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.