A True Malaysian Gooroo Horror Story

Gothic Girl @GoodPlace

My name is Barry, and I am a guest contributor to GoodPlace. I’ve been a GoodPlace Digest reader for some time now, and I’ve been in touch with Khai Yin regarding some of the questions that I have had regarding property investments. Last week, he asked me to share my experiences with GoodPlace readers and so here I am. 🙂

Here’s an early disclaimer: I’m pretty much a newbie when it comes to property, and am yet to pull the trigger on my very first acquisition. So you know.

Khai Yin’s aversion to Gurus is well documented here at GoodPlace, and as far as I know, his distaste stems purely from a moral and philosophical point of view. For me, I have been burnt by one of these shysters in the recent months, and so I am writing this from my personal, first-hand experience. Yes, dear reader, I have suffered horrifically in the hands of a local property guru, and hence the title of this article – a true Malaysian Guru horror story.

I Just Want To Live A Better Life

Like every other Malaysian, I dream of a better life. I have always wanted to escape the rat race, and I have been researching about money making methods like the stock market, gold investments, MLM, you name it. In the end, I decided to plunge into property for these two reasons which might also resonate with you:-

1. “Leverage”

I know this is a Guru term, but bear with me. With property, one can possibly get to finance up to 90% of the value of a property with, say, 4.5% interest. Home loans are the cheapest compared to, say car loans and *shudder* credit card debt, and for good reason, too. If I am able to entirely fund my property purchase with cold, hard cash, I would still get a loan and invest my cash elsewhere simply because the interest rates are so competitive.

2. Houses Are Beautiful

This is an entirely personal reason, of course. I’m pretty much an introvert, and I like to spend most of my free time at home. As such, I would really enjoy living in a beautiful house, spending time prettifying the place even more (I’m also a big fan of interior design).

Now as much as I’d like to be at home, my work would require me to go outside the country often, and as a result, I couldn’t spend more time house hunting than I should. You could imagine my delight when I stumbled upon this opportunity where a Guru and his team would do all the leg work:-

  • The Guru would do the house hunting for me
  • The Guru would handle the acquisition from start till finish
  • The Guru would deal with the agent on my behalf
  • The Guru would deal with the developer on my behalf
  • The Guru would deal with the lawyers on my behalf

All I would need to do is to pay the “consultancy fee”, sign the paperwork and turn up to collect the keys. What could ever go wrong, I asked myself. The quick answer: everything that could ever go wrong, went wrong!

…And It Started To Go Downhill

It was perhaps my fault to completely trust this Guru – after all, he had his frequent appearances in the media, and by all accounts, he seemed legitimate from the outside. I duly paid his “consultancy fee”, and when he proposed to me this particular property to purchase, I quickly plonked down the booking fee without doing my own homework. You see, I had completely placed my trust in this Guru, and heck, I really wanted to believe him. But that was where my downfall started…

After some time not hearing from the Guru, I tried to follow up, but to my slight annoyance (at first) I couldn’t just get hold of him (later I would find out that he was busy running a series of seminars around town). I then decided to talk to the bank myself, and my heart sank when I was told that my loan application was rejected.

At this time, I was furious because I thought the Guru would have called me to let me know, and we could even work out other solutions to fund my purchase. After all, the Guru promised to handle the acquisition completely from start till the very end. It was then clear to me that the Guru was reneging on his promises, and I felt cheated of the fees that I already paid him. He was more interested to get more customers (through his seminars) than to help me, even though I have already paid him his fee.

Sensing that I had been taken for a ride, I decided to cut my losses and cancel the booking. Now unfortunately this was where more trouble awaited me. Since the Guru had refused to take my calls at this point, I had to personally go to chase the agent and developer which was yet another horror story. Long story short, I finally managed to get my booking fee back (with some minor losses), and obviously the “consultancy fee” that I paid to the Guru was never recovered.

I am a frugal saver, and so I hate losing money (of any amount). So, this really hurt me, and hurt me bad.

Lessons Learned

As they say, there’s a silver lining to every dark cloud, and I’m grateful that I walked away with some pretty valuable lessons.

Here’s the undeniable truth about Gurus: if they are good at making money from buying and selling property, why are they instead making money from selling seminar tickets or “done for you” deals? I like this analogy: if you make a fortune selling gourmet burgers, why would you want to teach others to do the same? You’re only going to invite more competition for yourself, which is stupid.

(Beware of the common Guru excuse: “I am doing this to help people” or “I want to give back to the society”. Don’t fall for these lies. Hypocrites.)

Expanding the analogy a little further, there could be one valid reason to sell a How To Get Rich Flipping Gourmet Burgers seminar – if the market for gourmet burgers are going to the dogs and you need to make money. Get my point? I’m not generalizing too much here if I claim that Gurus are selling seminar tickets because their methods do not work anymore (but they still want to make money).

Like Mark Cuban once said, “everyone is an expert during a bull run”. Very, very true. Problem is that some (most?) people attribute their success during the property boom market to their OWN capabilities, and when the market turns, they start to lose money. So what do they do? They start becoming Gurus, touting their PAST experiences in the boom market as the testimony to their property investment genius.

It’s all a lie, my friends. Wake up. I did.

All Hope Is Not Lost

I might sound all dark and gloomy so far, but indeed, all hope is not lost. I think we are blessed that we live in an era where information is so readily accessible at our fingertips. By doing so, you’ll rely less on Gurus and more on your own research and analytical skills.

For example, there are a lots of property blogs that generously share their tips for free – GoodPlace being one of them (Khai  Yin…do I get commission for this?). Some of these bloggers are generous with their knowledge, and by asking the right question and you will get good answers. Of course, you still need to get your BS detector up.

Additionally, I have also learned to focus on a specific area or niche. For example, I was raised in a high rise building, and I had the experience of upgrading from a cheap flat to an apartment. So, I have a good idea about what’s good and bad about living in a high rise property. As such, I would do better investing in a condominium than a shop lot in Klang that a Guru recommends for reasons known only to the Guru himself (kickbacks? cough).

I hope my story helps you somewhat, and if it steers you away from falling into the Guru trap then I consider my job done here. At least, you’ll know to stay away from the local property authors section in the bookstore!

About Barry

Long-time reader of GoodPlace. Enthusiastic about property!

Comments

  1. the problem isn’t with the ‘property gurus’ or those who sell their ‘property advise and experiences’ , the problem is with the gullibility and greed of property investors. reading, researching and making your own analysis and decisions is more time consuming and painful but will eventually pay off in the future. i have attended a property seminar recently, listening to these so called property gurus. once i hear crap, i leave the hall, if i hear some evidence based research and comments, i will pay attention. it is as simple as that. there is no need to blame ‘property gurus’. when the demand drops, the supply will naturally follow suit. read between the lines before commiting hard earned cash into any venture. we just need to grow up and learn to be a smart consumer.

  2. Kevin Chan says

    No one should go to school then, most af all teacher is not successful …

    Consultancy firm like KPMG / PWC should roll their carpet… Look at all the banks scandals … They were all involve in it…

    But yet, they all serve a purpose… “Gurus” is not there to ensure your success, it’s a shorter way for you to gain knowledge that you don’t want to spend tons of time to research.

    I personally benefited a lot for these so call “gurus” … Make my research much more faster… No money down… So, now I know how to DIY… I didn’t hell trust them, but their tips did cut my research time and effort considerably.

    Btw, I don’t trust teacher and he’ll no to KPMG consultant… I still send my child to school and my company still audit by KPMG… Why ahhhh?

  3. How about this argument that the guru is in it to make more money so that he/she can buy more? Is this valid?

    • It’s all about the returns vs investment and effort. Why not make money from the techniques he teaches in property so that he can buy more? If he makes more in seminars than in property then that’s the crux of the problem.

      Can you imagine Warren Buffet selling a seminar on how to pick stocks? Come on now. He’s too busy making money picking stocks than to whore out his secrets for a seminar ticket. “I’ll sell a seminar to make money so that I can go buy more shares” ? L.O.L.

  4. Dear Khai Yin, Barry and fellow members,

    By reading this articles and arguments, it really see things from 2 sides. Keep up your good work.

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