How to own a free house in Malaysia

This is what happens when you refinance your house in a down market.

2011-10-30T18:45:00.000-07:00

Thank you Rich Dad!

Did you notice that his house was big and beautiful?

2011-10-19T18:29:00.000-07:00

http://www.ntv7.com.my/7edition/local-en/WORK_PRESSURE_DRIVES_ENGINEER_TO_SUICIDE.html

It probably costed alot and hence, the pressure to pay his installments.

My condolences to you Foo Yong Lee.

I wished you had taken the red pill instead.

Lost tapes of Robert Kiyosaki

2011-10-01T04:59:00.000-07:00

3 hours of a Robert Kiyosaki video seminar.

Robert Kiyosaki speaks to a group of graduates on how to adapt to change.

People have to recognize the cynical side of themselves and the common 'Buts' which often pull them back.

The program highlights this issue in discussing what an individual can do for himself, company or family to ensure a bright future. It points out the need for perseverance and an ability to recognize unique talents and gifts and looks at the difference between money and wealth.

Link

Millionaire next door book

2011-09-04T04:53:00.001-07:00

Those in favor of global warming, say I !!!

2011-06-23T18:21:00.001-07:00

Yes. It's Friday.

Looking for a career change? How about becoming a landlord?

2011-06-22T18:13:00.000-07:00

Read these articles from mainstream media like Wall Street Journal:

http://richdad.com/Resources/Rich-Dad-Blog/June-2011/Apartments-and-retirement.aspx

http://online.wsj.com/article/

Tan Yang Po, my heroin....

2011-04-24T02:39:00.000-07:00

When supply is more than demand, a bubble would burst

2011-04-18T20:06:00.001-07:00

Sometimes people say money is not everything...

2011-03-13T18:25:00.000-07:00

I beg to defer....

A billion dollars IS cooler than being cool. End of story.

Listen to an engineer that has a Harvard MBA who used to be a hedge fund analyst.

2011-03-02T04:31:00.000-08:00

I hope your house appreciates at least 1.5% year on year wherever you are. God bless you.

Are you passionate about building a better future for your family?

2011-02-05T21:48:00.000-08:00

A life that is debt free,
A life of providing a roof over other people's heads,
A life of giving and serving,
A life of fulfillment.

Savers are losers

2010-10-04T19:08:00.000-07:00

Robert Kiyosaki had said it many times that if you put your money in a fixed deposit, you are at the losing end.

Here's why:

http://www.starproperty.my/PropertyGuide/Finance/7358/0/0

Rental properties are the holy grail to financial freedom.

The root cause of choices.

2010-09-05T18:42:00.000-07:00

A professor of Business and Research Director at the Jerome A. Chazen Institute of International Business recently mentioned that asian children tend to make decisions based on what their parents tell them.

Here is the lecture:

So it's very important to understand where we come from when we make a decision to buy a house.

If our parents from the past baby boomer generation tell us that a house is an asset, we would eventually make a mistake in today's economy especially when there is more volatility in the markets compared to the previous decades. It is no longer a fact that property prices will continue to rise if supply of houses is more than demand. Look at the Selayang area in Selangor.

Here is Robert Kiyosaki giving a lecture on the choices people make in order to be rich or poor.

Have a nice day.

Good news for rental property owners!

2010-09-05T18:38:00.000-07:00

Have you noticed that the government is FOR business owners and NOT for home owners?

Recently the government had increased the amount needed to downpay for a house in Malaysia. From the previous 10% needed to the new 20% needed.

This would mean that lesser people can afford to buy a house and decides to rent instead. This move is really a boost to the rental property industry.

Here is the full story:

PETALING JAYA: Several groups are up in arms over a proposal to cut housing loans by 10% from the current cap of 90%, saying that the move will only discourage Malaysians from buying houses.

National House Buyer’s Association (HBA) and Federation of Malaysian Consumers Associations (Fomca) cautioned that the proposed home loan reduction to 80% would only be a burden to potential house buyers.

HBA honorary secretary-general Chang Kim Loong said the proposal would go against the Government’s plans to encourage home ownership.

“Young professionals who are just starting out will be deprived of buying a home for themselves. How are they going to get the 20% upfront payment?

“That does not include the legal fees and stamp duties house buyers have to pay,” said Chang when contacted yesterday.

He said the move would only be good if it targeted high-end buyers, as an effort to deter speculation.

On Sept 2, StarBiz reported that Bank Negara was engaging with banks on possible measures to curb excessive speculation on property prices.

One of the measures discussed was whether the central bank will be capping the loan-to-value ratio (LVR) for mortgages at 80% in order to avert the risk of a potential property bubble.

Currently, most banks provide loans of up to 90% of the value of the property.

Fomca secretary-general Muhd Sha’ani Abdullah urged the Government to ensure there was enough affordable housing available first before implementing such proposals.

“40% of the workforce earn up to RM1,500 a month. If this proposal were to be implemented across the board, how are they going to afford houses?” he asked.

Gerakan vice-president Datuk Mah Siew Keong said that if the proposal was applied across the board, the property market, construction industry, housing and real estate industry, and economic growth would slow down.

“Bank Negara must study the plan carefully, as the present limit of home loans of 90% has helped the housing and real estate industry,” said Mah, who is also the party’s economic development bureau chairman in a statement.

Housing and Local Government Minister Datuk Chor Chee Heung, however, said the measure would not dampen the housing market as in the long-term, it would actually be a healthy growth for the industry.

Banking sources said Bank Negara might consider discontinuing the 5:95 and 10:90 housing loan packages and impose higher downpayment for property purchasers.

This was due to a surge of between 10% and 30% in the price of landed properties in some parts of the Klang Valley and Penang.

Source

Response to: Doctor’s dream to buy condo dashed

2010-09-04T22:10:00.000-07:00

This letter was written to the Star papers today. Source.

I’m a medical doctor who has been working for many years in Malaysia. I intend to settle down in this beautiful and peaceful country after retirement from government service in Malaysia.

When I planned to purchase a condominium unit for RM320,000 in Petaling Jaya, I was told that foreigners were only allowed to purchase residential properties at a minimum price of RM500,000.

The lawyer explained that the previous minimum price was RM250,000 until last year.

Being a government servant, I cannot afford to purchase a residential property worth more than RM500,000 as I have spent a lot of money on my children’s education.

I must also have some savings after retirement, right?

My dream of settling down in Malaysia is now effectively dashed by this new regulation. I’ll never be able to own a house here.

If I continue to stay in this wonderful country, I’ll end up renting a house for the rest of my life even though I can afford to buy a condo worth RM320,000.

Is there anyone in authority who can help me?

Maybe they can consider my problem on a case-to-case basis.

DESPERATE,

Petaling Jaya.

__________________________________________

Here is our response.

Dear Doctor, have you read Rich Dad Poor Dad?

1. A house is not an asset. Why do you insist that you should buy a condo worth RM320,000? Do you think that this property would appreciate in price? How do you really know? Is it because your agent said so? Is it because your colleagues, neighbours and family members said so? Why do you like to gamble with your future when you don't even have enough time left?

2. When you rent for the rest of your life, you are actually freeing your monthly cashflow to buy more than 1 property.

3. If you can afford RM320,000, why don't you split the money into 3 rental properties around the KL region. There are many auction houses still waiting for you to buy. Just look at the offers on the right hand side of this blog.

4. When you own 3 rental properties, you can actually increase your income and would have enough passive income from the rental income to pay for your rental for the rest of your life. Now please don't complain to me about fixing toilets and all. WHat's important is the rent checks coming in every month.

5. Do you think that buying a RM320,000 property is a good savings plan? Think again.It's suicide if you stop working and there is no more income to pay for the monthly installment.

If ONLY this doctor is internet savvy enough to stumble upon this website to read this solution.

Good luck and may you live long and prosper.

Ladies, this one is for you:

2010-09-01T18:40:00.001-07:00

1. Your house is not an asset if it is not rented out.
2. Why take a 300k to 400k loan to buy 1 house so that you would owe the bank 50% of your working income for 30 years?
3. Why don't you take the same amount of loan and buy 3 to 4 rental properties instead and let your tenants pay the mortgage for you?
4. Why do you think that buying a brand new house would appreciate in value just because the developer/real estate agent said so?
5. May you live long and prosper.

A real estate bubble in Singapore???

2010-08-18T01:15:00.001-07:00

You gotta be kidding me!

http://www.youtube.com/watch?v=dPd7VtVjmpg&feature=related

This guy decided to buy houses and sell them at a profit with no intention of

2010-08-17T20:32:00.000-07:00

renting the houses out for positive cashflow.

He bought 8 houses in 8 months and borrowed USD2mil from the bank.

He could not sell the houses in time because of the sub-prime market crash.

Here's an explanation on why people think that

2010-08-03T19:53:00.000-07:00

their house always appreciates in value and would not sell their house even if it's experiencing negative equity.

78,000 people have watched this. Have you?

2010-08-02T19:41:00.001-07:00

News flash!

2010-07-29T18:37:00.000-07:00

PETALING JAYA: EPF members will be able to use their future and current savings to apply for a larger housing loan beginning Sunday.

EPF chief executive officer Tan Sri Azlan Zainol said the Flexible Housing Withdrawal facility is designed to give those who qualified greater purchasing power.

“Members will now have a chance to realise their dream of a better home for their families via increased home loan eligibility.

“What’s more, Flexible Housing Withdrawal does not in any way affect a member’s retirement savings as the sum that has been set aside under this facility will continue to earn yearly dividends paid by EPF,” he said in a statement here yesterday.

He said members could transfer part of their savings under Account 2, which is utilised to buy a house or reduce a housing loan, to the Flexible Housing Withdrawal account, followed by a monthly transfer of a specified amount of contribution.

“Savings that have been set aside under the facility cannot be withdrawn or utilised for any other pre-retirement withdrawals, such as Housing, Education or Medical before the end of its term.

“However, members can still utilise the remaining savings in Account 2 for other pre-retirement withdrawals,” he said.

Azlan said the facility was in support of the Government’s objective to enhance the quality of life of the rakyat in the spirit of 1Malaysia.

“To date, Maybank and Public Bank have confirmed their participation in the facility and we expect more banks to follow suit,” he said.

Under the facility, EPF members, who have not withdrawn their savings under Account 2 to purchase a house or reduce a housing loan, can apply for their current and future savings to be taken into consideration when applying for a housing loan with a financial institution.

The facility was announced by Prime Minister Datuk Seri Najib Tun Razak when tabling the Budget last year.

Azlan said the facility was available to EPF members below the age of 54 and must be applied together with their application for a withdrawal to purchase or build a house or reduce a housing loan.

Each application is to be submitted by the EPF member to the financial institution from which he is obtaining the loan.

All application forms would then be submitted to EPF by the banks.

Those who wish to cancel the Flexible Housing Withdrawal facility can only do so after a year from its commencement date and upon consent from the respective financial institution.

For more information, visit the nearest EPF branch, contact its call centre 03-8922 6000 or go to myEPF website at www.kwsp.gov.my.

Source

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Here's a tip. Why put your money in EPF to get 5% return when you can put your money in a rental property that cashflows a yield of 8% per annum and has a capital gain of no less than 3% a year?

It's time you invest on your own.

This may be a repeat. But the principle still stands.

2010-07-23T08:49:00.001-07:00

Your home is not an asset, it's a liability where as RENTAL properties ARE assets.

My sifu had just sent me a new video. Enjoy.

Your House is an Asset from Rich Dad on Vimeo.

Get Out of Debt from Rich Dad on Vimeo.

How far along are you from financial freedom?

2010-07-04T20:03:00.000-07:00

The common mindset of people

2010-05-10T19:55:00.000-07:00

You see, ask anyone on the street to choose between a brand new house and a second hand property, 9 out of 10 people would rather pay PREMIUM price for a BRAND NEW HOUSE rather than to pay 30% to 50% lower for a second hand house. Perhaps it's a status symbol to own a brand new house? But what happens when developers play you out? Who is the greater fool then??

Read this:

BUTTERWORTH: Several house buyers in Taman Ampang Jajar here had a rude shock when they checked the houses – the outer frames of their windows were made from polystyrene.
A buyer, Lee Kim Tatt, 35, claimed that the polystyrene pieces were covered with a thin layer of cement.

“What would happen if a person steps on the window sill, thinking that it was made of concrete?” he asked when Seberang Prai Municipal Council (MPSP) president Mokhtar Mohd Jait visited the project site yesterday.

A representative for the project’s architect said the frames were merely decorative pieces that should not be stepped on.

Another buyer, Yan Wei Seong, 33, claimed the houses did not follow the original plan as per the sale and purchase agreement (S&P) signed in 2006.

“Some units in a particular row have double steps leading to the back lane while some in the same row only have one step, which shows that the ground is uneven,” he alleged.

Barisan Nasional’s Bagan parliamentary constituency co-ordinator David Chua, who was present, said he was surprised that the relevant departments and agencies had given the green light for the MPSP to issue the Certificate of Fitness (CF) to a majority of the units in 2008.

“How could the CF be given when some of the units are not in good condition?
“Access to these houses is also blocked with hoardings and there are no street lights in this area,” he said.

Mokhtar said the developer had agreed to extend the defect-liability period for the housing units by another two years.

“Disgruntled house buyers are advised to list down their grouses, so we can hold further discussion with the developer.

“We will try to come up with amicable solutions,” he added.

Mokhtar said of the 101 housing units, 22 units as well as 17 shophouses had yet to receive their CFs, pending approval from the relevant departments and agencies.

Source

Have a nice day.

Esther Duflo: Social experiments to fight poverty | Video on TED.com

2010-05-03T19:36:00.000-07:00

You see, money does not solve poverty. Ideas do. Here's why:

Esther Duflo: Social experiments to fight poverty | Video on TED.com

Easy solutions to big problems

2010-04-15T18:57:00.000-07:00

KUALA LUMPUR: Do not break into your own property even if your tenant fails to pay the rent. It could be a trap.

This was the warning given by MCA Public Services and Complaints Department head Datuk Michael Chong to landlords who were thinking of doing this to reclaim their property.

Chong said any move by a landlord to break into the property, even when the tenant failed to pay the rent, was against the law.

He said many landlords had been brought to court by tenants for breaking into their properties and were sued for the loss of their tenants’ assets including cash.

“This could be a trap laid by tenants who are looking for easy cash. They could be conmen,” Chong told a press conference at his office in Wisma MCA here yesterday.
In the past three months, three such claims were made by tenants – all of them Malaysians – against their landlords.

Their claims amounted to a total of RM117,000 in cash and assets.
During the same period, he said he received 12 complaints of tenants who failed to pay a total of RM57,000 in rent.

Lawyer Leong Pak Yiew, who is a member of the department, advised landlords facing this problem to file for a distress order at a court.
“Under this order, landlords will be able to legally seize the premises and the tenant’s rent will be recovered through auctioning all assets found within it,” he said.

However, this process could take up to two months and might be costly in terms of legal and court fees.

Source

--> well according to a very experienced friend, what he would do is just lock up the house when the tenants are not around. End of story. Why the stress?

Why should news like this stop you from making your millions in rental properties?

Remember, you are bigger than your problems.

Now go play.

Why do people still think that a house is an asset?

2010-02-26T02:41:00.000-08:00

It's because it's a "last mile" problem!

To study big questions such as "What are the measurable effects of corruption?"" Sendhil Mullainathan and his collaborators look at the day-to-day decisions made by real people, running deep-data studies on groups around the world to tease out patterns.

Awarded a MacArthur ""genius"" grant in 2002, he has produced and collaborated on a string of research papers that make for a must-read CV -- including a fascinating, if dispiriting, study of the corruption involved in getting a driver's license in India.

Lately he and his team have been studying women who sell fruit and vegetables on the streets in developing countries.

They're usually in debt to a moneylender in the market, who takes about half their profits each day as interest. Some of the women have figured a simple way to get out of debt and keep all their profits.

But most of the women make a choice every day that keeps them in debt.

How would these businesswomen behave, he wondered, if the slate was wiped clean?

So he got a grant, paid off their debt, and waits to see what happens next."

"R&D in the poverty space has huge potential returns and there is too little thinking about that."

Sendhil Mullainathan

Welcome to the new age of thinking, think rich!:

2010-02-21T05:01:00.000-08:00

These are words of wisdom from my sifu, www.milandoshi.com

Renting May Just Makes More Financial Sense by Milan Doshi

I was invited to speak in Kuching and Miri last month and it was interesting
learning about the property market there. As I had been to Kuching a few years earlier, I frankly commented to my audience that not much has changed in Kuching by way of new buildings. In fact I hardly saw any big office buildings or hotels or shopping centres under construction in both places.

This is in stark contrast to what has happened in Kuala Lumpur in the last few
years. If someone last visited Kuala Lumpur 3 years ago, today he or she would hardly
recognize the number of new buildings that has sprung up especially in the KLCC and
Mt. Kiara areas.

A bit of background information first. Most of the participants in Kuching and
Miri are staying in their own landed properties, the most popular being 2 storey link
houses. Condo living has not and will probably never take off due to the abundant land supply. In both places, the average price of a 2 storey link house in a decent
neighborhood is around RM500,000. When I enquired what the rental rate would be like,
I wasn’t surprised to learn that it would be in the range of RM1,000 to RM1,400 per
month. Also, the price appreciation of such properties in the last 10 years has been
negligible when compared to the Klang Valley.

If you are living in Kuching or Miri or other similar places, would it make sense
for you to be a home-owner / landlord or a tenant? Let’s work out the numbers:

Scenario 1: Home Owner
Purchase Price = RM500,000
Down-Payment = RM100,000 (20%)
80% Loan = RM400,000
Installment at 5% pa for 25 years = RM2,400 per month*

As a home-owner, it will cost you RM2,400 per month in bank installments.
As a
landlord, if you rent out your property at RM1,200 per month, you will have a negative cashflow of RM1,200 per month or RM14,400 per year. Your property needs to
appreciate by this amount every year for you to just break-even.

Scenario 2: Tenant
Instead of buying a RM500,000 landed property in Kuching or Miri, say a person
decides to be a tenant there and invest in a Condo in the vibrant Klang Valley instead.

Purchase Price of Condo = RM500,000
Down-Payment = RM100,000 (20%)
80% Loan = RM400,000
Installment at 5% pa for 25 years = RM2,400 per month*
Assuming Rental of Condo = RM3,500 per month
Cash Surplus from condo = RM1,100/month

Rental to Pay Landlord in Kuching/Miri: RM1,200/month

Place as a Footnote
* Note: The formula in Microsoft Excel is “=PMT(0.05,25,-400000)/12”.

The answer has been rounded up to the nearest 100

Hence there will be a slight negative cashflow of RM100/month which is
negligible in my opinion.

You are essentially using the positive cashflow from your condo to pay for the rental for your double storey house.

From a financial point of view, Scenario 2 makes a lot more sense as there is a
tendency for prices in the Klang Valley to increase faster than prices in other parts of Malaysia. Hence it’s better to invest in the Klang Valley and rent in other places.

When I challenged all the participants at my Kuching/Miri talks to sell off their
homes, invest in the Klang Valley and become tenants instead, most will not be able to do it, at least not right away. The reason being they are too emotionally involved with their homes having gone through a lot of trouble and money renovating it to their liking, having stayed in the same neighborhood for many years, some harbor fears that their landlords may ask them to vacate overnight, etc.

They may consider doing so in the future if they needed to sell their current homes to upgrade to a bigger house.

Advice for Beginners

Most men will be under pressure from their prospective in-laws to own their own
home before settling down. Also, the first property most people purchase is usually their own home.

Personally I feel that this is a big mistake most people unwittingly make.

Many times, your own home may not necessarily be the best place to purchase an
investment property like in the case of Kuching and Miri highlighted earlier.

You are far better off investing in a better location and instead rent in your chosen area.

Another common mistake some young newly married couples make is that their
first property is a landed double storey house. Assuming they are both working and living on their own, they really don’t need such a huge space yet. They might as well stay in a small apartment for a few years and later move to a landed property once they start a family.

In fact, I would even recommend renting for the first 10 to 15 years of your
married life and invest elsewhere instead. As your children grow up and start schooling, the ideal home location for your family will change. When your children are toddlers, you may want a home nearer your parents or baby-sitter. Later when they start schooling, it may be better to move to a place nearer their school, etc. Also, it’s fairly common for people to switch jobs and companies during the first 10 years of their working life.

Hence if you are renting, you will be more open to relocate yourself nearer to your place of work instead of spending long hours traveling to and fro.

Advice for People Staying in Expensive Locations
For high-end residential properties, renting may be a cheaper option than buying.
For example, double storey link houses in Bangsar are going for RM950,000 whereas the
rental rates for unfurnished houses there is RM2,500 per month. If you wish to stay in Bangsar, will it make more sense to buy your own house or to rent?

In this case, it is actually cheaper to be a tenant instead of the owner. You might
as well use the RM950,000 and invest in a commercial property somewhere else instead.
Assuming a return of 7% pa, the rental from the commercial property will be around
RM5,500 per month. After paying the RM2,500 per month to your landlord, you are still
able to pocket an additional RM3,000 per month!

Advice for Business People
I once had a participant who wanted to know where would be the best place to
purchase a commercial property where they could use the ground floor for their jewellery business. They had a budget of RM3 million for this purpose.

I frankly warn them they should try not to get the two mixed-up. Many times, the
ideal location for their jewellery business may not be the ideal location for a commercialproperty investment, and vice-versa. Further, instead of purchasing, it’s advisable to rent for your own business use. In case the location does not turn out to be suitable for your business, you will be free to move to a better one. Had you purchase your own unit, you will be much more reluctant to move out and that may ultimately affect your business in the long run.

If you have any comments on this article or questions, please email to me at
achievers88@yahoo.com. I would highly recommend that you sign up at our moderated
getrichbook egroups at:
http://finance.groups.yahoo.com/group/getrichbook/

It's free for all my book readers and readers of this article. Only relevant emails
pertaining to finance, property and stock investments will be approved for broadcast.

Article Contributed by
Milan Doshi
Financial Trainer and Best Selling Author of
“How You Can Become a Multi-Millionaire Real Estate Investor!”
For more information, visit www.milandoshi.com
Copyright by Milan Doshi

This guy could not have said it better.

2010-01-06T07:31:00.000-08:00

From welfare to millionaire. Impossible? Believe it.

2009-12-17T06:49:00.001-08:00

Watch video

Listen to the guru!

2009-12-13T04:43:00.000-08:00

Let me quote him:

"There are 2 types of investors. One who invests for cashflow and one who invests for capital gains. 90% of the people invest for capital gains. Cashflow investors invest in good times and bad times"

I dont recommend flipping houses

2009-09-30T06:59:00.000-07:00

I'd rather go for cashlfow. Buy a house and let it cashflow for the rest of my life...

Wow, just wow

2009-09-26T06:41:00.001-07:00

BLR-2% loan of 40yrs Vs BLR-2% loan of 30yrs VS 4.85%fixed rate loan of 30 years

2009-09-02T05:41:00.000-07:00

Say you have found a house which has a market value of RM120k and you managed to get it tenanted at RM650 per month for the rest of your life.

How much cashflow would you get based on the type of loan you take?

Most people have the perception that they make more cashflow if they take a fixed rate loan.
However fixed rate loans only have a max payment time of 30 years. Therefore you can only stretch your monthly payments based on 30 years.

On the flipside, major banks today are giving rates of BLR-2% which is the lowest in history. On top of that, you may take a loan of 40 years if you are young enough. Theoretically, you may stretch your monthly payments thinner if you have 40 years.

Let's perform a case study on which type of loans you should take to make the most cashflow.

Inputs:

House price: RM120,000

Rental income: RM650

Down Payment: 10% of 120,000= RM12,000

Max loan= 90% of RM120,000 = RM108,000

Let's assume market will only pick up 2 years from now, so BLR would stay at 5.55% til 2011.

Let's also assume that the simple average BLR of Malaysia for the past 30 years is a cool 8%, so worst case BLR would readjust back to 8% when the bull market comes back.

For history of BLR click here

The question now is, which loan should you take to get the MOST cashflow?

Let's assume Cashflow accumulation is linear and not compounded. Also, fluctuation of BLR will not be taken into account in this calculation as this is a theoretical model.

Case 1: BLR-2% for 40 years (from any major bank, zero moving cost, MRTA included)

For the first 2 years, BLR will be 5.55%
After 2 years, BLR will shoot up to 8%(Average) for the next 38 years.

a)Monthly payment for 5.55%-2%: RM423;

Click on pictures to enlarge

therefore positive cashflow is RM650-RM423 = RM227

Cashflow for 2 years is RM227X12X2= RM5448

b)Monthly payment for 8%-2%: RM593;

therefore positive cashflow is RM650-RM593 = RM57

Cashflow for 38 years is RM57X12X38 = RM25,992

So the total cashflow for the next 40 years would be RM25,992 +RM5448 = RM31440

Case 2: BLR-2% for 30 years (from any major bank, zero moving cost, MRTA included)
For the first 2 years, BLR will be 5.55%
After 2 years, BLR will shoot up to 8%(Average) for the next 28 years.

a)Monthly payment for 5.55%-2%: RM490;

therefore positive cashflow is RM650-RM490 = RM160

Cashflow for 2 years is RM160X12X2= RM3840

b)Monthly payment for 8%-2%: RM646;

therefore positive cashflow is RM650-RM646 = RM4

Cashflow for 28years of= RM4X12X28 = RM1344

So the total cashflow for the next 30 years would be RM3840 +RM1344 = RM5184

Case3: 4.85% fixed for 30 years (from insurance company, must pay 5% moving cost based on assumption)

Monthly payment is RM570
and positive cashflow is RM650-570=RM80

Cashflow for the next 30 years = RM80X12X30=RM28,800

Say,total moving cost is 5%XRM120000= RM6000 (usually is less than this)

Net linear cashflow is RM28,800-RM6000 = RM22,800

Conclusion:

If you are given the choice of taking a flexi loan of BLR-2% and if BLR shoots up to 8%, but your loan is 40 years, your linear cashflow is RM31440

If you are given the choice of taking a fixed rate loan of 4.85% for 30 years max, your linear cashflow accumulated is RM22,800

The difference between these 2 packages is RM8640. So you would make RM8640 more if you go for a 40 year flexi loan of BLR-2%.

Therefore a flexi loan gives you more cashflow IF and only IF you can take a 40 year loan.

On top of that, the advantage of a flexi loan is that
you can withdraw the total amount out for other investments

However if you are entitled to a flexi loan of max 30 years, your cashflow would only be RM5184.

Then it makes sense to take a fixed rate loan of 4.85% for 30 years as your cashflow would be RM22800 which has whopping RM22800-RM5184 = RM17616 difference!

Fixed rate loans do not have a withdrawal advantage.

If you have feedback on my calculations, please write in the comment box below.

Have a nice day.

Man are you crazy?

2009-07-30T08:13:00.000-07:00

You see, the only thing between a genius and a moron is a very very thin line.

Read this article:

"During a recent seminar, I challenged all the participants that each one of them must have a goal of having at least RM5 million in bank borrowings for property investments, provided the returns are higher than the borrowing costs. Many participants almost fell off their seats, as it was a little difficult for many of them to comprehend such a figure. Most of them never had any sort of goal as to how much money they should aim to borrow."

Full story here.

How do you find capital gains

2009-07-27T01:13:00.001-07:00

Right here of course!

http://www.makingmoneyforextrading.com

There is no better market than the Forex market!

A story of a fresh graduate

2009-07-14T04:08:00.000-07:00

His name was Neo. Neo had a degree in engineering from a prestigeous university. After graduation, Neo got a job at a very good transistor manufacturing company.

His income was fixed but he was happy that he got paid more than his other classmates in school. His monthly salary was 3000 dollars. To him, it was a lot of money. He's got game or so he thought...

After 5 years, Neo had accumulated a hefty sum of money and was ready to move on to the next phase in life. He had decided to buy a house. Neo knew that a house is a big commitment. Alot of money would be spent throughout the rest of his working life in order to own a big house.

He said "If I'm gonna pay so much, might as well use the money for a brand new house with a nice view!" " It would be an asset!"

Inside him, Neo assumed that owning a big house would impress his girlfriend very much. His girlfriend on the other hand assumed that Neo should be able to afford a big house for the both of them, afterall she knew she was worth it.

So Neo came across a brand new house in the heart of town. It was worth 250,000.

Neo calculated his monthly payment using the latest lending rate from his favourite bank which is at 3.55% for a loan period of 30 years. The monthly payment came up to 1,130.00 a month.

He exclaimed," Wow! That's like 38% of my monthly salary!"

But Neo consoled himself and said," Oh well, if that is the price of impressing my hot girlfriend, then it's worth it! It wouldn't hurt to pay so much for a beautiful house would it?"

So Neo went on to buy the new house.

As Neo was walking to the bank to apply for a loan, a tall black man stopped him and said,

"Hold on Neo, are you sure you are doing the right thing?

I've been looking for you all my life. You are the one Neo, the one to free us from poverty!

I'm from Zion. It's the real world.

The world as you know today is just an illusion. A big lie! The bankers have made you think that you are living in a world of abundance. That you will never be downsized and that you will always be able to afford a big house.

Your employers had tricked you in climbing the corporate ladder, making you fight for a spot in the system, giving you false hopes that you would get an increment every year.

The truth is Neo, we had been down that path before and now, we are trapped in debt. Our employers had given us false hopes and our company had shut down. We have been jobless for years and we are trapped in Zion, a world filled with tremendous debt!

We have been searching for a savior to rescue us! After years of research, we have found you Neo! You are the one!

If you buy this house, you will forever be trapped in the rat race and there is no way you can free yourself from the monthly instalments.

What more, you will never be able to wake up from the rat race to free us from Zion!

You will not have time in your hands as you will be looking for higher income jobs that demand more of your time. We need you Neo. We really need you! Save us from poverty!

And oh by the way, your girlfriend's been cheating on you. I saw her going out with a pilot. She thinks he's safer because he earns more.

So. Let me offer you these pills. Take the blue pill and you will forget that you have met me. You can go back to your routine, and life as you know it, shall remain as you want it to be. Safe. Secure.

Take the red pill and you will be able to get out of the rat race.

It will not be a comfortable journey but I assure you, you will have more time to help more people.

Besides, you can own more than 1 house and not be bound by an ever demanding girlfriend. Ditch that bitch bro, she's a gold digger."

Neo thought for a while and said " Yeah, that brother's got a point. I don't need to be a slave like everybody else! Hell Yeah! I'm Neo! I'm the one! I can do this!"

So Neo took the red pill and man, his life changed forever!

Neo entered a world where there were endless possibilities. He could do stuff that normal people could not do. Like he had time to learn kung fu and stuff!

Now Neo went on to rent a place to stay for just 300 a month. He didn't need to stay in a big house anymore.

He dithced his cheatin' girlfriend and found another girl from Zion. This new girl doesn't mind staying with Neo in a rented house because she knows that a big house is a liability. She wanted to get out of debt as badly as Neo did. She hung on to him. She's baddass, you know I'm sayin?.

Both of them managed to get more cashflow. They reduced their expenses and used the extra cash to buy 2 rental properties every year.

They looked for auctioned properties and managed to rent out the houses for more cashflow!

After 5 years, Neo was finally out of the rat race. His passive income from his rental properties had exceeded his monthly expenses.

Neo could finally quit his job as income pours in without him going to work everyday.

He finally had time to free the others from Zion.

The best part is, Neo got to travel to California for San Diego's Comic Con on an annual basis totally free of charge!

He could finally live his dream and rest in peace.

Moral of the story. Take the red pill. It'll change your life too!

Step by step guide to owning a free house

2009-07-13T19:01:00.000-07:00

1. Look for a house which is worth RM120,000. (You can buy from auctions as the prices are 30% lower than market value) Age of house is not important. As long as house is not tumbling down. The lesser repair needed, the better.

2. Make sure the house could be rented out for more than your monthly installment. To check monthly installment, use the loan calculator on the side of this site and key in the latest interest rates given by your bank. (Interview as many banks as you can to get the lowest rates)

3. Purchase the house with no down payment. How do we do that? Agree with the seller that he/she will quote the house at RM140,000.

4. Go to the bank and ask for a RM130000 loan. Use the extra RM10,000 of the loan money as down payment to the seller.

5. Stretch the monthly payment of the RM130k loan for the longest period so that the monthly installment is the least.

6. The extra cashflow from the rental will be used to reduce the principle of the loan. Your loan can be paid up in the shortest time if you keep on reducing the principle.

You may take money from your EPF Account 2 to pay more of the principle. If you have bonuses, you may put it in too. Be creative. This strategy is best for married couples who have more earned income. For singles, they just have to work harder.

7. Once deal is done, put the house up for sale at 140k. You will either profit RM10k as capital gains or you can choose to keep the house for pure cashflow once the loan is paid up. Step 7 is totally optional.

8. After the lock in period of the loan is over, refinance the house and take out the equity of the house at market value to repeat steps 1 to 6.

9. Repeat step 1 to 8 til very very rich.

The cons of capital gains: You can use the 10k to buy liabilities but you will loose the residual cashflow from the property.
However you can use the 10k to cover whatever debt you have due to education loan or business failure.

The pros of cash flow: You can have infinite cashflow as long as the house is rented out. Some people have so much cashflow from their rental income, they can actually quit their jobs.

If all this does not make sense to you. I really don't know what else does.

Welcome to free house Malaysia.

How long does it take to double your money?

2009-05-18T02:27:00.001-07:00

http://www.investopedia.com/terms/r/ruleof72.asp

Say if you can find an investment that gives you 11% of interest.

You would double your money in 72/11=6.5 years!

Yes! it's as simple as that!

Check out this cool tool

2009-05-10T19:18:00.001-07:00

EPF withdrawal calculator

Where to look for money!

2009-05-07T18:49:00.000-07:00

Here are some facts for you to take money from your EPF account for your house investments:

Fact 1:

Withdrawal to Reduce / Redeem Housing Loan

This withdrawal allows you to utilize your savings from Account 2 to reduce or redeem the balance of yours or your spouse’s housing loan taken from a financial institution approved by the EPF for the following mode of purchase or construction of a house:

Individual purchase; OR
Joint purchase with spouse, family members or other individuals; OR

Withdrawal to reduce / redeem the balance of housing loan of the second house is allowed after the first house purchased utilizing EPF withdrawal has been sold or disposal of ownership of property has taken place.

Disposal of ownership refers to 'loss of ownership of the first house owned by you either due to auction, surrender of property by court order, transfer of ownership because of love and affection, destruction of house due to natural disaster, abandoned housing project or cancellation of purchase.

Application Eligibility

A Malaysian Citizen; OR
A Malaysian Citizen who has made Leaving The Country Withdrawal before 1 August 1995 and has opted to re-contribute to the EPF; OR
A Non-Malaysian Citizen who:
- Has become an EPF member before 1 August 1998; OR
- Has obtained a Permanent Resident status (PR).
You have not reached the age 55 at the time the EPF receives your application; AND
You have a minimum savings balance of RM500.00 in your Account 2.

Step by step process is available here

___________________________________________

Fact 2:

Withdrawal to Purchase a House

PURPOSE

This withdrawal allows you to utilize your savings from Account 2 to partially finance your purchase of a house individually OR jointly with your spouse or close family members namely parents or siblings.
Buying of a house with another individual who has no kinship is allowed provided that the other individual is a buyer and borrower.
This withdrawal allows you to buy a house from a developer or an individual or through a public auction.
EPF Withdrawal to purchase a second house is allowed after the first house purchased utilizing EPF has been sold or disposal of ownership of property has taken place. Disposal of ownership refers to 'loss of ownership of the first house owned by you either due to auction, surrender of property by court order, transfer of ownership because of love and affection, destruction of house due to natural disaster, abandoned housing project or cancellation of purchase'.

APPLICATION ELIGIBILITY

(i) A Malaysian Citizen; OR
(ii) A Malaysian Citizen who has made Leaving The Country Withdrawal before 1 August 1995 and has opted to re-contribute to the EPF; OR
(iii) A Non-Malaysian Citizen who:

Has became an EPF before 1 August 1998, OR
Has obtained a Permanent Resident (PR) status.

You have not reached the age 55 at the time the EPF receives your application; AND
You have a minimum savings balance of RM500.00 in your Account 2.

Step by step process is available here
____________________________________________

Fact 3:

Housing Loan Monthly Instalment Withdrawal

This withdrawal allows you to utilize your savings from your Account 2 to pay for your monthly installments of a housing loan taken for the purpose of buying / building a house.

This withdrawal is in addition to the withdrawal to reduce / redeem housing loan

Payments will be made via direct-crediting into your personal bank account. or will be sent to you in form of banker’s cheque payable to the financial institution concerned for those with Non Performing Loans (NPL).

Withdrawal Eligibility

(i) A Malaysian Citizen; OR
(ii) A Malaysian Citizen who has made Leaving The Country Withdrawal before 1 August 1995 and has opted to re-contribute to the EPF; OR
(iii) A Non-Malaysian Citizen who:
- Has become an EPF member before 1 August 1998; OR
- Has obtained a Permanent Resident status (PR)
You have not reached the age 55 at the time the EPF receives your application; AND
You have a minimum savings balance of RM600.00 in your Account 2.

Step by step process here

____________________________________________

So now that you have the extra cash, what can you do with it?

You can reduce the principal of your home loan hence reducing the term from say 30 years to 15 years!

Besides, you get to reduce your interest by a few thousand dollars! That's like a double bonus!

How can you see this effect?

You can use this tool.

Don't thank me. Thank yourself for dropping by.

I'm a big fan of Kiyosaki and here's why:

2009-04-29T19:13:00.000-07:00

"For example, we put approximately $2.5 million into a $9 million, 300-unit apartment house, and secured a construction loan to improve the property.

A year later, due to attracting better tenants at higher rents and a lower vacancy rate, the property was appraised at $14 million.

With the higher appraisal, we refinanced the property with a new loan at a better interest rate, and were able to take out $4 million tax-free.

The money is tax-free because it's a loan, not profit.

The debt service -- the monthly mortgage payment -- is paid for by the tenants.

With this investment strategy, our ROI is practically infinite.

We have no money in the investment, yet we collect a monthly cash flow and still have control over the property."

Read all about it here.

What can I say. You can have your pie and even eat it too.

Wake up call!

2009-04-22T00:33:00.001-07:00

Watch this and weep!

http://vodpod.com/watch/1276333-rich-dad-part-2

Time proven wisdom!

2009-04-21T22:32:00.000-07:00

Listen to the Guru

2009-04-21T21:56:00.001-07:00

Get inspired by the greatest stories ever told.

2009-04-14T18:42:00.001-07:00

Players of the game part 3

2009-04-05T23:21:00.000-07:00

Here is a story about someone who achieves success via rather non-conventional ways. Azizi Ali is a pilot. He is also a business owner, best-selling author & writer, speaker, financial coach and an avid property investor. In short, he is doing what he likes most and became a millionaire in the process.
Azizi Ali has today written over 20 books, most of them becoming the national best sellers. In 2004, he was estimated to be making over a quarter of a million ringgit from writing alone.

Read more here.

Players of the game part 2

2009-04-05T23:20:00.000-07:00

In a programme titled “How You can be a Millionaire Property & Stock Investor … right here in Malaysia”, Milan Doshi, Independent Financial Trainer and Best-Selling Author of “How You Can

Become a Multi-Millionaire Real Estate Investor!” and “How You Can Get RICH from the Property and Stock Markets”, will be sharing tips and insights on how to improve one’s financial and investment skills and develop a Millionaire Mindset.

Read more here.

Some players in the game Part 1

2009-04-05T23:16:00.000-07:00

To achieve good return on investment from the property market, one should be a risk taker and take positions that go against the general market sentiment.

“Be a contrarian by buying during a property market crisis and selling during the boom time,” advised veteran property investor Dr Peter Yee, who recently released his maiden book, You Can Become Rich In Property.

Read more here.

What are the risks involved?

2009-04-01T22:51:00.000-07:00

1. What if you can't get rental?

If you have a place in prime location like Subang, would it be difficult for you to get tenants? Why buy a house in the middle of nowhere? Who would ever notice it? How are going to get tenants then? What are the odds of an empty lot in a good apartment not being able to be rented out? Do your research!

2. It's so difficult to raise capital.

Borrow money. Seriously, make a good presentation to someone about your plans and ge tthe funding you need!
Why are you afraid of investing when you are sure that the investment will work? All you have to do is ask!

Did you know you can withdraw money from your EPF account 2 for your house investments?

3. What if I can't get a good deal?

You must not stop searching. More and more people are willing to sell their houses in bad times because they need the cash. Use the tools in this site and I'm sure you'll find a good deal. The question is. Can you afford it when a good deal comes along?? By the way, who says you need to buy a band new house. Second hand properties is the best deal because the market is more matured compared to a brand new housing estate. Besides, auction properties are way cheaper than market value. There is abundance in everything. You just have to tap it.

4. Why put your money in real estate when you can put your money in stocks?

Says who? Properties always appreciate and will never be sold below market value. Go ask you neighbour, would he sell his house to you for 1/2 the price??

Go figure.

5. Is there a guarantee in this form of investments?

Is there guarantee in anything at all? Except for fixed deposits that is.

I shall talk more about this graph later when I have the time

2009-04-01T01:23:00.000-07:00

Ok when I say a free house, it's a house that you will not be paying a single cent for.

Here's what you will need in order to get your house free of charge.

1. Tenants throughtout the whole mortgage period. Your tenants will be paying your mortgage for you.
2. Positive cashflow from the rental.
3. Capital. Say 20k for a house which is worth 200k. I'm sure some of you can save up to 20k in 5 years. Most executives in KL these days earn up to 5k a month. I don't see how anyone could not save RM20k in 5 years.
4. Continue buying your second and third house in a 5 year interval using the capital raised and rent out the houses thoughout the mortgage period.
5. Once you have your tenants pay up house number 1,2 and 3, the surplus rental will be used to cover the payment of the 4th and 5 house.

Easily said then done?

Well you have to do the work to make this formula work of course! And the tools of the trade are right here on the right hand side of this site!

With this technique, you can actually buy 5 houses rather than paying high mortages for just 1 expensive house throughout your lifetime.

It's a matter of cash flow. Why pay 3 to 4 k a month on an expensive house when you can rent a house for 1/2 the price and use your extra cashflow to buy a house that is self paying??

So who says you can't get a house free of charge in Malaysia?

Well if you don't believe that this works at all, it's fine too because not all dreams are made this way.

Have a nice day.

Why this blog?

2009-04-01T01:05:00.000-07:00

You see, the internet has changed. It's time for Web 2.0 and infomation is flowing like nobody's business. 10 years ago, you'd probably be driving around looking for good deals the old fashion way. You'd probably be making phone calls to agents you see on newspapers only.

Now, all you have to do is come to my site and click on the links on the right hand side of this page. You will definately come across a good property that will make you drool. Provided you have cash in hand, buying a property had never been this easy!

This is my personalised list of property sites that you can ever find on the net using any search engine. It's an ever growing list and the bigger the list is, the easier it is for you and me to find a good deal. Now all you have to do is bookmark my blog and visit on a daily basis.

Go on! Share the good news.

Creating lists on the net had made alot of normal people very very rich. One famous example is craglist. Google craglist and you will know what I mean.

Have a nice day.

All these mortgage reduction schmucks!

2009-03-28T22:50:00.000-07:00

Did you know that there are people out there who charge you a few thousand dollars to help you reduce your mortgage payments?

I mean come on! Just go to any bank and they are happy to help you reduce your mortgage repayments by the means of refinancing. Banks always want you to refinance your mortgage because they want your business. They still win by the end of the day because the more clients they have the richer they become. Banks always win.

So why go to these so called mortgage reduction "consultants" when you can reduce your mortgage free of charge by doing some extra ground work yourself?

Check this tool out:

http://www.echristianfinance.com/financial-calculators/extra-mortgage-payments-calculator.htm

This tool shows you how you can reduce the time needed to repay your loan by repaying some extra cash per month on top of your fixed payment. You can even simulate the payment according to fornightly or weekly payments!

The interesting part is, if you bank in an extra 100 a week, the loan replayment period gets even shorter than repaying an extra 100 a month!

In other words, the more frequent your repay your mortgage, the earlier it gets paid up! Hence the lesser interest you are charged!

Home loans these days are like overdrafts. You can top up your repayments anytime with no penalty. Just make sure you don't finish paying your loan before the 5 year lock in period. Else, you will be charged an extra 3% of interest.

So spread the good news! A free house is coming your way very very soon. Stay tuned for updates.

Things to bring to a bank to apply for a home loan

2009-03-20T03:16:00.000-07:00

1. Your pay slip of the past 3 months. The bank wants to make sure you earn enough so they could lend you money.

2. EPF summary. Same case. They want to make sure you have money to pay them back.

3. The copy of the title of the property. The bank needs to check the real value of the property you are buying so they could calculate out how much money they could lend you.

4. A photocopy of you identity card. For registration purposes.

About

2009-03-12T22:15:00.000-07:00

This blog is a personal resource site on how to acquire a house free of charge in Malaysia.

Sounds too good to be true? Read along and you will find the answer.

Sometimes, the price of a property is valued based on emotions and very little on actual facts and figures.

Because if you ask yourself deeply. How much does a piece of rock really costs you? It may be nothing to one but a million to another.

So the goal of this site is to find a balance between facts and emotions pertaining to properties.
And of course how one could actually acquire a house free of charge by using actual numbers and facts instead of using emotions and ecstatic values.

Even if you don't like what you read here, I'm sure this blog would be a very good conversation piece.

Have a nice day.