Ck’s Rules: Employees Millionaire
Life is short. For me I prefer to have short term pain and long term gain principles. My rules need to be understood and applied if you want enjoy second part of your life. A lot of people I met work almost 75% of their life for survival, for commitments, for children and for luxury life style which they might not need. My question is “Are we born to work till 55 years old?” I don’t think so. It’s a matter of how you organize your own finance early of your career life.
Be remain fulltime employees while become silent millionaire is not difficult. On average you only need 5 years to achieve it. This is how I did it…every year I commit myself to buy at least 1 rental property. Is that tough? I don’t think so. We have 365 days a year to look only for “one good deal”. Good deal property must be located at prime location, below market value (if can), high rental yield and high potential of appreciation. If every year you manage to acquire one rental property with breakeven cash flow (means rental collected equal monthly bank loan installment) you are on the way to achieve millionaire portfolio. Isn’t this simple strategy? Refer to below details of information which might be useful for you appraisal.
1st Property
Location : Beverly Hills ( 3 Bed Rooms)
Purchase Price : RM135K
Loan : RM114, 750
Tenure : 30 Years
Monthly Instalment: RM574.00
Loan Interest : Fixed 4.5%
Initial Capital : RM 20250
Legal Fees : RM5000.00 (Inc Stamp duty, legal fees and other cost)
Renovation : RM5000.00
Rental Potential : RM 750.00 (EXC management fees)
Initial costing for investment in apartment is RM30,250.00 with positive cash flow of RM176.00
2nd Property
Location : Indah Court ( 3 Bed Rooms)
Purchase Price : RM180K
Loan : RM162K (90%)
Tenure : 30 Years
Monthly Instalment: RM808
Loan Interest : Fixed 4.5%
Initial Capital : RM 18K
Legal Fees : RM7000.00 (Inc Stamp duty, legal fees and other cost)
Renovation : RM5000.00
Rental Potential : RM 1050.00 (EXC management fees)
Initial costing for investment in apartment is RM30,000.00 with positive cash flow of RM242.00
3rd Property
Location : Api Api Apartment ( 2 Bed Rooms)
Purchase Price : RM170K
Loan : RM153K
Tenure : 30 Years
Monthly Instalment: RM765.00
Loan Interest : Fixed 4.5%
Initial Capital : RM 17K
Legal Fees : RM6000.00 (Inc Stamp duty, legal fees and other cost)
Renovation : RM5000.00
Rental Potential : RM 1200.00 (EXC management fees)
Initial costing for investment in apartment is RM28, 000.00 with positive cash flow of RM435.00
4th Property
Location : Beverly Hills ( 2 Bed Rooms)
Purchase Price : RM125K
Loan : RM106, 250
Tenure : 30 Years
Monthly Instalment: RM531.00
Loan Interest : Fixed 4.5%
Initial Capital : RM 17,750
Legal Fees : RM4000.00 (Inc Stamp duty, legal fees and other cost)
Renovation : RM5000.00
Rental Potential : RM 550.00 (EXC management fees)
Initial costing for investment in apartment is RM27, 750.00 with positive cash flow of RM29.00
5th Property
Location : Api Api Apartment ( 3 Bed Rooms)
Purchase Price : RM275K
Loan : RM247, 500
Tenure : 30 Years
Monthly Instalment: RM1237.00
Loan Interest : Fixed 4.5%
Initial Capital : RM 27, 500
Legal Fees : RM 9000.00 (Inc Stamp duty, legal fees and other cost)
Renovation : RM 5000.00
Rental Potential : RM 1600.00 (EXC management fees)
Initial costing for investment in apartment is RM41,500.00 with positive cash flow of RM363.00
The Summary of above property:
| Initial cost | Bank Loan | Rental | Net return | Total Property value | |
| 1P | 30250 | 114K | 750 | + 176 | 135K |
| 2P | 30000 | 162K | 1050 | + 242 | 180K |
| 3P | 28000 | 153K | 1200 | + 435 | 170K |
| 4P | 27750 | 106K | 550 | + 29 | 125K |
| 5P | 41500 | 247K | 1600 | + 363 | 270K |
| Total | 157500 | 782K | 5150 | + 1245 | 880K |
Total initial cost invested for above 5 properties is RM 157,500 @ average RM30K per annum. With the assumption all rental properties above enjoying “breakeven” cash flow, your loan amount going to reduce gradually while the market value going to increase steadily with the pace of 5%-8% on average per annum. With minimum investment capital of RM30K consistently for the next 5 years, you are on the way to become silent and self made millionaire. On the 6th years onwards you can afford to continue normal working life, spend all you money without any investment and become employee’s millionaires. Don’t ask me how to get your RM30K initial investment cost per annum, dig your own head to find it as if you can’t find it today, next 5 years you will face same financial problem. Take your on initiative and start your property investment life now. I bet you will buy more than what you expected especially 2nd years onwards as that what happen to me. My property lists grow from 1st in 2004 to 23rd in 2009 with accumulative net value of exceeding RM 2,000,000!! Let us work together, share idea and experience together to become “first generation millionaire” even though we are fulltime employees!!
Related posts:
TNBC Motor Sdn. Bhd.
Lot 1, Neutron Point,
Jalan Lintas Khidmat,
Kolombong, 88300
Kota Kinabalu
Tel: 088-438000
Fax: 088-439000
{ 55 comments… read them below or add one }
Simple & great idea to invest into properties for financial freedom. This is the idea all of us have known long long time ago, however, the only different between ck & most of us is Action & Persistency.
Well done!
Hi CK,
What you said is all very true. A lot of time, we do not dare to think out of the box because we are taught to “be conventional” and not to put ourselves at risk – be it physical or financial. I agree 100% you cannot grow land – that’s why investing in land and property in the right locations is a sure ticket to financial freedom. Vacant land will take some time to appreciate in value until development gets to the surrounding areas. And when it does, you can be sure your land value is going to shoot to the sky like a rocket . Accumulating rental properties with positive cash flow is an equally perfect way to leverage as you can give yourself a yearly increment (you can increase the rent!) Besides, the property is quietly appreciating in value. It’s a win-win situation! The common denominator in both cases is TIME. All we have and all we got is TIME – 24 hours a day for each one, no less, no more. This is our greatest asset and if we fail to use our TIME to our maximum advantage, that’s when we still end up working till old age and retirement is a dream…way to go, young man. You got a great future ahead and your footprints are all over the land and cyberspace. Thanks for sharing!!
This great idea is not for all…only to those who have extra $…
What happens when the property is not rented out?? You still have to proceed with loan repayment.. with your available $$.
YK,
Refer to the comment I put up under Kelvin. Happy Investing
CK Wong
Great idea!
But I do wish that you can share with us your experience of dealing with tenants (the good and the bad) and how to properly choose tenants as these are the 2nd most crucial aspect of real property investing besides the property itself.
Thanks in advance!
Afiq,
Some idea for you appraisal;
1. Buying property at prime location like hospital, schools and college. This will increase your chances of getting good tenant like doctors, lecturer and student.
2. Interview the potential tenant. This will give you more details on their salary date (the most important)
3. Stick to 2 month deposit + 1 month advance & utility deposit. This is to prove their repayment capability. Its a non negotiable requirement.
But doing all the above you might not get the best tenant also. In life sometime also I also don’t know why some people is having bad repayment habits. Its part of the rules that we need to adsorb. Happy Investing.
CK Wong
Yes, that is the concern bugging me too, YK.
*responding to YK comment which address if the property is not rented out*
My question below is related to that comment:
How can we secure financing from bank if our committment is actually above 33% (one thrid) of our monthly income? Although we know that rental will help to ease the loan repayment, but banks did not take that into account. Or even we acutally have the cash for the monthly repayment.
Please share your experience or advise in this area here. Appreciate that very much.
Kelvin,
The above problem can be minimize only.It cant be avoid. The few thing you can do to minimize the risk of property vacant is:
1. Focus on hot rental area with highly population area like near to town, university, hospital and college.
2. Buy below market value so that you can rent your unit below other normal unit
3. Increase your agent network so that can help you to rent out your unit faster.
But sometimes we really need to leave it vacant around one month. Its part of the rules. But don’t give up as in property if you can rent out for 11 month you are consider winner already.
Reply on your second question:
As a banker, I’ aware that the requirement of the bank is to fix repayment capability at 33% over your income. But a lot time the repayment capability is the secondary consideration of the bank. The main thing they are looking at is the repayment “HABIT”. So you must make sure all your repayment on your credit cards, personal loans, mortgage and other loans is up to dated and “NEVER” delay payment. If you are having fantastic records, bank will consider borrow more money to you. And another thing you must do is that, whenever you received rental, please bank into your account first before transfer to pay off your loan. This is to prove your income records in the event you want to borrow more in the future. Happy Investing.
CK Wong
ive rent collection for yrs but i never bother to update my bank book/hardcopy, so long as i see my ebanking if rent is in every month – ebank only store movement history for two months. so can say my yrs of rental collection record is ‘lost’ during HL application for next acquisition, if any. i belong to the very low income group.
any way i can show I’ve steady rental income?
i know its not the right topic but what do u tink of property burst. u probably have not written a post on it b4?
what are the factors to be immune in bubble burst? i know for one is buy good location properties. second, im guessing that we should hv low gearing. wht ur comment ,for discussion
HI,
Friend, You can get yuor bank record for whole year from the bank. Don’t worry on this and furthermore bank will love to have your “STAMPED” copy of your tenancy agreement as a proof for your rental income. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
ohya another thing. is really delaying a mth or two on my cc payment *that* bad for future loaning?
im a very moderate/thrifty/practical cc user with combined outstanding balance (3 cc) of no more than rm200-500, & never later than 2 months. the only downside is late payment sometime, thats all. i cleared ‘em all.
if my eonbank credit card has bad record of late payment, is my record only bad for future loaning with ONLY eonbank or all banks across? if u know what i mean : )
HI,
Banks look it at another perspective, imaging if you don’t even pay me RM200 per month, how you can expect me to borrow you extra RM200K?? Right? Nowadays bank system is linking to Bank Negara, so every cent you owe to any bank in Malaysia will be seen by all banks. So if you owe and having bad records with EON, any banks will know when you submit your loans. So DONT PLAY PLAY with the banks since you need them badly in wealth building. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
wong,
it is just easy to say….while if time is hard, you don’t really get so easy rental income. Then it become deficits.
Simon,
Life is not easy at all time. But the difficulties can be minimize. Don’t be so negative. As I say its part of the rules that we might need to asbord into our investment guidelines. Happy Investing.
Ck Wong
you are lucky bcoz you in KK
market in west Msia is quite aggressive. Where lots of good deal always belongs to the rich while people here just enough to earn a living and a new life. Esp those coming out from the town to work in KL
KK people can consider rich. Things are expansive. Market is narrow, chinese still consider rich. Doing biz, making money.
Simon,
You are right. Kota Kinabalu market is fantastic. Where are you from? Sound like to place is not fantastic at all?I always believe different place have different opportunity. Try capitalize on it. Happy Investing.
Ck Wong
Just curious, let assume if I manage to provide RM30k for the initial capital every year and my current salary is RM3500. Am I be able to get a loan from bank to buy my third property if i have already got 2 loan earlier for 2 different properties? As far as i’m concerned bank would only approve a loan which is not more than 30% of our salary. Please advise.
Rahmano,
Yes. But my question is, are you renting our your existing 2 property?Make sure your do proper documentation on the tenancy and bank in all the rental income into bank before you start paying your loan. This will help in getting additional loan in the future. Bank will consider rental income as one of the repayment resources. Happy investing.
Ck Wong
CK Wong,
Thanks, now i get the idea
hi there. is the rate fixed @ 4.5% realistic ? I don’t see such rates around. one being 6.99% fixed by aia, that was before the financial turmoil. mind to share your wisdom on the rate of 4.5% ?
Hi,
Frankly I dont like fixed rate. Why you want to pay higher interest of 4.5% if you can get BLR-2.4% in town now(depend on your loan amount)? Of course alot of people say BLR will go up but base on my view, within the next 3 years BLR will remain around this level as the government want to stimulate the economy further. Happy Investing.
Ck Wong
Hi CK,
Wow…you were saying you have 29 properties currently? All in KK? That’s Awesome! I’m learning a lot from your blog…keep posting please!
Christina,
anyway hope you enjoy reading my blog. Happy Investing.
I think you have got the wrong no. I only have 23 in the list. I wish to add more but lack of capital
Ck Wong
well, both had pro and cons. a blr-2.8 might be good for 3 years, but in the long run 4.5% sounds good to me so far.
CCY,
Which bank is giving such rate? Bear in mine, bank also doing business for profit. If busines is not profitable I dont think they will do it. Happy Investing.
Ck Wong
hi ck. i don’t know why, i had some personal sense that 4.5% fixed is a gd thing for conservative mindset for a continuous cash flow for >5 years. we could sleep better at night for the rest of the years.. ha ha ha. blr-2.8 for first year and -2.4 for remaining years for premier bank customers if accepted offer within 3 days. thx for your sharing so far.
CCY,
Then you better accept it. I don’t think bank got profit to make. Anyway Happy Investing.
Ck Wong
Wow, 23 properties. You must be full time collecting rental. Great job.
I have a question here:
From the summary table of 5 properties above, the investor still owes the bank rm 782k out of the 880k property value. It doesn’t seem like we are near a million dollar target, because about 90% of these are bank loans… We still need to wait another 30 yrs tenure, am I right?
Unless we die tomorrow and all is paid up by insurance cover.
Yong,
You are right. But you don’t forget your rental will continue coming flow into your account to settled the loans. While the market value is gradually on up trend. You are winning both way. Any other tools better than this? Just for your information out of 23 properties I have, 80% is in vacant land which silently making money for me. Happy Investing
Ck Wong & KH Wong
Hi CK,
What’s ur opinion about putting the properties under personal name or a sdn. bhd.? Which options did you opt for?
What do you think of auction property currently ongoing? I’m thinking of acquire apartments @ beverly hills area, but was told that I will have a hard time collecting rental due to the tenant profile there. What’s your POV?
Thanks!
Shirley,
If your numbers of property is alot..of course using company (like Sdn Bhd) its going to be more economical. Otherwise I think better stay under individual name. Of course its all depend also on the types of property you owned.
Auction list is not alot lately despite economy down turn. I don’t think KK property market affect. So watch out more on subsales. Beverly Hills is targeting for medium and lower level of tenant, so its expected the rental collection is not going to be smooth. Happy Investing.
CK Wong & KH Wong
Hi CK,
You seems to signed off with combined name KH Wong. Anyway you have 23 units of property in your name. I didn’t think It came about without hard work . I read your background , you mentioned you were from Sarikei. I bet you are a fuchow . Fuchow is one of the most sucessfull dialect group among the chinese in terms of business and wealth creation. Their frugal and thrifty lifestyle plus hardwork make them a formidable force in the business world , example Robert kwok, the richest man in Malaysia. My wife side of the family are all Fuchow. I met lots of them during our family reunion in the US . Some of them came out of China during the Cutural Revolution to US with almost nothing. Today most of them became very sucessfull but they still practised their thrifty lifestyle which we all can learn from. I really admired them. They ‘tapau’ the food home ( that most westerner just too shy to do it) if can’t finished during our dinner. That go to show they don’t waste.
Hey Ck please share with us more of this tips how you make it
Thanks
Azlan ( The Lion)
Azlan,
You’re right. I’m pure foochow. I dont think I’m that successful so far compare to my dad who is even more success in terms of wealth accumulation.
“KH Wong” is my father name and I appreciate very much of his sharing and guiding to me so far. I believe most of my basic philosophy of land investment is from him. Thanks DAD. That why I will pass all these knowledge and guidance from my dad to all of you. Hoping this will also help you of all in creating your wealth for better future. Happy Investing.
Ck Wong & KH Wong
CK,
It’s a very encouraging story indeed. And thank you for sharing all your knowledge and experiences with us.
Azlan
Azlan,
Life is full of sharing. Its happy to see people around us enjoying the same like what we are enjoying. Happy Investing.
You cannot Grow Land.. Ck Wong & KH Wong
It’s a great blog opened up my eyes, I’ve read almost all your posts thanks for sharing your knowledge with us, you definitely inspired me =). I am a uni student turning 23 this year, raised in a below average family. I should really start digging my head on how to gather my first downpayment
Hi,
Congratulations to you, hope you will join the club soon. Life is too short for us. So why not work hard at the beginning few years then enjoy our entire life without worry on our finance. Happy Investing.
You cannot Grow Land..CK Wong & My Dad
What do you do when your tenants try to delay their rentals? Initially it was just a few days, now they have asked to pay next month (2 months).
What can we do? I am outstation and tenant is in KK, we are only in contact by phone.
Joe, I sympathize with your problem as it is “part and parcel” in the art of property investment. Since I had invested 15 years in this industry, normally we have to cut loss or you will lose further more!!. If the tenant is “dilly dally” in paying rental, it is time to kick him out as good paymasters are plenty in the market.Give your tenants maximum 2 months arrears and ask him to settle in full or out you go!!!I have a freind who didn’t “sack” his tenant although he didn’t pay for the last 8 months….So the choice is yours…As for your case, you can always hire a housing estate agent to collect on your behalf and his chargeable rate is 5% of your rental rate…
Hi,
Bad tenant is part of the pain thing that we must calculated into our investment. I also met bad tenant also. I will keep SMS and Keep calling..until the extend wait them in front of the unit. If you are purchasing apartment or condo even better, ask the security guard to inform you the tenant movement. Sometime we really got no choices. That why I always try to purchase below market value property and rented out at below market prices. This will minimise the bad tenant. But sometime I really dont understand how they dont keep their promise…Happy Investing.
You cannot Grow Land..CK Wong & My Dad
Hi CK,
Which is better…buying completed unit or under construction unit?
Hi,
Completed as there is no completion risk. Furthermore the location is more matured and definetly commanding better rental yield. And the most important is you can be “below Market value” property in the subsale market. Happy Investing.
You cannot Grow Land..CK Wong & My Dad
Hi,
Assuming all conditions are same (location, entry costs…..), which one is good for investment, landed property or apartment/condominium?
HI,
Non-landed because..
1. Command better rental yield
2. Life sytle – ppl are getting more and more lazy
3. security
4. less renovation cost
5. fully utilised on the unit unlike landed you might not utilised the whole land size.
Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
My tenant has not paid the december rental despite numerous reminders. This has now spilled over to the 2nd month.
He has the intention to vacate in April and is now delaying the rental. What can I do? Shall I kick him out now? or wait till the end of the month ( afterall he has 2 months deposit with me that expires on 31.1.10).
I have explained that the deposit paid upfront at the beginning of tenancy, does not cover the last 2 months rental ie they cannot contra the rental. What would you do in such a case?
HI Jeo,
Of course they can use that deposit to “contra” against the future rental but normally I remind that on this. If they insist of usign it. I normally issued letter to them to confirm the date they move out. No point argue with them as they simple dont want to comply to your rules. Its part of the losses that we need to absord and sometimes landloard need to be patient.Its the rules to become RICH..Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
When they contra the 2 months deposit with the last 2 months rental, the risk is that they will vacate at the end of 2 months, leaving behind a string of destruction. We have no more deposit at hand.
My previous tenant in api2 did just that. They wanted to contra the deposit with the rental, and finally left with a big mess in the apt. The kitchen and bathrooms were totally destroyed. Betul2 ganas.
Repair and cleaning cost me rm2k.Now I can’t sent them the bill.
HI,
As I say, its part of the rules. Nothing much we can do. Just try to find the best tenant. Meanwhile look for more prime location hoping we getting good tenant end of the day. Luckily yuor tenant moving out as some in worst case they dont pay and dont want to move out. This is double loss. So bear with it. I’m reducing my residential properties nowadays and now focusing more on commercial since the rental is higher, different tenant market and more capital appreciation. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
If they don’t move out, I will normally cut of the water supply, later the electricity supply. Haven’t tried it yet. I suppose it will work.
Hi,
You can do that also. But just afraid they will make your unit worst since there is no electric and water supply. So its all depend on situation. I alway call them irresponsible tenant and hope they will remain poor forever. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
hi ck,wondering which bank offers the whole tenure fixed interest rate for housing loan currently?
Hi,
Bank are not offering any new FIXED rate packages. Normally they will give between BLR-1.8% to BLR-2.4% depending on your loan amount and your financial credibility. You can get islamic packages if you want a fixed rate but strongly discaurage. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
Thks.Is there any property websites beside mudah.com, thinkproperty.com,sabahproperty.com; that will give us rent/sale details for properties in sabah,especially KK area?
HI,
So far no more expect for daily news avaliable locally. Happy Investing.
You cannot Grow Land..CK Wong & MY DAD
myprop.com.my
wtw.com.my
danaharta.com.my
malaysialand.com
indonesia-property.com
rumahmewahjakarta.com
indonesia-property.com
fullhouse.com.my
realestate.net.my
rumah123.com
sabahprop.com
propertykita.com
rumah4sale.com
olx.com.my
propnet.com.my
malaysia.realestate2u.info