You can call me anything, Khai Yin, anything at all,” Melanie said with a laugh as she took a seat in front of me at my office. “But I am not a real estate investor, and so don’t call me one, especially if you happen to write about me in your blog.”
I was slightly taken aback by her assertiveness in a way, but I was curious at the same time. “So let me get this straight. You buy properties to sell later at a profit. That puts you squarely within the definition of an investor, at least in the conventional sense.”
She laughed again. “Well, conventionally, yes. But what I do is hardly conventional.”
“But you don’t like being labeled as a real estate investor.”
“That is correct,” she answered. “I don’t invest in real estate deals, which are just quick money generators for me. I get funds which I then funnel into the only asset class which I truly invest in.”
“Wait. How can real estate be quick money generators when it’s known to be illiquid?”
She smiled. “I’ll tell you.”
The Tale Of A True Blue American Hustler
An American, Melanie (not her real name) set up shop here in KL just two months ago to replicate the success that she had back home in Buffalo, New York. “There are so many opportunities here that most people miss that it makes me excited just to be here. I completely agree with your blog post on the importance of pulling oneself out from the herd mindset. And when I read about your series of posts on your Mentor’s mastermind on how the successful thinks and acts differently from the rest of the world, I told myself that I must come and see you.”
I smiled. “You know, Melanie, just to preempt you. I can’t get you into the mastermind.”
She laughed. “I was hoping that you would. But I understand that I’ve got to earn my way in.”
“I do bring a lot to the table. I’m doing stuff that nobody else I know is doing here in this country right now. Nobody at all,” she boldly declared.
Curious, I sat up and leaned forward. “So what do you do exactly?”
“I broker real estate deals for a living.”
I felt underwhelmed with that answer. “Like everyone else then.”
She smiled. “Except that I do it at hyper speed. I buy, sell and make money in three days, typically, from start to end. The fastest deal I have ever done was TEN MINUTES FLAT.”
High Frequency Property Trading…?
I could not help but felt a little skeptical at Melanie’s claims at this point. After all, property was as illiquid as it would get, and here was a lady who claimed that she could complete the buy and sell cycle… in ten minutes no less.
“Khai Yin, I know you’re thinking if I’m nucking futs, but hear me out first before you kick me out. The difference between me and a real estate investor is that I look at as a business, not as an investment. I trade properties. I don’t invest in them.”
I listened attentively. “Trading, investing, flipping… just semantics, my friend. What do you exactly do?“
“Here’s the deal. Most people’s approach is different. They think about finding buyers for their houses. I do it the other way round. I think about finding houses for my buyers.”
“So you see, my method is fundamentally different. While people get agents or look at classifieds sites to find real estate to buy, I go and look for buyers first. And as you see, I am not an investor. Investors are my customers. They pay me to find them houses.”
“But you’re not an agent.”
“No, I am not an agent. I might get an agent to find me houses but only WHEN I have got my buyers all lined up in a row.”
It’s Easier To Find A House For A Buyer Than A Buyer For A House
“That’s very intriguing, Melanie,” I said. “And if I could borrow a cliched term, very out-of-the-box.”
Melanie smiled. “Thank you. But I didn’t stumble upon this by chance. Like you, I had the privilege of getting mentored by an old hand in the industry back in Buffalo, and he helped me a lot. I was a struggling “investor” a couple of years back, and I was having a super hard time unloading these few foreclosed townhouses in north Buffalo that I had bought. And then one day my mentor told me something that completely rocked my world.”
“He had told me: Melanie, it’s easier to find a house for a buyer than a buyer for a house.“
I chucked. “So true.”
“Yes, that was one of those brick-shitting moments! From that moment on, I knew that my days as an investor were over.”
You Don’t Have To “Invest” In Real Estate To Make Money
“So who are your buyers then?”
“Glad you asked,” said Melanie. “These are investors who are making money the traditional sense… to buy cheap and to sell high. What they typically do is to buy real estate at market value, and then do the necessarily improvements and repairs before selling them at a premium.”
“I noticed that you said that your buyers buy AT market value, not BELOW.”
Melanie replied, “Yes, as both of us know, the savviest investors don’t go around bargain hunting because there’s really no point. They eventually have a mark up at around the 15-20% mark anyway, so it’s pointless for them to stretch themselves to look for stock which is selling -5% below market price.”
“So here’s all it boils down to. I have returning buyers who have some very specific requirements and they specialize in certain niches.”
“Luxury properties, distressed properties, student rentals, fringe areas…”
“Exactly. They diversify rarely, if ever.”
I smiled. “This is true, and I have written about it.”
“These are motivated buyers, always hungry for the next deal. Once they have found their niche, they will want to build up a pipeline in that niche. They want more and more houses they can fix and flip. The profit potential is limited only by how fast they can get the houses and turn them around. And as a supplier, my job is to feed into that pipeline.”
“This is so different from selling properties to the consumer,” I offered my view. “There’s usually so much more emotions involved when you’re dealing with individual home buyers. To your investors, houses are just products, just like manufacturing. It’s completely impersonal, which is good for you. Takes the guesswork out of the equation.”
“Exactly!” Melanie enthused. “I had made my millions in Buffalo, and I am going to do the same thing here. No offense, but I think Malaysians are fixated with the new launches and new areas like Iskandar… I only know this “new shiny object” syndrome too well. My business model deals with overlooked areas of real estate, like modest, bread-and-butter homes inside and outside the city. Competition is much less too because everybody’s eyes are on the latest launches.”
“My little blog gets read by a little more than 40,000 people a month, you know. Aren’t you afraid of copycats?”
She laughed heartily. “I’d welcome that actually. There’s no real competition in this business, and if there are any of your readers who want to collaborate, ask them to contact you and we can work out something together.”
Do You Think Melanie Is Legit, Or Full Of Shit?
A disclaimer: I have not done any checks and verified if Melanie’s claims are true. Anyhow, I have decided to publish Melanie’s story because of these three reasons:-
- It shows that there are alternatives to the classic “buy property with high yield now and sell it later at high price” method of making money.
- It presents a novel mindset about property which is different from both “flipping” and “long-term investment”.
- I like her insights about how it’s easier to find a house for a buyer than a buyer for a house (this should entirely transform your approach to property investment!).
All that said, if you’re going to replicate Melanie’s method, then do it at your own risk. GoodPlace can’t be responsible for the actions you choose to take from reading our materials. 🙂 Alternatively, as Melanie has offered, leave me your details if you want to find out more.
Is Melanie legitimate, or just making things up? What you think? Tell me in the comments section below.