Hi, I’m Ian.
Last week, I had lunch with Mark Chua, an inspiration to tens of thousands of hardworking souls who desire to build a successful career and to amass a multi-million Ringgit property portfolio in Malaysia. Presently, Mark is on a mission to spread a message of financial hope via his bestselling book, ‘Who Says’, his workshop ‘Beyond Property Masterclass’ and pioneering his social enterprise known as ‘The 925 Group’.
During lunch, he shared, ‘A student of mine asked me, ‘What’s the cost that I would incur if I sell a property?’ Honestly speaking, at that time, I was pretty stunned and didn’t know how I should response. But also, I did realized that I have not sold any property in my portfolio over the last 17 years.
‘Why not?’ I asked.
Mark explained, ‘Well Ian, you know Warren Buffett right? He is also an idol of mine. He doesn’t believe in selling his stocks and holds them forever. If the businesses that he invests in are good, stable, and are generating sustainable returns, then, ‘Why should he sell?’ Warren would rather let his returns from his stocks to compound over time. I apply the same principle to my property portfolio.’
I nodded in agreement as I am a fan of Warren Buffett and invested in a stock portfolio using the same principle.
Mark continued, ‘The student then asked, ‘But, if I don’t sell a property, how will I be able to buy other properties which are better? After all, isn’t okay for us to sell a property in order to buy a new property which can potentially be generating higher returns?’
By now, I’ve realized that my lunch is now worth its weight in gold. Mark is now in the mood of pouring his wisdom in property investing. As for myself, it is always good to be at the receiving end of this kind of ‘blessing’.
And, Mark proceeded, ‘So, I answered this student of mine, ‘Do you actually reckon that your earlier properties are mediocre and we can always hunt for better deals? Property investing, for me, is long-term. Long-term investors do not chase the latest fads year after year or be excited over hotspots where the properties have ‘potential’ to pancut (rise) upwards by 40% or whatever. For me, I buy properties in areas with a proven track record.’
Mark went on, ‘Then, the student asked, ‘But Mark, aren’t properties located at matured or stable areas expensive?’ So, I answered, ‘Not really.’ Ian, as you know, my properties are located mainly in Petaling Jaya and certain suburbs in Kuala Lumpur. So, I asked my student, ‘Bro, if you checked the iProperty website, can you find properties that are selling under RM 500k?’ With that, I find that all students in my class are convinced. Some are even hopeful that they could actually hunt for affordable property deals in the Klang Valley.’
Mark continued, ‘The student asked, ‘Mark, how did you raise funds to buy new properties?’ Here, I gave him 3 methods:
#1: Boost Your Earned Income
Here’s my motto: ‘The More You Earn, The More You can Invest & Leverage’. That way, you can continue to buy new properties without forcing yourself to sell any of your existing properties.
I’m a serial refinancer. I cash out on my property equity. There are two benefits from it. Firstly, I maintain control over my property. Secondly, it is cheaper than selling a property as I incur the loan agreement fees and stamp duty on the incremental cash out amount.
#3: Joint Venture Partners
After reaching a certain scale, I do co-invest with 1 or 2 trusted Joint Venture (JV) partners. It’s key for capital and resource efficiency. But, with that said, I don’t believe in JV’s with 20 or 30 people. I believe, it is important to have quality partners over quantity of partners.
With that, an hour went by in a breeze. Mark had to make a move and thus, ending a lecture on property investing for the day.
If you are reading this, both KC and I have recorded and uploaded a 1-Hour Live Webinar with Mark Chua on the ‘6 Simple Ways to Boost Your Income & Property Portfolio’. Here’s the link:
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