OK, let’s face it – those uber successful big time ballers don’t get to where they are now by doing things that wannabe “investors” do. If you’re wondering if they know something that you don’t, then you’re right. And if you need to ask, they certainly didn’t make their riches reading “Prosperous Papa Pokai Papa” or going to “Unleash That Sucker In You” guru scaminars.
I know this because I spent some time with a group of these fellas over tea on a Sunday afternoon, and I had the opportunity to ask a couple of questions (courtesy of my Mentor). Roger was a senior of the member of the group was fairly successful investor who made his money from a large portfolio of student rentals. He attributed much of his success to what he called “The Eternal Newbie Pool“. “Guru books and seminars are actually good for MY business,” he quipped. “It helped keep the newbies out, and they get stuck in the newbie mode because there’s always another book to read and another guru seminar to attend. This keeps most people out of the action while I happily and quietly make my money.”
“And of course,” added Roger, “knowing who is legit and who is just a crap-spewing vermin is important. Knowledge is important, of course, but there’s a difference between genuine information and sales pitches which are disguised in the form of ‘teachings’.”
Unconventional Strategies Of The Uber Successful Investors
Some of the learnings from this meeting have been documented in this previous blog post (“Things People Believe About Property Investment That Are Completely Bullshit“), but here are the Cliff’s Notes-style summaries of the strategies that I have gathered from the roundtable that day.
Roger (student rental properties, now in private equity)
- Encourage people to go to guru seminars and read guru books so that they don’t take action and compete with you.
- Nobody knows jack shit about every thing. But I can claim to know more about student rental properties than anyone else in Malaysia. And that’s why I make money.
- Build relationships with good agents. Let them bring deals to you.
- Don’t be a generalist. Don’t say, “I have $1,039,039.92 and I am looking for 7% yield.” Be a niche specialist.
- Stay out from property classifieds sites and newspapers. Those are properties which are out in the market, which mean that you don’t have an edge. Look for off market deals. (Soft plug: use the DealMatcher – KY)
May Fern (commercial properties, especially in shop houses in “fringe” areas)
- It saddens me to say this, but there are too many crooks in Malaysia property. Do not automatically give anyone the benefit of the doubt. Err on the side of caution.
- Watch out for people undercutting you, or bypassing you in a deal. This is a big problem especially in my niche (commercial real estate).
- When you’ve got the budget, get a good lawyer on retainer. Don’t hire your brother-in-law. Hire a real, professional, kick ass lawyer.
- Goals are for losers. Stick to a process.
- Just because a company is big and “branded” it doesn’t mean that it won’t screw you.
The Slayer (retired, plays in a hardcore metal band)
- Form a kick butt team. This is what I learned from my hero, the ultimate property baller, Liew Kee Sin. Only idiots do everything on their own.
- Develop a funnel vision. Once you’ve decided on a strategy, stick to it and blank everything out. Don’t invest outside your risk profile.
- Anticipate where the market is going, and get there first.
- If a price is on a steep growth for an area, it may mean that you’re too late in the game. The trick is to be early, not late.
- You’re not here to make friends. You are here to make money. Stop meeting with people to “exchange investment tips”. Put your head down, and get to work.
Munirah (operates a family office; international properties)
- Don’t do business with friends and family. This may sound weird as I’m running a family office, but we make it a rule NOT to deals with our extended families and friends.
- Be good at math. Crunch your numbers dutifully. They don’t lie. Take emotions out of the process, and be completely data driven. I never go by the gut, and I don’t care what others say.
- Look out ONLY for properties where you can add value. This means that 99.99% of everything are off my radar. Which is good, because I can then focus on the shit that matter.
- If you’re in this just to make money and “achieve financial independence“, you’re doing it wrong.
- I buy for cash, not for capital increase. Our portfolio keeps growing in size and value, but cash generation is, and will always be #1.
Ari (upmarket properties – KLCC, Orchard Road, The Peak)
- You can’t get rich flipping properties. Buy and hold. Don’t sell.
- Take a 20-30 year time frame. I am dead serious.
- Once I identified an area to invest in, I usually rent the place for a week first before I decide to buy or not.
- Watch for spillover. This is true even for luxury properties.
- The “profit sharing” idea is bullshit. It’s rare that a legitimate JV opportunity (I hate that word) comes along. Pull up your pantyhose, put in the blood/sweat/tears and get 100% of everything.
Agree? Disagree? Let me know in the comments section below.