Owner of 5 landed houses that I bought through auctions over the last 10 years.
All of them were below market value and for a reason. Some had been through several rounds at auction.
Some pros and cons as well as tips :-
+You can get a house below market value and sometimes you do strike gold.
+You never know what you get inside. It isn't always as empty as you would think it is.
-You cannot check out the interior. If you own a drone you could use it to take a look from the windows which might give you some clues.
-You have to move very quickly.
-You do need to do your ground and home work thoroughly and know what you are getting yourself into and who assumes what, this is especially so with unpaid taxes, utility arrears and strata maintenance fees.
-Have to check for caveats.
-Is the owner still living in there? If he is expect trouble.
*If you are using leverage and will need rental to cover the mortgage or require a quick turnaround time you better not buy at real estate auctions and you might want to consider if your stamina can last up to a year with no income.
*Do you think you are smart? Many are smarter than you. Check out why it hasn't sold in previous rounds.
*Visit the premise more than 1 time and especially at nites.
*Plenty of frauds going on lately as the whole industry is beset with syndicates and crooks.
You can read about my experiences in the spoilers if it is off interest to you.
House 1
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I saw a poster by a road sign that stated "Bank Lelong" back in 8/2009 and gave the agent a call. He was from the auction house. The sign was near the roundabout to get into Desa Parkcity and the house was located at TTDI. He gave me the address and I took a look. It was a bungalow that was surrounded by very tall weeds. It did not have a gate other than one make shift gate made from rotting timber and zinc sheets. I said a prayer and went inside to have a look. There were piles of sand, concrete and tiles inside which meant the house was abandoned when it was under renovation. Also found a newspaper dating from 2002. The POS stated it was owned by an Indian owner. I asked around the neighbors no one knew anything about it and said it had been on auction on and off for a few years.
Auction day came, the RP was RM780,000 and I won it on a single bid, no one else attended.
Paid cash for it and took 3 months before I could do anything to it.
I hired an Indonesian worker, told him to spray weed killers and then "clear" the place. No idea how come the weeds caught fire after that.
I bought a jack hammer and hacked away at some spots to check what's the story. I wasn't familiar with Malaysian construction techniques at that time so I used it as a learning experience.
I realized there wasn't anything worth saving. I drew up and submitted plans for it and when I had the go ahead I had it demolished till all that remained were the original beams and brickwork. I had it rebuilt into a 4 bedroom house with 5 bathrooms, living room and kitchen of a typical American layout.
Took 19 months since winning the bid and RM580,000 before I found an American family to move into it, rented fully furnished for RM8,000
It was a good learning experience. Never had any issues with it and to date it still earns good money.
House 2
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This one will prove to you that you really will never know what you will discover inside. This was in 7/2011
The agent I spoke to for the 1st house told me about this one, it is a semi-d in PJ and unlike the 1st house, it was fully renovated and the first thing you will notice about it was everything about it had a certain element of designer to it right down to the Balinese garden.
I asked the agent what was the story to it, he said the owner that did all the work was in prison in UAE. I thought hmmmmmmm..... I asked the neighbors no one know who it was that owned it or why it was so nicely renovated and then for sale. The agent told me it would be the 2nd round. RP was RM1,400,000 which was very low for the area as there was a house 5 doors away that was selling for RM2,300,000
I attended the auction, there were 4 others in the auction hall. Each time everyone placed a bid there was a certain Chinese woman that would outbid till it reached RM1,800,000 so I told the agent not meant to be I suppose.
1 month later, he said the house was back at auction again. RP was now RM1,150,000 and again there was that previous bidder and someone that looked related to her that kept outbidding everyone till it reached RM1,900,000 so I left empty handed.
2 months later, the same house was auctioned again. The auction house was packed as there were more than 10 other properties being auctioned that morning and the auctioneer said that day things would go faster as there were many properties to go through. The RP was RM920,000 and I did the opening bid. No one else bid except when the auctioneer announced that it had been sold the same Chinese woman barged in with a few people that looked related to her saying she wanted to bid. I looked for the agent and finally asked who was that woman, he told me that is the woman who was supposed to marry the previous owner. He then told me to expect some trouble and that I should very quickly act on it. I contacted the lawyer and told him I would be paying cash for it which I had from mortgaging the 1st house.
Trouble came straight away when I exited the auction hall, that woman started shouting at me as to why I bought her husband's house. I told her if she wanted she could buy it off me for RM1,500,000 but she counter offered RM130,000 to forfeit. I told her no and I wasn't interested. Good thing I went there with a taxi as she followed me. I told her she needed to stop harassing me as I was calling the police on her.
2 months later I finally could enter the house, in that 2 months I had hired some Indian "security" to keep the premise under watch 24/7 and good thing I did so too as there were no less than 18 attempts to break into the house. When I showed up to enter the house, that woman showed up saying she was there to claim all the items in the house that belonged to her. I asked her what was there that belonged to her, she simply said everything. I told her the house was auctioned with its contents and everything belonged to me. I told her if she had a signed and stamped tenancy agreement that she could show me then I would let her claim anything that had her name to it.
The condition of the house? The inside was as designer as the outside whether it was the grille, doors, hinges and light bulbs they all were expensive branded items. There were 4 brand new TVs that were still in the box. A leather recliner that was delivered by Harvey Norman with an invoice dated 2/2010 and a stack of invitation cards to a RoM for 6/3/2010 and seemed they were rushing to complete the house in time for that event.
A week later someone claiming to be the main contractor for the renovation showed up claiming he was still owed RM335,000 for the renovations done on the house. I told him he had to claim that from the previous owner as he and I did not have a contract. He was quite aggressive with his words, said he wanted to call gangsters to which I told him I will have people there for whoever he sent and I called my "security" guy to show his face. I told him to show me evidence he had not been paid and then I will compensate him for how much he is losing on condition he guarantees the work he had done. 2 days later he brought some paper work to show me the works carried out and how much he had been paid. He justified the amount from the interest, his profit and chasing for payment. I deduced his actual loss was RM90,000 and told him if he guaranteed the house for 3 years I will pay that to him even though I did not need to but from then till the 3rd year, he said fine and when he left he carelessly left his contract book behind. I took a look at it, realized the house had a very thorough renovation job. I was surprised but found out they had spent RM32,000 on a chandelier.
2 weeks after the main contractor showed up an elderly lady, 2 men and a woman showed up. The older of the 2 men said he was the brother of the owner and the lady was their mother. Demanded the return of the house as claimed their mother sold her house to contribute towards this house. Then the other man said he loaned money to the brother for the renovation. The sister said she is a lawyer and was going to sue for the house to be returned to them. I told them they had to deal with the bank that auctioned the house. I then asked why hasn't their brother showed up or dealt with the bank, said he was in prison in Abu Dhabi, something to do with a business deal that went sour and he was arrested 2 days before he was due to be married. I told them I had already paid for the house and any dispute they have to take it up with the bank, the elder man started being a bit threatening said he was a "taikor" of the area. I stood firm and told the lady as a lawyer she should know what they are doing was wrong, she shouted at me saying I was in the wrong for stealing the house from them. I told them I wasn't wasting time as I had a house to clear.
I removed anything that wasn't screwed to a wall, floor or ceiling and gave it to a church told them to sell it and keep the money. I also got rid of the chandeliers and all the form over function ceiling fans. Gave the house a paint job, new locks and had tenants move in.
Total spent? Spent RM1,400 on lorries and removal crews. RM8,000 on the paint work and cleaning up. Was rented out unfurnished for RM5,000 per month.
9 months later, my tenant complained that from RM20 per month the water bill went up to RM800 and suspected a leak. We found the culprit, it was a leaky at one of the toilets which was plumbed to use the mains rather than pressure tank. I asked the main contractor to come fix it, he never bothered showing up. 4 months later, same thing happened this time at the master bathroom. My tenant said while taking a shower suddenly there was only very hot water and all the cold water had very low pressure. I had to send my plumber to check, again it turned out a pressurized pipe was done using an unsuitable ABS pipe. A month later my tenant again complained the water bill had shot up to RM800. I told them I would do a temporary fix till it was the school holidays and at that time I would move them out to address the issue permanently. Cost me a further RM3000 to give the house temporary plumbing. I contacted the main contractor asked him why the house so poorly done he denied there were issues with the house. He told me the deal was off as he was not interested in the money.
Unfortunately the plumbing wasn't the only thing to leak. The roof started leaking and all the 4 bathrooms had tiles that started popping out. Thankfully the house was on a 1 year tenancy and I told the tenant to leave at the end of the tenancy as the house needed work. I gave him back his deposit and paid him a months rent in good will when they moved out.
I had my workers pull out all the old cabling only to find not in conduits but just clamped in within the plaster. While hacking to find wires an entire section of the ceiling board fell off narrowly missing one worker, and where the ceiling board fell, a tile popped out and revealed the old terazo flooring. I told my contractor to remove everything and throw away everything till the house was a bare shell. Ended up rebuilding around 70% of the house as many of the walls were built with cheap sand bricks.
I spent RM530,000 to rebuild and fix the house. New plumbing, new wiring, new roof, new water proofing, new floors, new windows and doors. The only thing that remained? The air conditioners, gate and the Balinese garden though I got rid of all the open ponds in favor of concealed reservoir. All furniture including kitchen cabinets, wardrobes and sofa were purchased from IKEA and had new appliances. Rented out for RM7,000 which wasn't bad I suppose.
3 years later, the previous owner of the house shows up and starts harassing my tenant to get out of his house. I offered him to buy it off me for RM2,000,000 but he said he only wanted to pay RM900,000 for it as that was what I had paid for it. I still own it and it is still rented for RM7,000 per month and by the same Indian from India family.
House 3
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This was a corner terrace house in Damansara. This was 7/2013 and the agent from the previous 2 houses asked me if I was interested in this. He said it has been 2 rounds and no takers. He gave me the address.
I drove by to take a look, it was a corner that had been extended at the back and sides. It was a tired looking place. As I looked around a 50-something gentlemen asked me if I had come to check out the house for the auction. He gave me his life story, he had twins that he mortgaged the house to send them to London for studies, one became a doctor and the other a lawyer but both refused to help repay him and 2 years ago he lost his job, wife left him and one by one everything went. He invited me to take a look, he told me he only lived in one part of the house as the other parts had no electricity or water. Place reeked of someone who did not shower for weeks and of an overflowing garbage bin. There was an old Proton Saga under the porch.
Auction day came, RP was RM740,000 and a house on the same street but better condition was selling for RM3,200,000 so I thought it was a good deal and won on a single bid.
3 months after everything was done, I went to see him. He refused to budge, I made him a deal I would find him a place to move to and give him RM20,000 cash. He accepted I found him an apartment he was willing to move to and when he moved he took nothing from the house. He said everything about the house was bad luck. After he moved in to the apartment I did have someone from church check on him and later on they moved him to a care home as he had some mental health issues.
To say the condition of the house was disgusting would be an understatement. It did have some very nice old solid wood furniture. All of it was purchased by someone wanting to open up a boutique hotel. He had loads of Peranakan porcelains which very quickly found buyers. I had zero appreciation for it. There was an old drumset, many musical instruments including a few collectables and vinyls from just about every known artist from the 50s and 60s. All of them found buyers.
Then came the task of getting rid of anything of no value, there were 4 big black garbage bags full of empty peanut butter, jam and oriental sauce bottles. 11 bags full of beer cans. It took my 2 Indonesian workers 11 days to empty out the house.
When the house was empty I finally managed to check what was amiss with the house. All those extensions were separating away from the main house. I asked DBKL if they had the original plans for the extensions and the answer was they had no record of that house ever applying for any permission to do extensions. What I was told, most likely the house had an illegal extension at one point in its life and was sold with it and after that it just remained the way.
I had my workers demolish the extensions, also took the opportunity to get rid of roman pillars, the roman and Victorian inspired plaster rendering that surrounded all the windows and doors. Basically brought the house back to its original beams and brickwork.
I then rebuilt it to be a 4 bedroom, 6 bathrooms, 2 living rooms, kitchen and an attic study. Also put down some nice landscape and put in some nice furniture and decorations. Tried to sell it for RM4,200,000 but no buyers, rented for RM10,000 to an American family.
How much did I spend to complete and furnish the house? RM1,350,000 which was more than the original RM600,000 I had budgeted. Took 17 months to complete.
House 4
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I told myself I wasn't going to do any expensive houses any longer.
This was in 3/2015 and the agent I worked with for the previous 3 houses asked me if I was interested in a house in Taman Duta. He said it was a deal of a lifetime type deal. His actual words was "If can handle the previous 3 houses then this is nothing."
He gave me the Google location. I drove to take a look. Well it was an abandoned building site. I asked him if he was sure the location was correct, he sent me a picture and it was indeed where I was parked was what I was supposed to view.
I asked him for the PoS and he sent it to me, the place was owned by a Sdn Bhd and was being auctioned off by a bank. I contacted someone I knew that worked in that bank to dig some info, was told the case was 5 years old and the Sdn Bhd was a shell company. Supposedly someone was trying to develop a mansion and charged the land for a loan and somewhere along the way they ran out of money. I looked at it and thought RM800,000 and I could finish the project.
I went to the auction, RP was 1,200,000 and I thought I could easily flip this once am done. This was a disaster.
I won at RP but then I did not know there were 7 caveats on the land. It took 8 months to clear the caveats. I had no idea on this before as I always thought when a real estate was auctioned it was clear for title transfer. Thankfully the bank allowed extra time mainly because this was the 9th round of auction with no previous bidders and I paid cash. They wanted this off their books ASAP and gave me 31/12 as the deadline supposedly it was a spring cleaning exercise.
Finally 13 months later I had the go ahead to do something about the place. I cleared the place off all the years of garbage and sand and realized there were gigantic cracks everywhere. I asked DBKL what was the last project approved on that parcel. I got the name of the architect and spoke to him. They told me this was a project that the main contractor played out everyone by skimping and then bolted with the money without completing the work. He showed me the original drawings for the project, it was supposed to be a 9 bedroom 3 storey house with a tower. He showed me the house it was modelled after. I thought impressive. He accidentally let out who the main contractor was and I made contact with him.
The main contractor had a very different story to tell when I asked him for a meeting. What I was told the owners were a small time wannabe developer, they had this grand plans for that mansion but decided to build it on the cheap, they skimped on the piling and foundation which was the reasons for the big cracks. He said he refused to continue as the house was unsafe. He suggested I demolish the house and redo the foundation. I had a structural engineer do an assessment and it turned out the retaining walls were good, soil was properly stabilized and if I demolished the structure I could rebuild a double storey house on it without issues.
I decided to demolish the foundation and I hired the main contractor to build a 2 storey house 5 bedroom house following an American layout and one that used the best of materials. He gave me a fairly good deal as he did not charge me for the demolition works.
It took 16 months to build and furnish. Now rented to an American family for RM15,000
What did it cost me? Way way more than I should have paid but the rental does cover the mortgage.
However it did help me develop a good business partner with the main contractor and he introduced me to a good lawyer and I introduced them a good real estate agent. Now we jointly invest in real estate.
House 5
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I told myself no more big and expensive houses as when I bought this I was still reeling from the big hole blown in my pocket from House #4 and I still don't understand how I could make such a mistake. Little did I expect the cheapest and smallest house would cause so much problems and headaches.
The house was an intermediate double storey terrace house in PJ SS2. I found this house on iProperty, I asked the agent where it was and at first he did not want to tell me and was very vague about it. I asked for a POS he did not want to show me. He said must bid through him only.
I called 7 different agents for this house and they all acted the same way, in the end I asked the 7th one whether he could give me the street number, also didn't want to give.
2 days before the auction, the 4th agent called me and gave me the POS and asked me to bid through him. I drove to the house. It was a very basic house with nothing done to it since the day it was delivered. The house appeared to be empty. It wasn't too far away from the house I lived in till I was 11. The RP on it was RM720,000 and market value for it was around RM750,000 but it had a very desirable number which in SS2 makes a lot of difference to some buyers and it faced a playground. The house next to it was a renovated and I checked market value was more than RM1,000,000 for it.
I told the agent I wanted to bid RP for it, he told me don't waste his time. He said he would only do a bid for RM800,000 to which I told him it wasn't worth that kind of money.
I decided to attend the auction myself, there were 9 people there and I knew this was going to see very keen interest.
I sat next to someone who asked me whether I had seen the house, I told him yes I did. He then asked me if I knew who was the one that was living in the house, I told him the house seemed empty to me. He told me he saw someone going in when he viewed. Then someone else that was sitting behind me told me yeah the house was occupied by the owner then they asked me how much I was planning to bid, I told them the RM1,000,000 as it was worth more than that. Immediately I noticed quite a few people turning to look at me.
Surprisingly, when it opened, no one actually put a bid. Then someone placed the 1st bid. I followed and I kept getting outbid till it was RM900,000 I decided to stop the person that had the bid kept starring at me. The auctioneer kept asking who wanted to bid RM950,000 but I decided not to proceed as I had some doubts by then. I quickly left the auction as I noticed several people starring at me.
A month later I was there to view a subsale and noticed the same house had another Auction notice on it. I contacted the number and it seemed it had been moved to another auction house.
The RP on it was RM660,000 and again someone at the auction told me the house owner occupied it as they had checked it. There were only 3 persons present as the other 2 were there for something else. It opened, I won it on a single bid.
That nite I drove to the house and it definitely did not appear someone was living in it.
I settled up and waited for the SPA.
2 weeks after I settled up I drove by and shock and to my surprise there was a Toyota Alphard, a Honda Accord and a Honda Jazz parked inside. The Alphard's plate was the same as the house number. There were also 2 dogs in there.
2 months later everything was settled.
I drove up to the house and rang the door bell, I gave the person an eviction notice. She was a 40-something Chinese lady, she threw the notice and said she wasn't moving anywhere. Said I was the 3rd person to buy the house through an auction.
I offered her a cash for keys deal, she said sure RM500,000 and she would move.
I told her I hoped she wasn't into playing hardball.
She said I better give up as by the time the court hearings were over I would be bankrupt due to being unable to service the house loan. I told her I hope not of course she did not know I had paid in full rather than using a loan.
I decided to do it properly. I applied for a court order but she did not show up.
I checked out her background and she was not a poor person. She had 2 daughters that operated cafes and she herself was an agent selling all kinds of MLMs, UTs and gold investment funds. Sometimes they stayed at the house and sometimes at a condo at Section 17.
Second time, she managed to get a MC from a government hospital.
5 months had passed.
I had the SPA, I changed the TNB and water account to my name, then ordered for the electric and water supply to be terminated. While at the TNB I gave them a tipoff to check the premises where the cafes, the house, her condo and her insurance agency operated from and said I know they were tampering with the electric meter. They were more than happy to go check and 4 days later I checked back with the girl asked if she sent someone to check and whether "ada rezeki" and she said all 5 premises were checked and all 5 confirmed had tampered meters.
Next I bought a cordless angle grinder and gave it to an illegal bangla, told him everyday cut 1 part of the gate. When the police asked what I was doing, I told him it wasn't illegal to modify my gate, showed them the SPA and the title and I told them I wasn't breaking the lock or entering the house. Eventually the gate became a H-shaped bar.
Then I sent a teams of bangla and Indian "security" men to buy a drink at the cafes her daughters owned and just sit there the whole day and to talk as loudly as possible and to use the free wifi to browse porn with the volume turned up. Did that 3 days in a row and on the 4th day neither opened. On the 6th day it opened and I sent them again. After a week, the cafes which usually had 6-10 customers at any one time and a full house at lunch was empty.
The cafes then closed for a month with a sign stated owner went for holiday. It never reopened after that closure.
I then showed up and asked her whether she wanted to attend court or she wanted to move out or she wanted to continue staying. She said she would never move out. I told her okay I wasn't in a hurry and had all the time in the world.
I had a court date and she pulled the very same trick again, had a government clinic MC.
I called up one loan shark who stuck stickers nearby, asked him if he could help me do some work. I had him visit her place to ask about how he could sell products for her. She invited him to one of the induction seminars.
He showed up the next day and demanded she settle debts and said she had a lot of debts to settle, then left.
The next day he told her sorry as his boss sent him the wrong address and wrong person. The damage was done.
A week later I asked another loan shark to do the same trick and this time also to disturb her at their condo.
14 months passed since that winning bid and I had another court date.
A week before the court date I asked for help from another source. I had a tow truck callman disturb her 2 daughters and told them RM500 per success. I told them specifically no death or injury of any kind. 2 days later I received a Whatsapp of the photo of a badly damaged Alphard, I asked what happened, was told "kena langgar lori hantu" I asked if it is a total loss, he said "Bang!! Mau total loss mesti bayar lebih" He said must pay double if the results I was after was a total loss. I told him to get to work. 2 days later a picture of a very damaged Accord was on my phone. He said he would meet me for the money and quickly deleted the photos. I asked him if he could run a "taxi" service, he said confirm boleh.
By this time, the electric and water had been reconnected and she was staying at the house.
Day of court, 7am she tried leaving the house with 1 of her daughters. I knew very well where they were going to, they were off to the hospital, except not this time. Their gate was blocked by a tow truck, I had a teams of 3 men in 2 Hilux separate them and drove the lady to court and the daughter was driven somewhere else. While on the way to court they made a call and had the daughter tell the mother what exactly needed to be done.
Court was 9am, she walked into the court and told the judge she would move out within 24 hours.
Next morning at 10am, I drove by the gates were open and the house was empty.
Toilets were filled in with pure concrete. Same for the kitchen drainage pipes. Anything made off glass was smashed. Electric meter, fuse boxes all were smashed up and placed was very badly vandalized.
6 months after she vacated, house was fully modernized and renovated. Originally it was my plan to stay there but instead converted it to rent to students.
Why she acted that way? Extremely simple, she had nothing to lose and she knew how to play the system.

Thank you for posting this.
This is a very good insight for all that want to bid for properties. Not everything is smooth sailing as some agents claimed. There are always some syndicate that will try to scam or profit from young naive 1st time bidder