15X,XXX per unit of 935sf, inclusive of fully furnished bathrooms and 2x2 tiles. I visited the show unit pretty late, and at that time there were only 2 units left, and they even offered 2 units of air-conds to close the deal. Let's just say I passed the offer and now I live to regret the decision. ; )

Anyway, last weekend was Connaught Avenue's soft launch, and it was already Sunday when I finally went, and boy their sales certainly impressed me. Soft launch for the first block with about 190 units, 70% were already taken up by the time I reached (around 1 noon).

What not, with their starting price of RM180,500 for a 950sf unit, I'd say it's pretty affordable especially since it's in a location with mature residential lands surrounding it. And to top the offer, the bathrooms come fully furnished together with plaster ceiling, and now they include built-in wardrobes for all three bedrooms and the kitchen cabinets! Not forgetting that the maintenance fee is 0.13 cents per sf, that adds up to less than RM140 monthly including the sinking fee (which btw, will be waived for the first two years).

I'll leave it to your decision whether this is going to be a good development or not. I have my opinions, but I'd rather listen to others on how they see Connaught Avenue.

: )

confusion...

I'm trying very hard to find flaws in common financing packages, I'm sure there's a common practice amongst investors where they get to finance properties 100% but in reality the loan agreement says 90% margin of finance in black and white. The banker values your property higher than the transacted price, and the bank approves 90% loan according to the bank's valuation.

But considering that the bank will require all the necessary documentations of the transaction and SPA, how on earth do one get away with the inflated price to acquire a higher loan amount than he/she is supposed to get?

Even if this works, how do we claim the extra cash from the bank when they help you to pay off to the vendor? Doesn't the money go straight to the vendor? If not, then do the bank transfer the loan to your own account? Which didn't really happen during my first experience in properties. So how does the money go about here?

And if it's a common practice, do the loan packages include zero entry cost, or just plain loans for the property value? If the package can include the likes of MRTA and such, then surely the loan wouldn't be the exact '90%' but higher. So how does the bank calculate the loan amount when the transacted price is totally flawed on purpose in the first place?

I must've missed something very important along the way. Surely there's a way to explain all these.

I hate it when something bothers me this much.

bye bye hoglets...

Well, I was supposed to blog about my Valentine dinner, or ZH's wedding, whichever, but unfortunately the camera's not with me and the photo images are yet to be transferred to the computer, so I'm blogging about something else in the meantime.

On the night of ZH's wedding, someone called up and expressed serious interest in purchasing my last hedgehog on the same night, and after much hesitation (it's Valentine's Day and a close friend's wedding for Pete's sake!), I finally decided to have the deal done, and my last hoglet finally left to a new owner's home at 12.30am. : )

While I would say that breeding hedgehogs wouldn't really give you very good profit, at least it has covered up my expenses when I first started rearing. But anyway, it isn't really for all the money; nobody gets rich by breeding livestocks and selling them, personally it has been a wonderful 4 months I have had watching the hoglets grow from an inch long into the size of my palm. I'm just glad to find a hobby which can give me a little return in cash to be 'reinvested' to my hobby.

I've mated my pair of hedgehogs last week and hopefully this round, I'd be able to breed the mother's colour which didn't happen in the last batch of hoglets.

On a different topic, I've finally put the pen on paper for another investment, ending my 6-month monitoring and research, and three weeks of continuous negotiation. Now it's time to shift my attention to another location and begin the tedious works all over again.

Next post will be either Valentine's or ZH's wedding. : )

false alarm...

Damn it, when things look like they're too good to be true, then it's too good to be true.

I guess it wasn't really heaven, just a pile of clouds in the sky.

Oh well, better luck next time.

CIMB's BLR drops today!

And it's all great news!

Ah, it's like all the best things that can happen today happened!

I'm in heaven!

big fish...

Came across an ad of a property priced at approximately 7% below market value on sale last month but after (very) much procrastination, the property was 'JUST' sold by the time I lift up the phone to make an enquiry.

Having studied the rental rates of similar properties, it's probably going to fetch about 9% rental yield, at least. Or better still, I've come across investors who's getting 12% for the same type of property.

Oh well, that's a big fish that escaped.

Anyway, I guess I'll need to be more alert next time, but it's gonna be hard considering that the BLR has dropped to 6.5%, with news that it's going further down in the coming months. Good news for current landlords, yay, bad news for slowpokes like me, nay...:(