Dr. RE:

good insights. Man I read through 9 pages in the last hour or so. (Yeah I'm stayin out of the Christmas crowds for tonight).

Some brief thoughts.

- good RE agent. I know a few friends who won't mind paying finder's fee for a good agent - can just hand him a list of criteria and then he does the research. Right now, 99% of RE agents here are crap. Just put up some ad, answer the phone half-heartedly. Message to such agents: we can really detect it when you're just looking for a "shui yu" - don't show us the crap houses, quote a high price then tell so many lies and gloss over the flaws. Waste of time. RE agents in the US or elsewhere are much more professional.

- economy. you're right, it will be slow descent for Malaysia. slow to go up, slow to go down, hahaha.

- the rich. Some people have a tons of cash right now. After they lost a bit from stocks, they just pulled everything out. They are all asking about fire sales - all ready to buy, and patient. But like you said, prices won't drop that much like in 97 etc.

- delusion of some house owners. Because they've been living there for a long time, in mostly their eyes they think their house is an absolute gem and everywhere else is no competition. So they want to sell at sky high prices. They would hold on to this inflated idea of the "fair value" of their house. For eg, he wants to sell at RM600K when market is RM550K. If he sells at RM550K-RM560K, he can put that money into FD and get 3.7% a year. Or even pick up stocks or other investments, business that safely get dividend/returns of 5-20% a year. But he will not. He will hold until he can sell at RM600K... 5 years later. (at only 3.7% he gets RM659K in 5 yrs) Some will say he has "holding power" to "wait out the recession". That's bull. I say he could have done much better by looking at all options.

- business. you should write a book. A few people has, abt making money, etc. If I'm not wrong, first RM20K royalty is tax-free. Imagine still earning money when you're doing the horizontal boogie or playing mahjong. I've got first dibs on my booklet, "How to Survive an Economic Downturn in Malaysia" and "How to be a Real Estate Agent" No body copy me, OK??

- real estate portfolio. How did your friend Stanley from Miri structure his portfolio..? All the properties in his personal name, or in a Sdn Bhd? When he went to get the loan, does he have to mortgage some of his existing properties, or the bank just look at the rental income stream to approve the loan for the new property? I don't have anything other than rental income right now from fully paid properties. I'm wondering what is the best way to get access to financing. Any idea?

- your IT business. The sales skills you learned from RE should be useful here. Sell, sell, sell. Especially if you say the product saves money, that will even sell better in a downturn when company wants to cut costs. Really cut down your overheads as much as possible. Show potential clients your spirit and really work for it. Like you said, if you make it now, the experience will be very useful later on, even if the immediate income might not seem like it's worth it right now.

OK.. I can hear the fireworks goin off.. Gonna go watch it. Cheers! Hope to see your reply soon.

Dr. RE:

• Finder's fee - how would this be calculated (dependent on property value or just on case-by-case depending on amount of work?), and what would be a fair amount? If there's a sale, the buying agent still gets to co-broke?

• Age - I'm several years older than you, but still exploring real estate. Helping my family to manage a few places, mostly in Ampang.

• MK - the trend has corrected since mid-year. The Star a few days ago carried an article that mentioned sub-sale prices peaked at RM900, and now dropping from there. Even got a few lelong units already.

• Studios - I heard good things about studios too, the ROI is possible due to not many units available. But prices now seem high. Target tenants are young yuppies who want to live alone in a nicer place or with girlfriend instead of sharing a whole apartment, or lower-paid expats who just want no fuss (less area to clean). So you hv situation where supply is small, demand also small - see which one catch up with which in a certain area!

• ROI - I feel most property investors neglect cukai tanah, cukai pintu, agent fee, insurance, closing costs (loan agreement lawyer's fee, S&P lawyer's fee, stamp duty) and MOST importantly income tax (up to 27% bracket) when calculating nett ROI. I put mine in an Excel spreadsheet. Most of the time, a property sounds good but after factoring all those, positive cash flow become almost negative or less than FD rates. Stocks much easier: no taxes. (on another note, pisses me off what the gahmen do with my taxes. stupid court cases lah, buy helicopter lah, PKFZ lah. Wah lan)

• Rental income: Most goes to living expenses. PJ is not a cheap city for a young(er) guy Am even putting off plans to buy a sporty car that I've always wanted. I'm now saving a bit to look for opportunities in equities, commodities and properties. I like liquidity of equities, and volatility in commodities presents opportunities as well whether it goes up or down. I'm weak at forex - aunties who have time to stare at Bloomberg seem GREAT at forex! Good thing commodities helped me for this year. I wouldn't want to put everything in one asset class. My dream would be to invest in overseas Asian properties, but the cost of entry and management issue is there. What advice would you have for utilizing the rental income?



This post has been edited by hspace: Dec 25 2008, 10:13 PM

Good discussion going on here.

This is directed at our Dr. RE,

1) Is there a conventional figure for finder's fees? Or arbitrary based on case-by-case basis agreed by the agent and buyer?

2) what are your suggestions on how to utilize rental income?

To Danny,

What are these safe investments that offer 6% returns?

Didn't check on this thread for a long time.. Had to read back several pages haha.

I'd also like to add that it's also due to bad laws that favor developers and screw buyers, and also very bad enforcement. Developers in Malaysia very easy to delay completion or run away with no consequences for themselves.

So, the next election, vote for a fair and competent government. Especially talk to your older folks who don't go online and know about all the truth.