Remember the universal rule: those who can't do, teach.
Most 'property gurus' in the market have maxed out their personal loan quotas to fund new property investments. So the only way they can keep generating new revenue is via commissions, seminars and one-on-one consultations. So essentially these 'property gurus' are celebrity sales agents.
This is how Faizul Ridzuan's business model works-
a) Faizul Ridzuan Private Group (FRPG): free group- Similar to introductory public seminars/talks like the Road to RM3m seminar, he will upload weekly/monthly videos on analysis on areas and grading of properties. Wonder why he's not charging you anything? Well this is a cheap marketing funnel to influence and entice you to buy his other products. At the end of every video, he will project slides on his products, entice people to join his VIP seminar/ participate as a client to get more 'benefits' via his bulk purchase groups (7 and 8 Digit Club).
b) One-on-one consultations- If you need to see him, chances are your property selections are shit/ bleeding money. At the end, he will either encourage you to: join as client/ seminar/ 7 & 8 Digit Club bulk purchase group since you're so bad at selecting properties yourself.
c) Millionaire Employee Blueprint- This is a group where he uploads a few additional videos on loans, insurance and case studies for an additional few hundred RM.
d) Bulk Purchase Groups (7 and 8 Digit Club)- He will excite you by saying that you can purchase properties at a lower/ "special/insider" price than the public due to his direct connections with developers. Then he will say his main clients (FAR Capital clients) get priority first so you might miss out on good units and don't make as much money as them. So you become his client.
e) Value Investing Property (VIP) seminar- His partner, Amanda will spend half a day going through interior designs. She will project beautiful designs of successful properties. Guess who carried out those renovations? Faizul's interior design firm (Makeover Guys). At the end of his VIP seminar, he will also give you a snapshot of what his clients are purchasing and drop hints that his clients are making alot of money. If his clients managed to buy a property at say RM600psf and it gets launched at RM700psf to the public, he will go all out and promote that his clients made RM100psf of paper gains.
f) Interior Design firm (Makeover guys)- During the VIP seminar and if you're his FAR Capital client, he will recommend his interior design firm, Makeover Guys so that you can rent out your units as quickly as possible.
g) Social media- Each post is designed to influence public opinion to his advantage and funnel sales towards his seminar + property recommendations. He will put statistics to show how capital appreciation for house prices exceed stocks in Malaysia. He will also highlight how accurate his predictions are when a particular event happens. From time to time, he will put posts on how well his clients are doing (when in reality they are just making paper gains due to their low entry price/ "bulk purchase price"). This is designed to increase his public profile and 'showcase' his skills.
h) FAR Capital clients- He will 'encourage' you to purchase multiple properties at once to maximise your limited "loan quota". He will ask you quickly do multiple submission as central banks will be closing this loophole. In the client agreement, he will insert clauses that state that you will have to pay him a certain amount if you do not purchase properties via his company, FAR Capital. He will say that you are not really spending money because 2% sales commission of the property will be refunded to you. Typical firms such as GS Realty- customers pay the agents a fee when they actually want to buy the property. However for FAR Capital- clients pay them for getting a list of what they are selling + fee when they actually want to buy the property. This is double dipping from both buyer and seller side. Additionally, he knows how the herd mentality concept works, so he will say that if you do not sign up as a client quickly, you might not have access to good units (better view, floor, etc) as they will be taken up by other clients. The client agreement is heavily one-sided towards FAR Capital, he will put in non-disclosure (NDA) clauses to scare clients. In Malaysia there are plenty of laws but the problem we have here is enforceability. It is extremely hard to invoke this clause when the subject concerned is a property that is accessible to the general public and when the information is shared across so many clients. NDA clauses are mainly for trade secrets, company specific info or personal information (marital affairs). There are alot of clients who got burnt because they couldn't share their side of the story as they were scared of this NDA clause. Take note that FAR Capital is not responsible for any potential losses.
i) Commissions from property developers- This is where I think he makes the real $$. Most of his property recommendations are less than RM1m per unit. Assuming it's RM500k, a 2% cut is RM10,000 per unit. Previously he was very against cashback properties but right now I understand that he's promoting one right now (One Cochrane). Cashback are basically marked-up products with discounts. He will tell you that the property will have negative cash outflows at the start and your property will always double/triple in 10-20 years. Well even if it does double/triple in 20 years time, will it be easy to find a buyer and cash out? will you yourself buy a 20-year old condo? If a property is full of investors vs own-stay buyers, supply > demand, do you think you can fetch a high rental when everyone is being coached by the same person and use his ID firm? What would be your competitive advantage for your own unit then?
A top property development sells itself. If you’re a property developer and you know that your units are high in demand and will sell well:
- Will you hire an external agent (pay him millions in sales commissions) to help sell your units?
- Will you enter into underwriting agreements (a form of insurance to guarantee sales) with third parties/ sales agents?
- Will you give a significant/ bulk purchase discount to attract buyers?
There's a reason why property gurus focus on condos and new launches. Because it is the only type of property class where they can generate huge amount of commissions in one go.
Claims of owning multiple properties- He released a book titled '23 properties by 30'. You are the owner of a property even if you own 1% of a property. Do you really think that he owns 100% for all of those properties?
Client/student testimonials- If you go through his success stories/testimonials, the only stories you can find from his students are: how much his students bought at (vs market value) or how many units they purchased simultaneously. The real success story is when your students managed to exit their investment at decent returns, so the real success metrics are like sold property at ROI of xx% within x year, etc.
Takeway- do learn the theories/concepts from him, but don't listen to his property recommendations as he has vested interests in them (needs to generate fees from commissions when a client purchases a property via FAR Capital)
Seem like you have some insight.
Curious if you are a member of the group/ one of his clients...