How many properties you have so far???

Hi Phoeni,

1. That's the risk I'm willing to take on SOME of the developments. What I look at is the present MANAGEMENT of the highrise of the same developers elsewhere. The best way is to talk to property agents of CORPORATES, as they will have pockets of highrise in their list which they recommend to their clients. The rental yield/COCR is compared with the surrounding, with a premium given if the location is better/reputable developers in relative.

2. It's definitely safer, the only downside is that it takes a longer time to grab a good COCR unit , and for similar location, and similar rentals, ppl usually go for the new ones. But again, this warrants a longer discussion, what I said is basically a nutshell. And I have a couple of the completed ones as well, but still could not beat the ones I get UC.

3. The established markets have been "batteredly quoted" (I'm not sure if that's even grammatically correct!) ie the DMTB(Damansara,MontK,TTDI,Bangsar). These are the places if you want STABLE inflation proof property for KEEPS. But for investment I'd look elsewhere, especially new townships in "good" locations. Some are like Sri Hartamas (yes! ), Kota Kemuning, Bukit Jelutong, DPC. These are Tier2 to me; considered upcoming and good potential to boom. But landed are only good for Capital Appreciations, as the COCR usually is rather low, unless for some units which commands too high a rent, and the risks of having them vacant is pretty high as well, so to me not with considering as COWS.

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Added on March 8, 2009, 9:13 amWould you be so kind as to share your investment strategy (and to retire at 35)? If public domain is too intrusive, we can discuss off-line

This post has been edited by meejawa: Mar 8 2009, 09:13 AM

Hi Phoeni

You are right on your selection and focus on the area you mentioned. Obviously you done lots of your homework. And yes, when it come to investment, the combination is endless and and even on same area, diff folks focus on diff combo of investment. And that is diversity and diff folks have diff risk/fund threshold.

As for me that area is beyond my budget. My current investment is mainly on equities (unit trust and my co stock purchase) plus the Option given. 2 years ago, I chose to plonk in some funds into a private company as peanut shareholders. Will only able to cash out in the next 5 years. That should give at least a total of 15% per annum.

Return on equities... about 10% per year if I cash out, but recent glut has diluted the return somewhat.... arggh!

So now I want to check up on the property although limited budget which is why Puchong area is what I'm looking at. I need to move out my equities fund once it hit my targeted threshold again. Reading up and checking up some small apt/condo near Jalil area. Not expecting much, but aiming to do rental return and if its giving me at least 7% return on my downpayment(very plausible given current BLR and bank loan package), I'm happy. The capital at the end of the loan period gain will offset the inflation cost by the time I retire, I hope.

This post has been edited by gamenoob: Mar 8 2009, 11:29 AM

Boss you got PM

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Added on March 8, 2009, 12:29 pmNo specific answers, but if you must know ---> Not enough

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Added on March 8, 2009, 12:37 pmSame here

My best investment was an undercon prop, gave me a 6 figure appreciation and above 40% COCR 1 year after CF

This post has been edited by Pai: Mar 8 2009, 12:37 PM

Well, diversity is key mate.

My best investments always get me mid 5 figure or mid 6 figure instant equity at point of purchase. Plus any potential appreciation from there on is just a bonus.

Phoeni, mind explaining what you meant by instant equity?

Sure. Long story short - it's just a fancy way of saying that I buy undervalued.

1. My net worth or equity increases immediately at point of purchase.

2. It enables me to get a higher loan amount, provided both the vendor and I agree to put a higher figure on the S&P vs. the market value.

3. It's so much easier to get a top up from my banker.....I just got an option to top up on one of my apartments after just 4 months of initial purchase.

Classic RK --> Make $$$ when you buy, not when you sell

Got it, exactly one of the reasons I buy UC prop

Not too sure about that chief.....I'm averse to UC prop's.....but if u want to have a higher degree of certainty in terms of making money when u buy - completed prop's offer u that higher degree of certainty. Too many examples, too much to type.

I don't want to list down all the reasons why my philosophy takes me away from UC prop's. I think diversity of views is pretty normal - and it wouldn't be right for me to force my views upon others.

If UC works for you......then I wish u congrats and good luck.

This post has been edited by Phoeni_142: Mar 9 2009, 02:32 PM

UC is very risky to 'play' with especially with those smaller and non-reputable developers.

Abandoned under contruction property is the worst nightmare for every property buyer, which is quite common especially in economy bad time.

That's why some people prefer to pay some premium when a property is completed time as which you see price generally swing to a little upwards compared to its initial launching price after the property finally get its OC or CF.

How do you spot an undervalued prop? And what do you do with it? Do you rent it out?

IMO, undercon risk can be vastly reduced or even "eliminated" via :

1. Go for reputable dev.

2. For the not so reputable ones, due a proper due diligence on the company and its capabilities to complete a project should the unthinkable happens.

For point number 2 - it is a pandora's box, my friend. Let me explain.

1. Financial solvency can't be confused with execution and reputation. There's an old saying, "I'd rather get a B+ or C- in Strategy, but an A++ in Execution". Long story short, how sure are u that the "not so reputable developer can execute? What would u do when the finishing is poor? Or defects galore exists and they fix it at a snail's pace? Unless of course, u mention that this falls within your acceptable risk appetite.

2. Assuming the condo gets completed on time with no problems (I'll pray for u) - this lies my biggest phobia - the management company of the condo / apartment. I seriously hope that anyone that buys UC will do some due diligence here. The Mgmt company of the condo will make or break the condo. Care to share how due diligence is done here?

Very simple my fren, just check their existing/completed projects.

Plus when I say not so reputable, I dont mean newbies. Im referring to developers with less than 3 completed projects to date, not to those who r new to property development.

Of course Ah - I thought u meant newbies.

But if they have nothing under their belt? And everyone is scratching their head asking who this developer is? Would u still go for it? Or if their past projects are so obscure no one has heard of them before?

Newbies are a definite no-no. Reputable ones that I meant, and which I'm into, are the ones in the top 5 of developer's list, and also which are recommended by realestate agents for their MNC tenants, so that takes car of at least some of the buy-and-pray part. Of course, when I was new (and young and reckless), it was an adventure to go with not so reputable but cheap properties. Those were the days which I won't want to go through again, but it was a good learning experience.

By the way, you still have not answered my question on the mgmt company

I'm sure you'll agree that developers and mgmt company is 2 different things.

Developers with 3 projects or not, this is still an issue, my friend.

Plus think of the future when you finally decide to sell off the property... people are always curious about the developer, even if the property has been inhabited for 10 years... you better keep your fingers crossed that the unknown developer becomes reputable in future...

This post has been edited by sklc: Mar 10 2009, 09:49 AM

Same answer boss, just go back to their previous projects.

And yeah, a big NO for developers with maiden projects, irrespective of how cheap the development is priced. This is why I didnt went for Sierra Residence. (Sold for 100k 2 years ago and now commanding 200k for similar unit)