Jeet Kune Do Strategies In Real Estate

bruce-lee

So the last two weeks have been quite eventful for us here at GoodPlace HQ: we finally launched GoodPlace Homes to much fanfare, and the site was completely blown to smithereens as we completely underestimated the amount of traffic coming to our underpowered server. We have since moved to a “cloud” server (goodbye Exabytes, hello Linode), and as I am writing this, the site is now nearly 100% accessible although it still sometimes loads at a kura-kura‘s pace whenever there are traffic spikes. Do go slow with the clicks, my dear readers.

Chris Pratt

What’s next is to relook at the code and see if I can rewrite some of it to make the site run faster. Of course, any smart entrepreneur would just outsource this and go do more important stuff like hobnobbing with venture capitalists at a party sipping mocktails and eating tiny sandwiches. But then again, a smart entrepreneur would probably not start a property site in Malaysia in the first place (ha ha). Yes, a real sucker for pain I am one.

In the meantime, do bear with me and give me some breathing space I’m trying to figure out this technical mumbo jumbo all by myself. Admittedly, I’m as good at web programming as Justin Bieber at singing Nessun Dorma at the Sydney Opera House. Truth be told, folks, I’d rather write another blog post than to look at cryptic code but then again, shit needs to be done.

“Evergreen Strategies Are For The Birds!”

One of the things I like most about property is that they tend to be (relatively) long term, and as such, they are best when it comes to investments which you can “set and forget”. The truth is that as long as you have the financial staying power (and the ability to overrule your emotions), you can ride out all short-term fluctuations in the market and get a huge pile of money at the very end when you’re grey and old. 😉

And exactly for this reason, you can apply some pretty nifty strategies which work no matter if it’s the bull or the bear cycle of the market. These are what I call as evergreen strategies, and I like them so much that I have written a series of guides on them which you can read here, here and here.

Now the regular GoodPlace readers would know that I sometimes get to hobnob, drink mocktails and eat tiny sandwiches with some really clever people (that’s the trick, folks: always hang out with people 10x smarter than you). Out of these good folks, there was this dude who went by this moniker “Slayer” (named after the metal band). When we first met, there was instant rapport because we were both guitar-playing, devil-worshipping, horn-throwing metalheads.

Our jamming corner here at GoodPlace HQ

Our little jamming corner here at GoodPlace HQ

Make no mistake about it though – this Slayer dude is a real hustler when it comes to making money with property. However, he goes completely the opposite direction as I do – he’s the “live in the moment” kind, and as opportunistic as they come. In short, he’s a hardcore flipper, a short-term moneymaker. When he first found out about GoodPlace, he told me, “Khai Yin, you’re making a mistake. Nobody wants to read a blog on how to make money slowly.” Of course, I had begged to differ.

When I have published the trinity of the “evergreen” guides, Slayer called me again. “You make it sound as if these evergreen strategies are be all and end all to the property game. They are not. Even if you play the long game, you gotta be tactical when it’s time to be tactical.” Always eager to learn, I had asked him to elaborate.

“You know that I’m not a fan of buying property and waiting twenty years to make money. This set-and-forget nonsense is beyond ridiculous. Evergreen strategies are for the birds!

You Gotta Be Like Bruce Lee

Admittedly, I was quite taken aback by his remark. Obviously, he knew his shit (he retired at the tender age of 38, living off the monies he made in a series of quick flips during the boom years), and I was always curious about the way he would approach property.

“It’s easy to get stuck with a dogma. You gotta be like Bruce Lee. Instead of sticking to one martial art school, he would try them all out, picked out the best stuff, and blend them into his own style. Jeet Kune Do, he called it!”

I thought that was an interesting point.

“In the short term, you gotta be tactical, and adapt your strategies condition of the market. In short, how you invest in properties depends on whether it’s the bull market or the bear market.”

Of course, this goes opposite to what I preach, but then again, I’m no flipper, and as such, I’m not in a position to disagree with him. After all, he claimed to have made money using these tactics, and as the saying goes, the proof in the pudding is in the eating.

Here’s a summary of this “Jeet Kune Do” style of “investing according to market conditions” below. Let me know if you agree or disagree – I’ll let you know what I think in the comments later. 🙂

How To Find Good Properties To Buy

 Tactic
Bull MarketFind properties that are ABOUT to hit the market. Listings are usually stale, so avoid the portals. Get a good agency, or go look for vacant properties yourself. Mailing can be effective.
Bear MarketProperty listings and auction markets are good sources of inventory. Take your time as inventory is huge.

How To Estimate The Holding Time Prior To Flipping

 Tactic
Bull MarketPrepare for a quick flip. It's entirely fine to sacrifice margins for speed / ease of execution.
Bear MarketFactor in extra lead time (typically +20-30%); also consider cash generation strategies in the meantime. If time span is longer, also consider if it makes sense holding out for RPGT.

How To Negotiate The Buying Price

 Tactic
Bull MarketHave a "hard" limit, and stick to it!
Bear MarketYou will have the opportunity to bargain, especially if you're in the distressed niche with desperate sellers (cough, DIBS, dough) or at public auctions.

How To Close The Sale

 Tactic
Bull MarketMinimal effort - just engage a good agent!
Bear MarketSubstantial amounts of dressing up and staging work needs to be done. Apart from getting an agent, also consider FSBO via your own (social) networks. Pricing will be key.

One Last Thing…

As you will see, Slayer’s strategies depend on the following two conditions:-

  1. You want to flip and make quick money. If you’re buying and holding for the long term, they are not applicable to you.
  2. You need to know if it’s the bull or the bear. If you haven’t done so, read this guide to property cycles.

Now, for absolutely no reason at all, here’s a picture of the fabulously delectable Doris Yeh tenderly fingering her instrument.

Doris Yeh

About Khai Yin

When I am not writing for GoodPlace.my and helping my readers find properties though the DealMatcher service, I spend time doting on my three kids: Wenyi, Qinyi and Eian. My personal stuff, some published essays and contact details can be found at khaiyin.com

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