How To Start Your Own Property Syndicate (For Fun And Profit!)

Catherine Lo GoodPlace

One thing that truly amazes me about property clubs,  syndicates, gurus, seminars, “crowdfunding” sites, “land banking” syndicates (dan lain-lain yang sewaktu dengannya) is how laughably crappy their marketing is. They claim to make megabucks running their schemes and yet they resort to do what lame “make innerwebz monies” Internet marketers do like buying fake Facebook likes (300,000 followers? Yeah, right) and sending out email spam.

I almost spit my coffee when I saw this in my email inbox yesterday –

intimate-red-cretin

Apart from the cringe worthy email subject title (I’d prefer to spend an “intimate evening” only with the missus, thank you very much) this two-bit spammer had the balls to spam me from his OFFICIAL .com.my domain which meant that I only had to file a complaint with MYNIC to get the domain confiscated. Alas, I’m not a rat, and as much as I despise spam, I’d probably just click the “Report As Spam” button and move on. 🙂

And of course, this spamming habit is not an exclusively guru thing. Property agents have been sending out SMS spam for eons, and in the recent years they have moved on to Whatsapp as well –

azim-the-scumbag

Unlike email, there’s no “Whatsapp spam filter” (that’s a good startup idea for you enterprising types), and blocking these Whatsapp and SMS spammers is a tad difficult (although I have been religiously blocking them one by one on my iPhone. If you’re an agent and I don’t reply you it means that you’re on my blocked list!). And of course, I get the exclusive privilege to (mis)use GoodPlace to name and shame these shyster agents. 🙂 WOI AZIM! STOP SPAMMING ME!

Spamming Is Profitable

Make no mistake about it – spamming is hugely profitable. In fact, I had known an “affiliate marketer” (working out of his shitty student apartment in Vista Komanwel) who banked five figures a month sending out (unsolicited) offers for Viagra, Cialis and dick pills. He had told me once, “Legal issues aside, dude, spam works, period.”

Unfortunately for the rest of us, many scummy property clubs and syndicates have also found spamming to be an easy way to lure unsuspecting people to join their (shudder) “Intimate Evenings“. After all, you can’t expect the average kedekut property guru to spend money spamming (it’s not free) if they don’t make money in return.

And despite my misgivings about these shady property clubs, I do think that their business model (buying in groups to get better prices from the developer) has got its merits (shocking, I know). To paraphrase iProperty Buyer Club’s tagline (I like your work, Shen), there’s indeed power in numbers.

But before you get all excited and go throw your money to the latest property investment fad please first hear me out: you can reap all benefits of a property club WITHOUT joining one. In other words, you can enjoy “new” investment opportunities (since your pooled capital is bigger) and get a bigger spread of risks without the typical downsides associated with the run-off-the-mill property club (guru colluding with developer to sell you crap properties, guru running away with the profits, guru making you buy crappy $997 get rich quick DVD programs, etc).

In this new series of articles that we are going to publish here at GoodPlace.my for the next couple of weeks, we are going to show you how to do exactly that. And the best thing about a “private” property club is that you will WANT to put a limit to the number of members that you have for various reasons, and so you will never need to actively recruit members or resort to doing despicable things like spamming. 🙂

But as with everything you see here at GoodPlace we want to expose to you BOTH the good and bad sides of everything so that you can make informed decisions for yourself. Let’s closely examine the pro’s and the con’s of a private property club (abbreviated as “PPC” from now onwards) and see if it’s worth doing if at all.

 Downsides of a PPC

  • It’s hard to get your money out. Property is already one of the most illiquid investments out there. Putting your money into a pool and then investing the money into property makes it doubly harder to get the money out.
  • Administrative overhead. Unlike investing solo, you’re not that nimble anymore. There’s additional administrative and legal costs too.
  • Divergent goals. Making everyone aligned to the same goal is difficult. For example, some may like to flip, and some may not. Some may like upmarket homes, and some may prefer bread-and-butter properties. Some may prefer condos to landed properties.
  • Partners fall out. Businesses (yes, a property club is a business) fail all the time. Relationships get strained especially when people lose money. Some may want to double down. Others may want to exit earlier.
  • You may be tempted to turn to the dark side. If your private property club fails, what will you do? You may feel tempted to open your membership to the public, thus changing your business model to make money OFF your members (instead of from successful investments which you have none). In short, you’ll turn guru.

Upsides of a PPC

  • There are no lame gurus to follow. You don’t have to take advice from nobody. You’re the master of your own destiny. On the “downside”, you’ll be the one to blame if anything goes south.
  • You can “upgrade” to opportunities which are otherwise not available to the casual “mom and pop” investor. Instead of buying a single 400 sq ft studio apartment you can now buy and sell the whole block!
  • You get a bigger spread of risk. There’s more of you to pass the risk around… and you can make bigger (potentially more lucrative) gambles.

Going In With Your Eyes Wide Open

To many successful solo investors, forming small, exclusive syndicates is the next logical progression of their investment careers. These syndicates also double up as masterminds because you’ll typically want to fill your syndicate up with people who are at least as equally successful as you are, and as The Mentor would attest to, masterminds will truly bring your game to the next level.

And through The Mentor’s own mastermind group (of which I am thankfully a part of), I was able to connect with some of the most successful (and private) syndicates which have been in the background pulling the strings in many sizable transactions in both residential and commercial sectors in Malaysia real estate. In the next article, I will share more about this meeting I have had with the members of this syndicate where they spilled the beans about how to build up a kick-butt private syndicate doing hundred million dollar deals while flying completely under the radar. Watch this space next week!

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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