u r letting your brain or your heart do the talking here?

Pheoni,

actually i wasnt refering to your post, i was refering to ppl who never even been b4.

ok some background on my own research, I own a endlot in Damansara Kim, bought end 2007, places i went to research and see house include DJ, Ara Damansara, TTDI, BU, SS3, SS1, SS2

Settled on DK cos to me it had the best combo of easy access, low entry costs compared to DU/DJ/TTDI and quieter with beter parking compared to BU (my unit is facing park)

yup, i fully would appreciate a frank non emotional discussions on DPC

here are pros of DPC compared to Ara based on my own thinking, feel free to debate/rebut

- No more landed development (ie in future when DPC condo residents want to upgrade and stay in same area, they will look at existing landed property in DPC)

- Expat community is growing, the expats love developments like Adorra in DPC, and from what i see the expat communit is starting to grow, koreans, brits, french...when the international school is up, should be even better...ARA is unlikely to attract the expat crowd. As can be seen from mt kiara, expats drive up prices

- already developed, Ara is still in its infancy, yes..if u buy in now and it booms 3 years down the road, the potential for gians is very high...IF it booms, DPC is already proven concept, entry price is relatively high...BUT rental yields are attractive due to growing expat comunity

Hi,

I think Damansara Kim is quite a good buy. Have always been a fan of the D'sara suburbs. Just a few questions.

1. Your house dimensions
2. Price
3. Investment / Own Stay

Would suggest u look around DJ - on the KDU side - there may be some bargains there - of course don't buy to near to the cemetary or college. Got one at the Atria side for 440K about a year back. Build up is approx 23 by 93.

Now, with rgds to our discussion on DPC.

1. Agree with you on the expat com build up in DPC. However, I am quite risk averse when it comes to the expat community. There are reasons why I've stayed away from Mt Kiara or Ampang or any expat enclave. It seems to be the flavour of the month. By the way, anecdotal evidence suggests that the Korean community is already migrating away from Mt Kiara. Look at the Star classifieds. At least 4 full length columns "for sale / rent" every day for MK units. Units in I-Zen experiencing a tough time being rented out. Could be wrong, but it's only a matter of time before MK Aman, Bayu and Sophia start coming down more rapidly.

2. As such, I am quite reserved about the expat build up in DPC. Whilst it may be unlikely today, - DPC could be as speculative as MK in the future.

3. I believe in traditional suburbs where upper middle class families reside - Stable, boring but dependable. That's why I'm zooming in on Ara D'sara (AD)....u could be right - DPC could be a consistent gold mine - just that I see more upside in AD.

4. I must confess i'm not too well versed in the maths in DPC. When u say the rental yields are good....please elaborate. U mean for Zenia, Adorra, Commercial lots??? I'm curious to see how the loan can be structured to get a positive cash flow, given the potential rental. PS - cash flow is the most important metric to me - not yield. Just my own personal view - too much emphasis given on yield sometimes, and it's over-rated. So what if the unit yields 13%? That metric only holds water if u buy 100% cash. As such, please do share your cash flow dynamics, if u don't mind.

See yeah!

1. 22x75, with rear kitchen extension
2. 419k
3. own stay

currently, prices for intermediate in DK has risen to 460-480, with endlots like mine last seen transacted at 500k

lowest i ever seen personally in DK, is fren who bought former bangla house for 380k, about 2 months b4 i got mine

yup, u get much bigger land area for DJ, but I personally dun like the DJ area, and i dun like Atria at all...so i prefer to be next to TTDI

agreed about rental yeilds, positive cash flow is more important then % yield. with 20-25% down, 30 year tenure, you can get positive cashflow from Nadia, not much, in the range of 200-500, but still positive.

I believe you can get higher from adorra. but zenia still very new, too many lots available for rental..so hasnt stabilised yet

MK - never beleived in MK, yes, ppl made hudnreds of thousands, my own cousion made over 300k in under 1 year when he sold his apartment to move to US, but i believe the end of the MK bubble is near, supply is definately more then demand and getting worse



This post has been edited by jwrx: Jan 19 2009, 11:01 PM

jwrx,

At 90% financing, will the Nadia condo still yields u positive cashflow? Else u could get better COCR elsewhere, no?

Actually went to see DPC about a year ago, liked/loved the place and the concept, even checked Nadia, but I walked away due to :

1. Rental yields is low(I use this and COCR as a basic indicator to see if an investment is a viable one, as "positive cashflow" is rather easily tweaked), plus tenant liquidity was an issue back then. No sure how much things have changed in 1 year, perhaps u could enlighthen us.

2. The whole DPC was relatively empty....... and I came away thinking ppl who bought into DPC are mainly speculators. And developments where the huge majority of the purchasers are speculators dont often ends well, unless u have a big pile of reserves to hold the property for a few years. Think this Nadia subsale upon VP was selling at developers price, and it took more than 1 year before price levels actually took off to a respectable levels.


Anyway, good luck in your hunt

---

Added on January 20, 2009, 1:28 amMate,

Cash-flow numbers could be "tweaked" as well . Personally would use COCR as the best indicator evaluate any investment opportunity.



This post has been edited by Pai: Jan 20 2009, 01:28 AM

sry, COCR?

i would say zenia is about 30% accoupied, but i see alot of reno and alot of ppl moving in, adora/southlake/nadia etc all look fully occupied, or at least above 80%. yup alot of specualtors bought the initial units, my agent said majority of her clients bought 4-5 units and ABOVE but now, looks like the real residents/renters have moved in to most of the older phases, only Zenia still looks empty

You should take a look at it now. It'll answer the bold part.

As for ur previous post on the traffic jam, I seriously doubt there is traffic congestion there except in Jln Kuching towards Kl during peak hour. Other than that the LDP seems fine even during peak hour. Anyway, since you are not living there, how would you know there isn't other accesses?
I ain't speculators or investors but I live near DPC for a long time, funny how i never experience those traffic congestion that u mentioned.

As i mentioned earlier, there are 2 access road in DPC, one in Taman Sri Bintang and the other main entrance at the round about beside metro Prima.

Relatively, congestion will always be the case for developed area during peak hours. However, i believe that there should not be any much congestion in kepong area as there are few access raod we can choose:-

1] Exit to LDP towards PJ/KL/Batu Caves
2] Exit to Jinjang
3] Exit to Segambut towards Mont Kiara/Jln Kuching/Komplex Kerajaan

Relatively the traffic in/out Kepong area will be fine during normal hours.

However, the main concern was the Access road into DPC at the roundabout, judging from a heavy development in the area near the round about, metro Prima, Manja Villa, Park 19, Sunway, and some new Condo at Menjalara, more and more vehicle will access to LDP using this aroundabout. For DPC, having an access road in front of the round about may face some difficulties once the area mature. The goodside, they have access road at Taman Sri Bintang.

So expect the roundabout to be congested in the future and access through Taman Sri Bintang.

I would opt for a price drop in DPC in this long battle recession - 20%. Would ppl be affected? High Medium Income group?

Developer may offer 5/95 or 10/90 package, therefore slow inflation for sub-sale in the area.

Anybody heard whether DPC will offer this package in mean time?

Please take this as reference only.

Mate,

1. Who says I "tweak" my cash flow? Sendiri Shiok - cheat myself? For what?

2. Don't know what u are getting at - Maybe I was speaking too loosely then - COCR is the most important metric for me anyway - i just summarized it as CF (If u read my previous posts on other topics - I've always advocated COCR. By the way - +ve CF is a variable which u use in your COCR computation anyway. I only put a maximum 10% down. - So the COCR will tend to take care of itself.

---

Added on January 20, 2009, 1:15 pmSorry - I'm rushing for meetings - so no time to answer on DPC, but i'll tackle our debate on DK and DJ first.

There's no right and wrong. It's all about personal preference.

1. DK is old - my own perception is that I find the place a bit run down....yes, good for u that the price has appreciated....like i said.....whatever works for the investor, correct?
2. I like Atria - why? It's dead and quiet - never could understand why a place is considered "sexy" because a bustling One Utama is next door.
3. For the record, my unit is facing the big field at DJ, not Atria. Unit next door has just transacted at 680K. Up 200K in 2 years - who says old areas don't have potential, eh
4. DJ is now fully guarded with checkpoints and patrols - as opposed to DK.

will respond later on DPC.

See yeah!



This post has been edited by Phoeni_142: Jan 20 2009, 01:15 PM

Mate,

1. I never said u did it, im just sharing what I know on cashflow as not many ppl realised that one can always tweak and rationalise cashflow even on lousy investments

2. We r on the same page on COCR. While COCR is the best measure to calculate ROI, again i'd like to highlight that one can always tweak the variables that form COCR. Someone I knew even able to get above 50℅ COCR p/a, and I doubt that this is replicable to everyone who bought the same development.

---

Added on January 20, 2009, 3:43 pmI dont live nearby so Im not sure what is the normal day's traffic's condition. I went to DPC from 1U on a weekend a year ago, and the traffic wasnt very smooth. Maybe it was an exception, I dunno.

And FYI, im saying that its more congested VS MK, despite the fact that MK has much more population. Perhaps this is due to MK's better accesibility. Hope this clarifies

This post has been edited by Pai: Jan 20 2009, 03:43 PM

Ok,

assuming u get a Nadia for 900K. 25% downpayment is approx 225K.

Using your +ve cash flow per month assumptions of let's say RM350 (Avg of 200 and 500) - this implies a +ve cash flow of RM4,200 per annum

In a very simplistic way, the COCR - is only 1.9% (4,200/225,000) - and i don't think this even includes in maintenance yet!

Either way - even if this includes maintenance fees - a 1.9% COCR is a very very very very poor utilization of your cash.

Are u sure u are quoting me the right variables here? PS - if u really want to be prudent - your COCR must at least be double that of the FD Rate. I aim for COCR of at least 25%. I'm sure Pai aims even higher.

I just checked out South Lake, cost about RM 2k for basic unit rental. semi-furnished costs more.

Levenue is anywhere from RM 4k to RM 7k range.

Too be honest i havnt done that much homework on the rental yields available in dpc yet, but yes your analysis is corect, ie very low cocr

But thats not taking into account 2 facts. 1) COCR isnt our main criteria, we only want positive cash flow for a few years b4 we move in and sell/rent our DK property

2) question of availability, 1-2 years down the road, might come the point where 900k wont be able to get you nadia

hehe keep it comign though...learnt alot in just 2 pages of posts

This post has been edited by jwrx: Jan 21 2009, 09:55 AM

jwrx,

1. The only reason why you r getting positive cashflow is due to the large d/p (aka tweaking cashflow). At 90% financing its a negative cashflow deal. Explains the super low COCR.

2. If the economy tanks, you still think there's ppl who would pay 1mil for a gated DS ini Kepong? If DS in Kepong drops to 300k levels, this Nadia could potentially be worth only 600k, assuming ppl

Well, I stand by my thoughts that DPC is a speculative investment, with strong support by the developer. Real value will prevail once there are no more new projects in DPC, and we'll see if current "market" value holds. You r buying a DSL today for a close to 1mil, with the anticipation that its price will continue to rise over the medium term. Its a very,very risky thing to do IMO, with your odds is just slightly better than playing a high stake poker game.

My 2 cents

---

Added on January 21, 2009, 10:40 amMy exact thoughts, altho I would be contented if I could get anything above 15% p/a. Anything above that is a big fat bonus.

This post has been edited by Pai: Jan 21 2009, 10:40 AM

I think Pai summarized the issues quite well (Please see his post above) - So not much for me to say, really.

jwrx,

I'm just going to offer my personal philosophy to you. In the end, it's still your decision.

DPC could very well go up in price all the way to orbit. In that sense, people like me would lose out. But I agree with Pai's view that the price would flatten out, and it shows elements of speculative play.

Personally, I only focus on COCR. That is of paramount importance to me. I have always said this quote - and i'll say it again. "Appreciation in your properties is an ancillary benefit of ownership".

In other words - any appreciation in my investments is just a bonus. I never buy for potential appreciation. Any eventual appreciation is just a bonus.

The most important is COCR with 10% down - for me anyway.

Good luck to you.

Mark of a true investor.

pheni/pai,

yup, get your points loud and clear, just curious, which properties currently would give cocr of more then 10% with only 10% down?

Due to ego - I made many mistakes when I first started out - I bought a couple of properties in BU and TTDI. And tried as I might - I was bleeding in terms of cash flow profusely - nearly died due to my huge ego. I admit that. The only reason I could sustain was due to good commissions and bonuses I got from my job back then.

I got lucky - prices of my units appreciated phenomenally. I sold one after holding on for nearly 2 years - and built up the equity in my remaining property. Even today - they are only breaking even from a cash flow perspective.

Okay - enough of the sob stories. My wife is the "specialist" in finding undervalued properties. I trust her judgement highly. I then specialise in structuring the deal and then managing the properties.

Our personal tenets:

1. We only buy massively undervalued landed properties - even then I know my COCR will not be very attractive - perhaps just the FD rate. Classic example - my buy in DJ about 1.5 years back.

2. Now, we only buy nothing but undervalued condo's / apartments - again, no right and wrong - i know that potential for appreciation is not as attractive as landed - but the COCR return is superb to the both of us. Plus we can repeat this strategy every 4 to 5 months.

3. I'll give u 2 examples of deals closed in the last 8 months. By the way, we try not to limit ourselves to "area-specific" strategies. It depends on where u find the deals, and whether it gives a super COCR.

(a) Sri Putramas condo, Jalan Kuching - 1,100 sq feet - transacted at 140K (Market value = 210k). Loan taken 120K. Rental = 1,100 (semi-furnished) Mortgage = 600, Gross COC return = 30%, Net return after maintenance = 17%.

(b) Faber Ria Condo, Taman Desa - 500 sq feet, studio. transacted at 120K (Market value = 145k) Loan taken = 108K. Rental = 1,200 (full-furnished) Mortgage = 550, Gross COC return = 65%, Net return after maintenance = 53%.

All those deals above added to our "income" - the extra few hundred per deal adds up when your portfolio grows. It has been great to us both - but still always willing to improve.

Pai & jwrx or anyone - pls share your stories? My wife is always bugging me to read your posts....much to my delight.

This post has been edited by Phoeni_142: Jan 21 2009, 02:15 PM

offer letter for a lot in waterfront is ready, DPC just called...so after the discussions here...i might not be getting a Nadia..but i would be at least working there for the time being

come visit my shop when its ready

Sorry - working there? U mean u have a shoplot there or working there? What business u operating, mate?