I promised to share another case study on my property investment.

The second property, I found almost a year later after the first investment. It is too slow, I know. I am always grateful to have parents of two extreme sides. When I was planning on buying this property, my Dad says, go slow go slow… Mom says, only one property a year, so slow?

This is at Pandan Perdana – Pandan Heights Condominium. There are 3 development there, all of which are widely known as Pandan Heights. The red block (one of my aunts own a unit there) and the blue block (my mom and aunt own a unit there each) – these two blocks are supposed to be called Bukit Pandan Condo 1 and 2. Lower down the slope is Pandan Heights Condominium (the green block).

This green block is special. Unlike the blue and red blocks, the green block is a mixed of 5-storey walk-up apartments and one block of a 20+ storey condominium. When choosing to buy condos with lift, the higher floor the better and more expensive but the lifts there were malfunction most of the time. (So the higher the better?) Developers choose to sell higher floors at a higher price but as an investor I only look at figures, whichever gives me highest return with lowest cost is a good investment.

For walk-up apartments, the lower the better! Is obvious right? You don’t need to climb stairs so the ground floor is the best. So this property is a 934sq feet (unlike the condo is over 1,000 sq ft), 3 bedrooms 2 bathrooms apartment on a ground floor of Pandan Heights walk-up apartment. The only drawback of this unit is that it is nearest to the rubbish dump. So I went to the property 5 times in a day to “smell”. Not like the free smell by Famous Amos la… but the rubbish dump did not affect the house. In fact, it is even better! So near and it is easiest to throw rubbish!

I also visited the neighbours, knocked on doors to ask who is staying in the unit. Next door neighbour said that the unit on auction was empty for already 4 years. Vacant possession is a blessing for auction properties or else you may need tough actions to evict the tenants.

Let us look at the numbers.



The auction room was filled with so many bidders but for this unit, there were only 2 bidders – another man and I. As the auctioneer announced the property, the other guy went and asked the auctioneer, “How much outstanding fees does this property owe?” The auctioneer of course smiled and said, “You have to do your own homework.”

My homework showed that the property has an outstanding fees of over RM6,000. I knew I need to pay this amount, I have factored in the costs. So I told the man, “Over RM10,000 outstanding!” Yes, I know I bloated the figure.

The auctioneer announced:

“OK Property XX-X Pandan Heights, reserve price RM78,732… two bidders… we start at RM80,000, each time you raise your hand is additional RM1,000!”

The other bidder was quiet, and I was waiting for his move FIRST. After about half a minute silence, and the auctioneer stared at him, me, him and me again… I raised my hand. Auctioneer said, “OK RM80,000… Sir, RM81,000 sir? (looking at that man)… 80,000 going once… 80,000 going twice… and Pandan Heights sold RM80,000 congratulations!”

Painful lessons

Later I found out, if the hammer has not gone down yet, I could actually request if the auctioneer could sell me at RM78,732 because the other bidder wasn’t bidding! That bugger has just jacked up my cost to a freeeeaaakkiinnng RM1,268!!! Not very happy! Anyway, good lesson there for you readers.


The COC return was low. BUT, since the property was empty, I have already repaired and painted the house and rented it out the second week! It is not legal to occupy the property until my name is on the title but no one will come check on the property and summon me, I guess. Furthermore, from the date of auction, all monthly expenses on the property is borned by ME! So, legally the property is mine, just that I need to settle the financing. Some lawyers can advise us on this.

I kept a habit of having all my payslips, EPF, accounts and financial status up to date and all documents readily available even before I go for an auction. Right out of the auction, I demanded a copy of the Proclamation of Sales and brought all documents to banks to apply for loans. I went to 4 banks that day and got 2 offers and I chose CIMB Bank.

One mistake I made was not having a lawyer expert in properties in my team. I actually had but the stingy me refused to pay high price for a lawyer but there goes another lesson! I remember the lawyer I took for this property was the same lawyer for the loan processing, recommended by CIMB Bank. But that lawyer did not know what to do with my property since the developer has gone missing. Her law firm is already suspended after that.

The lawyer was quick to have all the loan documents for me to sign. But took almost a year and did nothing. I almost forgot the property and went on with my life and a month or two I called to follow up. The lawyer said she is doing her work. I said it is better to ask the auctioning bank for extension or else I lose the property, so she said she did.

After a year, and that was almost the time I was about to go to Singapore for a medical check as a procedure to donate part of my liver. I wanted to make sure everything is fine before I went to Singapore. So, angrily, I asked the lawyer and even went to the law firm and demanded ALL documents to be passed to me. The clerk there passed to me all correspondence and documentation. I made a call to the lawyer acting for the auctioning bank. They said they have sent a termination letter to my lawyer just a week ago.

I pleaded to extend and said is not my fault and showed them the loan documents which I signed only two weeks after auctioning date. The lawyer was shocked at my speed of getting the loan but lamented my lawyer’s slow actions. So I wrote to the bank and the bank allowed an extension. I quickly get Chris Tan, a good friend and lawyer at Chur Associates to help me with it. At Chur Associates, everything was done for me and I had the luxury of documents prepared. I only need to sign documents. From informing the bank regarding change of lawyer, finding out my case and caveats till loan approved. I remember signing some final documents right at the hospital at Singapore after the liver donation. My Dad brought me documents to sign.

Do you think I will let the first lawyer go? And losses? I fully paid the first lawyer fees. I do not like to owe people money and took me so long to have a paradigm shift to use OPM (Other People’s Money) to invest. The auctioning bank charged me an 8% for the duration of the process until the loan was disbursed. That mounting to over RM4,000.

So Chur Associates of course, helped me claim the money from CIMB because it was their lawyer. I also claimed from the first lawyer but the law firm sudah tutup! I settled for RM3,000+ (forgot the figure) by CIMB. BUT! Within that year, installment wasn’t paid because loan was not processed yet but I rented out the second week of auction, remember? So for the full year, my income was RM600-R155 = RM445 per month x 12 = RM5,340. I was still making money with the property!

Fast Forward 2013

Forget the past but take the lessons… the property now rents out at RM1,000 per month. It was newly painted and there was a change of management. I helped to do that! Fortunately or unfortunately, the meetings to change management was done right after I bought the property and I helped them a little and appointed the secretary for the joint management body. But I resigned quite immediately as I needed to go to Singapore for the surgery.

Let us see the numbers in 2013


I have not refinanced the property but let us see if I refinance:

BG16-4If I refinance, I am going to take out RM53,000 for my next property investment. So far I have not done so due to my time managing the PJ Utara office for the past 2-3 years. I am back in property investment but government, please la don’t revise property taxes and loans so fast! 🙂

Market value of the property?

BG16-5Conservatively, it is around RM240 per sq ft so mine is at 934 sqft @ RM224,160. If I take RM200,000 as market value, and my current outstanding loan is only RM71,000, I have a net worth of RM129,000 from this property. The first property was RM87,000 net, so my total property net worth is RM216,000.

For an initial RM20,000 (2007) to grow to RM216,000 (2013) (I consider the above property cost RM25,000 as a “nothing down” because I got RM27,000 from the first property after refinancing). That’s more than 10 times in only 8 years, AND with RM471 cashflow per month from 2 properties! I can’t emphasize enough that there is no other investment vehicle which will bring positive cashflow and 10 times returns in 8 years.

Next blogs… I will share lessons learnt from property investments. Enough of case studies (these are past), I will share future opportunities which we can do together.

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