How You Can Become a Multi-Millionaire Real Estate Investor!!

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How You Can Become a Multi-Millionaire Real
Estate Investor!!
by Milan Doshi Best-Selling Author Independent
Financial Trainer
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Mastering the 6 Golden Success Rules in Life
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1st Golden Rule

• In order to
• EARN INVEST More
• You First Need to
• LEARN More

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2nd Golden Rule

• Another Way to
• LEARN GROW
• is by
• NETWORKING
• with other like-minded people

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3rd Golden Rule

• EARN As Much as You Can,
• As FAST As You Can

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4th Golden Rule

• SAVE (not necessarily min 10) As Much as You Can

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5th Golden Rule

• BORROW (always ensure Potential
  Returns gt Borrowing Costs) As Much as You Can

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6th Golden Rule

• INVEST WISELY
• As Much as You Can

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• In the Long Run, its not How Much Money You Make
  that will determine Your Future.
• Its how much of that Money You Put to Work
• by SAVING It, by
• INVESTING It (wisely)

Peter Lynch
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RISKS versus RETURNS of Various Investments
Where Does REITs and Properties stand vis-à-vis
Other Investments
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Offensive Investments
Potential Return
FOREX/Options/ Commodities/etc
Hedge Funds (gt30 pa)
Stock Market (20-30 pa)
Property Equity Funds (10 pa)
Bonds/Bond Funds / REITs (6-8 pa)
Inflation
Endowment Policies (2-4 pa)
Fixed Deposits (3 pa)
Risks
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(No Transcript)
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Appreciation of 45 pa over 1 year
(Rights/Divids excluded)
A-REIT(listed Nov02)
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KLCCP Bhd the closest to a REIT
Appreciation of 21 pa over 10 months
(Rights/Divids excluded)
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Benefits of Investing in REITs

• Portfolio Diversification
• - REITs own Multi Properties, Diversified
  Tenant Pool, Different Lease Lengths, etc
• Income Distribution
• - 90 of Net Income is distributed to unit
  holders as dividend. No Tax on Rental Income.

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Benefits of Investing in REITs

• Participation in the Property Market
• - You can own small stakes in big properties
• Professional Management
• - No worries about Tenant and Property
  Management

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Benefits of Investing in REITs

• High Liquidity
• - Can buy and sell as normal shares
• Low-Risk, Stable Investments. Low Correlation
  profile against other asset classes
• Low Transaction Costs
• - Same as per shares

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Market Capitalization of REITs Singapore 2 to
3 (S4 billion) Australia 8 to 9 Malaysia
High Growth Prospects Upcoming REITs Axis
(Offices Warehouse) - listed YTL (Hotel
Shopping Center), Sunway City, Landmarks
(Sg.Wang), MRCB, KPJ Healthcare
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Official versus Unofficial Inflation

• Official Inflation Rate
• Unofficial Inflation Rate

2 - 4 pa
6-10 pa
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• Types of
• Property
• Investment
• Strategies

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• Buy from Developers and Resell Upon Completion
• Important to Buy the
• From the Right Developers
• Right Property Type
• in the Right Location
• at the Right Time Price

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• Sell on Completion
• 2-3 years at
• 20-30 higher
• Repeat the Formula!

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Example
Sell on Completion 3 Years Later

• Book Apt _at_ 500K
• D/P 100K (-)
• Loan 400K

Sell _at_ 600K (?) Loan _at_ 6 435K Profit 165K ()
Gross 165K 100K Profit ------------------
65 over 3 yrs 100K
18.1 pa (compound)
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Disadvantages !!
Price is Cheap but the RISKS you
take are extremely HIGH Makes
Sense to Pay Slightly More to Buy Ready Made.
You know exactly what you are
getting the Risks is much lower
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• Structuring
• Your
• Property
• Portfolio

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5. Raw Land/ Development 4. Commercial
Properties (Shops, Offices, Factories,
Warehouses) 3. Ready Made Buy for
Appreciation (Landed Houses) 2. Ready Made Buy
for Rental Returns (Medium Cost Apartment)
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• 2. Buy Ready-Made Medium Cost Apts Buy for
  Rental Returns
• Rental Returns 7-9 pa
• Appreciation Poor (lt 2 pa)
• Easy to Buy with Zero D/P and ve C/F (suitable
  for beginners)
• Tenant Mgtm will be challenging

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• 3. Buy Ready Made Landed Houses Buy for
  Appreciation
• Rental Returns Poor (3-5 pa)
• Appreciation Good (3-5 pa)
• Total Returns 6-10 pa
• With minimum D/P, you will have ve C/F (Rental lt
  Installment)
• Timing is very important
• HIGH RISKS due to ve C/F

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• 4. Buy Commercial Properties
• Rental Returns 6-8 pa
• Appreciation Good (3-5 pa)
• With minimum D/P, possible to get Zero C/F
  (Rental Installment)
• Location extremely important
• Possible to get Lifelong Tenant
• Suitable for Wealthy Individuals

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• 5a) Raw Land good way for the super wealthy to
  park their surplus funds for their future
  generations

Tip Buy in Areas where the growth is heading
towards
b) Plantation expertise needed
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• 5c) Homesteads
• d) Property Development your ultimate aim to
  make profits of 30-50 per project

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• 6. Buy Basic or Run Down Properties, Renovate,
  Sell Off
• Example Garry bought a run-down bungalow in
  Bangsar _at_ RM1.5m
• Tear Down Rebuilt Furnish RM1m
• Sold 6 months later _at_ RM3.3 m
• Gross Profit 800K for 1 year work

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• 7. Specialize in Abandoned or Haunted Properties
• . if you can find the owners. Restore the
  property back and sell it off.

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• 8. Specialize in Auctions
• All auction properties are sold on a as is,
  where is basis. Clause in the Proclamation of
  Sale stating Prospective Bidders are advised to
  inspect the subject property and check on the
  issuance of separate individual titles/strata
  titles, seek Legal Advice on the Conditions of
  Sale, conduct official parent Titles search at
  the relevant Land Office and make the necessary
  enquiries with the Developers and/or other
  relevant authorities on the terms of consent to
  the sale prior to the auction sale.

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• 9. Buy in Areas where Accessibility is being
  Upgraded
• Example Old Klang Road, Kesas, new Guthrie
  highway, etc

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• How You Can Retire a Multi- Millionaire
  via Properties

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• Goal
• Become a Millionaire by
• the time you Retire by
• buying 1 medium cost Apt worth RM100K every 5
  years
• with
• b) Zero to Positive Cash Flow with the Potential
  for Long Term Appreciation.

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• Assumptions
• 1. D/P 25K (25) so that C/F0
• gt Saving of RM416/mth x 5 years
• 2. Loans _at_ 8 for 20 years
• 3. First Apt _at_ 30 years is own use
• 4. 1 Apt bought for Investment every 5 years
  starting at age 35 until age 55 years
• 5. No Inflation Compound Interest

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Property Investment Time Line
Age 30 35 40 45 50 55 60 FV
Own 1 F 250
Investment 2 F 225
3 F 200
4 F 175
5 F 150
6 F 125
1,125
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Prices of Milans Books
RM69.90
RM49.90
RM39.90