UXB...

That is really strange, I'll call them again next year as I need to get the rental unit up and going first.

Just as Backkom said. Also like to add, once the loan approve, you can start looking for tenant.
The first auction property have one ready tenant, will move in once everything is settle.
Man my agent is real fast.

Good to hear that, I too like to have a few bankers under me to keep a bit of competition going on.
Now only have 1 banker.

Later I would ask all my banker to join me for lunch and go through my financial issues.
Hehe.

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Added on September 2, 2009, 8:58 amIt would be better to call up one of the banker before the auction starts.
Let the banker look at your financial and see likely would the loan get approve.

For banks that give ZEC, the condition is to get one of their lawyer's service.
Different banks have different panel of lawyer.

This post has been edited by jasonhanjk: Sep 2 2009, 08:58 AM

I can tell you it's getting harder.

As I have 2 loans but still not able to show they are being rent out.
Hence the difficulty in getting the loan.
The 3rd one purchase using my mom's name and loan using both of our name since she is still working.
My name is included to get a 30 year mortgage.

2nd one didn't manage to put under my sis name because not sure how the auction system yet that time.

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Added on September 11, 2009, 2:36 pmIf you want to be rich, be incompetent.
If you want to be very rich, be lazy.
So the answer to question 1, I'll let the agent find them.

2) It's not easy if you price your rental above market price.
Normally in an area that has low vacancy, it's easier to get tenants.
To know your rental market rate, ask your agent.

3) That depends on how good you manage your property. I heard from a tenant about a neighbor.
That neighbor move out, follow by cleaning done by a cleaning company, next day a new tenant moves in.
My first property is already tenanted, so not much of a hassle.
2nd one standing by, 3rd one still try to get a loan.

4) Agents are different. I have not went thru mine but I can tell you roughly what they will do.
They will get in tenants, get the leases done, explain how much deposit required.
After tenants move in, collect 1 month rent from me as commission.

This post has been edited by jasonhanjk: Sep 11 2009, 02:36 PM

Take some time and think about it, how do you be lazy and let someone do it for you?

Talk to a few agents to find out which area has been low and about to come up. They are your ears and eyes in the market.

This post has been edited by jasonhanjk: Sep 12 2009, 03:00 PM

Put your financial statements in order. Keep good records that is easily readable.

If you don't know, you can ask a bookkeeper to help you.
Or play the game cashflow 101.

Yes, your financial statement is your report card when you leave school.
They need your payslip, bank that shows bank in, epf, income tax, savings, etc.
They are not going to loan you the money base on your English literature that you got A in high school.

If you have a credit card and have some late payments, they too are able to check on it. They are CTOS, CCRIS and others.
Of course, there are ways to correct late payments.

Bank themselves have their own property price valuation.

This post has been edited by jasonhanjk: Sep 16 2009, 09:29 PM

John Treed, RK number 1 basher.
John has been famous for many years, and not because of his books.

Well, it's your choice really.

Some choose to believe in Treed but others believe in Kiyosaki.
As I have choose to believe in Robert, so far I am getting profit from my property and silver trading.

So choose wisely.

So far I only know UOB in Singapore.

ETF in US can be trade too.

Saw your PM, I won't know a lot of answers but I'll try my best to answer you.

Most agents only want your money to bid on your behalf, eventhough they are paid by the bank to register their client whom won the bid.
Nothing right or wrong, it's just their way of doing business.

Now before we start off, here is a few serious question that I will ask you before I go deeper. If I am not satisfy, you will need to get it improve.
Treat it as a challenge. Every question has a reason behind it.

1. Why you want to invest in properties?
If your reason is strong, you will find ways to solve your problem. There will be more problem coming up after you acquire the unit.
Having talk to 2 agents had show that you have the innitiative, good.

2. How you manage your finance? How much you put away every month, in dollar and percentage?
This is important, if you mismanage your money. Buying a property will make you lose even more.

3. What have you learn about investings, which books have you read?

Here is a hint how to get started:
Normally banks would put up units being auction through an auction house. Sometimes you can visit these auction website, banks website or even one of the bank's branch.

Now, more than 50% of the properties being auction are bad. You must do your homework and find a good area.
A good agents is not easy to find, I have found her (2nd agent) and she is my dream gal.

There are 6 simples steps to become a succesful real estate investor, that is:

1. Choose to be an investor
2. Select an area
3. Finding an agent
4. Select a property
5. Put the deal together
6. Management

Hehe.
Quite impressive with you answer.

I keep looking at deals every week. So I know in JB some areas will be coming up.
Basically the area I invest are in good neighborhood and the rental able to cover expenses with profit. I just intro to a friend yesterday, a deal can get him approx 14% return of his money via rental, Cash on Cash Return (COCR). Also the reserve price is below 25% below market.

Or later we could spend another RM5k to install AC and water heater to jack up the rent, that will increase the COCR to near 30%.

This Sunday I am free, so PM me.

Ah well.
My friend just called and he don't want this 14% deal at Permas.
Had to look for him another one at Tampoi.

Edit:
It's an auction unit.
The problem with auction is when the maintenance owe by the owner could go up to RM10k.
Normally investor have to pay up first then claim back from the bank later.
If cash strap, auction is not the best deal here.

I estimate needing approximate RM30k to invest in auction, otherwise re-sale would be fine for people whom have below RM10k cash.
Normally my agent will check all these and let me know upfront. It's faster this way.

I could do those checks but it will waste a lot of my time, not to mention finding the deals.

This post has been edited by jasonhanjk: Oct 22 2009, 01:54 PM

To check these basics, you pay them another RM1k to RM2k extra.
If you want them to negotiate with the current tenant to move, another RM1k. These are the charges upon successfully bidding the property.

If fail to get the unit, at most you pay them for their transport and search fees.

If a court order is needed, another few more k. Hopefully you don't go into that.

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Added on October 22, 2009, 10:08 pmFor RM60k reserve price, check you need to put how many % down.
If 10% DP, buy a RM6k bank draft.
If your budget is RM80k, get ready RM2k cash and a few hundred for stamp fee.
Just go to your bank where you create your savings account and buy a bank draft with your savings.
It costs RM5 to buy. To cancel it also costs RM5.

Most of the time maintenance will be borne by the bank but you have to pay upfront first.
Some banks will play dirty and don't want to pay.

Electric bill borne by the new owner except if it's a court auction.

This post has been edited by jasonhanjk: Oct 22 2009, 10:08 PM

Yes you need lawyer for both your SAP and loan document.
You can use the bank's panel of lawyer.
One of my NZEC loan, I uses HXBC lawyer and settle the SAP at the same time.

Having the same lawyer handling the loan and SAP would speed up a bit.
Do beware not all lawyers are the same.

Where is bandar seri alam?

I am not sure, have you scout that area?

Plentong there is Prima Regency, another auction coming for a 1024sqft unit.


Jal and Lim.
That is a firm that I use too.

This post has been edited by jasonhanjk: Oct 23 2009, 02:09 PM

At today's market, most bank's service are good.
I got to know this banker via my agent.
If they are good, words spread around.
HXBC got a higher property valuation which some banks do not.
I use UXB twice until they say I loan too much from them and start reducing the loan amount to 70%.

Some properties like town house, SXB doesn't want to give loan.

My lawyer is Thian, one thing I like them is they open on Saturday.

The reserve price starting is RM13xk, the last time there is another auction exceeds RM160k.
I don't have the details yet.

Hehe.
I'll let you copy the name card when we meet tomorrow.

Cash on Cash Return vs. Internal Rate of Return
by James Miller

Cash on Cash
Cash in Cash return, or Return on Investment (ROI) is the easiest Rate of return to calculate. It is also the one I use the most often as it tells me what the money is generating with regard to actual cash I can put in my pocket today.

To calculate it you take the amount you are getting from an investment, typically on an annual basis, and divide it by the amount you have invested. Multiply this number By 100 and you have a percentage representing Cash on Cash Return.

For example if I have $10,000 in a property that is netting $100 per month, I am getting $1200 per year on my $10,000.

I divide the $1200 by $10,000 to get .12 I multiply this number by 100 to get my percentage of 12%

As you can see, cash on cash is a pretty simple and straightforward calculation. But what if we want to take into account the amount we are paying down on the loan each month, or he appreciation of the property?


Internal Rate of Return
Internal rate of return (Sometimes called Annual percentage yield) is the total true return on an investment taking into account depreciation, appreciation, and equity gained from paying down the debt.

It is much harder to calculate, as items such as depreciation depend on your taxable income. You also have to make some assumptions with regard to appreciation until a property is actually sold and that number is known.

This calculation is typically done over a holding period of 3 to 7 years. The period is usually fairly short since IRR typically decreases as time goes on.

If we take the example above assuming the following:

1) Home is worth $100,000.
2) I can depreciate 3% of its value the first year,
3) I am in a 35% tax bracket.
4) That property values have appreciates at 6% that year
5) I am paying down $100 per month toward the principal on my mortgage payment.

We get the following:

$1200 Cash on Cash return from above
$1050 Depreciation ($3000 Depreciation X 35% tax bracket)
$6000 Appreciation ($100,000 X 7%)
$1200 Principal Pay Down ($100 X 12 Months)
_______
$9,450 Total Internal Return

As a percentage:

$9450 first year IR divided by $10,000 initial investment = 94.5% IRR the first year.
Keep in mind that this is not spendable cash. Appreciation was our biggest number and it won’t be realized until we sell the home.

I have found that if I am doing well with regard to cash on cash return, my IRR Is going to be a better number. This assumes that there are no deferred maintenance issues and that I am not going to sell the property at a loss.


http://realestategozone.wordpress.com/2009...rate-of-return/

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Added on October 29, 2009, 1:32 pmHow to use Real Estate to get an infinite return on your money.
by James Miller


I am going to start off by pulling back the curtain on the great OZ of “infinite return”.

An infinite return on your money can happen when you have nothing in an investment. While “infinite return” sounds like a large amount of money- after all infinity is a really big thing- the way the math works out, it doesn’t have to be large at all.

For example, if you get a dollar back from an investment that you have no money in, you have received an infinite Return on Investment or ROI.

In fact I really think it should be called a “division by zero” rate of return on your money, as that is what the calculator tells me if I try to calculate it.

We have gotten an infinite return a few times with Real Estate.

Here is an example of one method we used on a property we bought a couple years ago.

We bought a fixer upper house for $50,000. We got the sellers to give us a second mortgage for $10,000 which the bank treated as a down payment. We left the closing with a net of $800 being deposited into our account.

As sexy as that was, it still didn’t give us our “infinite return”.

The house needed to be repaired before anyone could live in it. We spent about $5000 on fixes like new windows, carpeting, and replacing the radiator hose that they had used on the bathtub drain instead of the proper fix – a $2 PVC elbow.

Once fixed up, we sold the three bedroom one bath house on a Lease Option, or “rent to own” contract, we let the buyer in light, allowing them to put down only $3000.

We held the property a year this way, netting about a $100 per month cash flow. After one year, the fist mortgage was “seasoned”, and the value of the property had increased due to the repairs we made. Because of these two factors, we were able to refinance everything we owed into a new first, paying off the original first and second, the repair bills and were able to take out an additional $3,000 to put in our pocket.

While our cash on cash ROI for the first year was only around 60%, $1200 annually on the $2000 we had left in the property, the cash on cash return became infinite once we pulled out the remaining money we had invested in it.

I should take a moment to let you know how that deal worked out:

The tenant buyer we put in the house did not exercise their option to purchase in the allotted two year time frame. This worked out ok for us as he forfeited the $3000 he put own, and became a tenant only. We raised the rent from $600 to a market rate of $650.00 per month.

We would have every right to kick him out, as our intention was to sell and he had two years to get financed, but we don’t like to do that if we don’t have to.

If they so desire, we try to let the person living in a lease option home stay on as a tenant, if they miss the exercise date.

It also very hard to kick a young couple out who have paid diligently over the past two years, and it really doesn’t hurt us to let them stay.

If they ever want to buy the house from us we would honor that as well, but at a new higher market rate and not at the price we would have let have it for a few years ago.

Here are the steps to receiving an infinite return for the example I just described:

1) Locate a fixer upper type property. Make sure that 70% of after repaired value of the property is enough to pay off everything you will invest in it.

Example: Property acquisition cost is $50,000. Repairs and holding costs total $20,000. After repaired vale of the property should be at least $100,000.

Try to get a seller second on the place for a minimum of one year, negotiate for no interest, and no payments if possible.

Make sure the property will net positive cash flow by at least 15% of the monthly income. Monthly income will typically need to be at least 1% of loan against the property in order to just squeak by cash flow wise.

2) Repair the property, put a tenant, or tenant buyer in place.

3) After holding the property for one year refinance the property paying off everything that you have invested in it and possibly taking cash out. Be careful not to take too much out as the more you take out, the more you will cut into the monthly cash flow.

You should have a positive cash flow with now money invested, giving you an infinite return.

As a final thought you should note that you can also have negative “infinite returns” if you lose money each month on an investment.

Leverage works both ways.


http://realestategozone.wordpress.com/2009...-on-your-money/

This post has been edited by jasonhanjk: Oct 29 2009, 01:33 PM