Property Guide
Azizi Ali, captain of his domain
Azizi Ali, 48, is as versatile as it gets. A pilot, publisher, property investor and coach, author, qualified financial planner – or to put it succinctly an all-round entrepreneur. A voracious reader (he reads three books in a week!), unsurprisingly Ali credits his success to his healthy appetite for knowledge. He quips, “The more books on money matters that you read, the wealthier you will be. This is not just a tagline. It is the truth. I wish somebody had told me that 30 years ago!”
Most of us would’ve heard of Confucius’s quote, Choose a job you love and you will never have to work for a day in your life. Ali is a fine example of “living” that advise. His five-figure income is derived from his passion. As he puts it, he does not have to work but finds no reason to retire from doing what he loves. He says, “I only do things I like in my life. I like to fly. I like to write. I like to speak. I like business.”
StarProperty.my chats with the high-flying Ali about his passion for money matters, his successes and a music business that cost him RM100,000.
Tell us about yourself. How did you start in property investment?
When I started my career, despite being hardworking, I only made little money. I did not have any financial knowledge and was broke most of the time. This went on for about four years. At that time, I was about 20 or 21 years old. I started my career very young. I am a pilot by profession.
Are you still a pilot today?
Yes. After a while, I wondered if I will be living hand-to-mouth until retirement. I wondered what was wrong with me. Even my colleagues then, even if they were older and married, and making the same amount as me, they were doing okay but I was broke. So something is wrong. I realised what was wrong was my knowledge of financial matters, which was practically non-existent. So I started educating myself on financial matters. The intention was not to become a millionaire, but so that I would not be broke again. This was in 1985, where there were not as many books on money matters. So to educate myself, I did what most people would do. I asked people who I thought were experts at the time. They gave advice but they were not the real experts. Though their advice was not all wrong, but it was incomplete.
As I educated myself, I began to have some money. I wasn’t broke anymore, which was great. I read more books and asked more people. But after a while, I realised that some of the advice given was opposite of what the books said. After a while, I leaned more on books. I was repeating the formula of reading more books and I knew it was working and have enough money for investments. So that’s why I tell people today, the more books on money matters you read, the wealthier you will be. This is not just a tagline. It is the truth. I wish somebody had told me that 30 years ago. I would be a lot richer.
The reality is that much of the information out there is biased. For example, insurance. Who do you ask information from? Probably insurance agents. That’s why the information is biased. So people don’t make as good a decision as it could be. That’s why you have to get different points of view.
I started investing when I was about 25 or 26 years old. Like most people, the first place was stock market. I started reading books on stocks which helped a little. Like most people, I made a little money, and lost a little money. I did a lot of work. Most people rely on tips. All in all, I suppose that I did not make money from the stock market. After a while, I started investing in properties, and then business.
My first business was a music shop, selling cassettes and CDs, in 1990. In my eagerness to become an entrepreneur, I did research, but too little. In the end, after three or four years I lost over RM100,000. Now I can laugh about it. At that time, it wasn’t funny (laughs).
Why did your music business fail to take off?
Actually, if I had done proper research, I would not open the shop. I was blinded by the light of business, and was so eager that I jumped into it. There were a lot of things that I didn’t know about before I started. The margins were very low, less than 30% ? which means that I had to sell a lot to pay the rent. Plus, cassettes are so small and hence, easily stolen.
What did you do after that?
The good thing is that even though the business did not work, my personal finance was better.
You were doing other things at the same time?
Yes, just like now. Although my name is synonymous with property, it is just a small part of my business. We have to put the money from business somewhere. One of it is properties. It is very good but it’s not the only game in town. At the same time, my main business is still business. Property is just a small part. See, a couple of years ago, I bought a house for RM800,000. When it was completed, I sold it for RM1.1 million. So the profit was RM300,000 and at that time, RPGT (real property gains tax) was still at 30%. All in all, my profit was RM200,000 after two years. I suppose that’s not too bad. But in business, I can make RM200,000 per month. So where should I be concentrating on? It’s a no-brainer.
How old were you then?
I started my publishing business when I was about 37 or 38 years old.
When did you start investing in properties?
I bought a house for own stay in 1997. Property investment for rentals started in 1995.
What was your first investment?
Condominium, which I rented out. At that time, my formula is for rental. I have sold most of it.
What’s your property portfolio now?
Not a lot. I sold most of it in 2010. The net worth is maybe six million.
Why did you sell most of your properties? Is it because of the “property bubble”?
Yes. I was reading a few books that explained about the US crash. Some reasons was the low interest rate, user-friendly mortgage, questionable borrowers and current owners refinancing. I shuddered when I read it. It is exactly like in Malaysia. That’s why I wrote the article, “The US property crash, could it happen here?”. For most current owners, even if their house is almost paid off, they refinance to get the money to invest in other properties because property prices have increased.
What if these owners refinance to invest because they don’t have enough cash?
In that case, they could refinance but they have to be careful with the loan’s terms.
Do elaborate on “loan terms”.
This is how it should be. If the environment is of low interest rate with rising property prices, then take as much loan as you can. This is because you can multiply your net worth very fast, assuming that you can pay every month. That formula of taking as much loan as you can and buying as many as you can was correct one or two years ago. The environment has changed and will continue to do so. Interest rates have increased. There’s the LTV (loan-to-value) ratio of 70% for third property onwards. There are more things to come, some of which you and I have never seen or faced before.
Anybody with monster mortgages will be in serious pain. So back to your question of “If you have almost paid off but do not have the capital to buy other properties, should he/she refinance?”. The answer is yes, but don’t take too much and more importantly cap the interest rate. Don’t use the current fluctuating rate, based on BLR (base lending rate). It won’t be low forever. Just to share, I have one RM1.5 million loan. The rise of 75 basis points in 2010 has caused my payments to rise by RM500. This is only 75 basis points. Can you imagine if the interest rates rise by 2 or 3%? I also will feel the pain.
Do you go for residential or commercial properties?
For me, it has been residential all the while ? both condos and landed. I know that the big money is in commercial properties – higher rentals and capital gains. You need to have some knowledge of the commercial market because if you choose incorrectly, it could be empty for years. So you must really do your homework. But where there is danger, there are also opportunities. Now, I am looking at below market value properties. There are a lot of options now.
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“I do not only teach people on how to be rich. I teach people how to get rich, how to live rich, how to stay rich and how to die rich,” says Ali.
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When did you start investing in auction properties?
Before that, I was buying from developers. Now, my staff cuts and highlights the interesting auction properties. I can’t take them all. The quantity has increased significantly.
Are these auction properties in good areas?
Having said that, 95% are not interesting to me. But lately, the quality in good areas has also increased. In fact, I don’t even do this full time. I only spend 10 minutes every morning to look at it and go for the interesting ones. I share some with my clients.
Do you concentrate in certain residential areas?
I go for PJ. It saves me a lot of work because I am familiar with the area, the supply and demand, and the prices.
Do you do no-money-down strategies?
Yes, the whole concept is find one below market.
Are no-money-down strategies very difficult to apply with the LTV ratio of 70%?
Yes, it is hard, but it can be done. I think the LTV of 70% is good for most people. Otherwise, they might end up taking too much loans, which they can afford now but as situation changes, they might not be able to afford it. So this might save their life.
What are the common myths about auction properties?
Despite the quantity of auction properties, I would say that 90% are not appropriate for investors. One, incorrect locations. Two, nature of auctions – the first auction might be market value, therefore it is not appropriate.
For auctions, you must do homework. Actually, in all investments you must do your homework. Whenever there are opportunities to make lots of money, it also comes with opportunities to lose a lot of money, like gold. The price of gold is rising. I put much of my money into gold in the last couple of years, which I am happy about. At the same time, gold is also full of traps. If you buy the incorrect form of gold, you may not benefit even if the price is rising.
What do you mean by “incorrect form of gold”?
Jewellery. Is it gold? Yes it is. When you buy from shops, you pay more to cover for the workmanship and profit. In that case, you already overpay, already in the negative. When you sell back to the shop, you cannot sell at the same price you bought. At best, they will buy it back at market value. They will usually buy at market value, minus 25%. That’s two negatives. Three, you can only sell back to the same shop you buy from. Fourth, if you do not have the receipt, they won’t take it back and most people don’t know where they kept the receipt. Fifth, when you go back to the shop, you cannot get cash, but instead you can trade it in for another piece of jewellery. So, five negatives. From an investment point of view, it is useless. So despite the rising price of gold, you may not benefit from it. That’s one of the traps. To know more, you can read my book – Get Into Gold.
Do you conduct a lot of seminars?
About one in every three months.
What are your seminars about?
All about money ? property investments, investing in gold and information marketing.
Are they one-day seminars?
Yes, one day. I will cover the critical success factors for property investments. There are a lot of things to talk about properties. What you want to know is the critical success factors. One of them is buying below market value. Then you have to know the three elements of property investment which is physical, financial, and legal rights and obligations.
Financing is extremely important. Most landlords don’t make money from investments. So I share on how they can reduce these risks significantly. I share on how to reduce work, automate processes and system of doing this. An average investor takes loans that amount to a few hundred thousand, so they cannot afford to get it wrong. What more if the loans are in the millions. I am not only a businessman. I am also a qualified financial planner. So I look from both sides. I feel concerned for my fellow Malaysians when they lose their houses. When they search for mortgages, they only look at one thing, the lowest interest rate at that point in time.
What I do now is the personal coaching programme.
What are the terms and conditions that borrowers should take note of?
Flexibility of loan.
Are you referring to types of loans?
No, beyond that. The actual terms and conditions of the individual loan. For example, most banks have a lock-in period. That’s fine, but on top of that, some loans don’t allow you to pay extra. For some, you can pay more, but the extra payment doesn’t reduce the principal amount, which defeats the purpose. Some of them allow you to pay extra, but it must be in multiples of RM1,000, for example. I am not saying that interest rate is not important. But that’s just one of the criteria.
How much is the personal coaching programme?
The personal coaching programme is RM590 per month. When you sign up, you have to pay for five months in advance. After they sign up and meet me personally, we have one tele-seminar (seminar via telephone) for one hour per month. I will talk about specific subjects, for example, auction, estate planning, investing in gold, and so on. It is a conference call where all members will call in and listen. From time to time, I will also invite industry experts to talk. It is just like a seminar but through the phone. This is my inner circle coaching programme. Members can choose to continue after five months if they want to.
For urgent matters, they can contact me. They also get a free book every month and every four months, we have a mastermind meeting, where the whole group comes together and meet here (Azizi Ali’s office in Kelana Jaya). I do not only teach people on how to be rich. I teach people how to get rich, how to live rich, how to stay rich and how to die rich.
Most of the information that I share, I am doing it myself. So I know that it brings results. For example, investing in gold, I did the research and then I share. It is not just theory.
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Publisher and author: Ali’s company publishes various types of self-help books. Personally, Ali has written more than 30 books. He aptly advises, “Read as many books as you can about money matters. You will lead richer and happier life.”
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How many books have you written?
More than 30. They are all about money. Four on property investment – ‘How to become property millionaire’, ‘How to become millionaire landlord’, ‘Winning at property auctions’ and ‘How to pay off your house loan within five years.’ I also publish books by other authors. There’s one about ‘40 questions you want to ask your lawyer about property investment’, another about ‘millionaire real estate guide for beginners’ and also one about property auction.
When do you plan to launch your next book?
No target date yet. It never ends because the moment I finish one book, I start on another (laughs). Some people play golf. Some fish. Some scuba dive. I write. I am happy doing it. I can do it for days on end. It’s not work for me. We are always on the lookout for authors. It doesn’t have to be about money. I publish books on health, parenting, cats, and so on.
Any additional advice to share with our readers?
Read as many books as you can about money matters. You will lead richer and happier life. You need to learn and read because the world is constantly changing. Many of people are innocent and they don’t know what hit them.
Azizi Ali runs property seminars in Malaysia.
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New MRT comes our PROPERTY way…
A great deal of discussion has already been taking place about the Kota Damansara to Cheras Line.
The Kota Damansara – Cheras line is being touted as the first ‘MRT-capacity’ rapid transit line to be built in the Klang Valley. Some commentators are already starting to use the term ‘MRT’ instead of ’LRT’.
Potential route map (in red) of the Kota Damansara to Cheras line – image courtesy of The Star
The map above shows an approximation of the proposal for the line and we at TRANSIT anticipate some changes in the actual line.
Right now we do have some information about the expectations for the line which we are happy to share with you. For more information, keep on following TRANSIT. If you are interested, you can find a discussion on Skyscrapercity.com at this link.
General Expectations
Operations
Integration & Connectivity
Routing
Macam mana nak naikkan (Mark-up) Jumlah Pinjaman Perumahan ???
Kaedah ini boleh diguna pakai bagi membeli rumah siap (sub-sales property) dan rumah terbabit perlulah mempunyai harga pasaran (market value) yang tinggi.
Bagi mendapatkan 10% bayaran pendahuluan, bakal pembeli perlu berbincang dengan penjual rumah terbabit berkenaan pelan ini dan jika kedua-dua pihak bersetuju, harga rumah ‘dinaikkan’ sedikit di dalam S&P tetapi harga ini bergantung kepada harga nilai sebenar diperoleh daripada penilai (valuer) bertauliah. Sebagai contoh, jika sebuah apartment yang mempunyai nilai pasaran sekitar RM120,000 ingin dijual oleh pemiliknya secepat mungkin pada harga RM100,000, bakal pembeli mungkin boleh mark-up harga rumah itu semasa membuat pinjaman perumahan.
Ini bermakna, bank akan memberikan 90% pinjaman perumahan iaitu RM108,000. Dengan kaedah ini, bayaran pendahuluan seolah-olah telah dibayar oleh pihak bank terlebih dahulu. Walaubagaimanapun, kaedah ini tertakluk kepada budi bicara di antara penjual dan pembeli.
Bagi kawasan perumahan yang baru dilancarkan oleh pemaju, biasanya, tawaran istimewa termasuklah diskaun akan diberikan kepada pembeli terawal (early bird). Sebagai contoh, diskaun sebanyak 7% diberikan kepada bumiputera dan 3% lagi mungkin merupakan diskaun istimewa kepada pembeli terawal. Walaupun tidak banyak,sekurang-kurangnya, diskaun ini akan mengurangkan beban pembeli untuk membayar wang pendahuluan. contoh
Oleh yang demikian, anda dinasihatkan untuk mengkaji dengan teliti pakej-pakej yang ditawarkan oleh pemaju kerana mungkin ada manfaatnya kepada kita.
100 per cent loan for first-time house buyers those earning less than RM3000
1. FIRST-TIME house buyers with a family income of less than RM3,000 per month need not pay the 10% down payment under the My First House Scheme (Skim Rumah Pertamaku).
2. The 10% down payment will be guaranteed by Cagamas Bhd for houses priced below RM220,000.
3. This will allow the first-time buyers to obtain 100% loan.
4. They will also be given stamp duty exemption of 50% on instruments of transfer on a house not exceeding RM350,000.
5. The Government also proposed a stamp duty exemption of 50% for loan agreement instruments to finance first-time purchasers.
6. There will also be a housing assistance programme with an allocation of RM300mil for the construction and repair of some 12,000 houses nationwide – particularly in Sabah and Sarawak.
7. For estate workers, the Government will help them own houses under a RM50mil housing sponsorship scheme.
8. The scheme is open to all Malaysian estate workers to assist them in obtaining housing loans with a maximum of RM60,000 for the purchase of low-cost houses at 4% interest, and a repayment period of up to 40 years, which can be extended to the second generation.
9. For government servants, the goodies include an increase in the maximum loan eligibility from RM360,000 to RM450,000 effective Jan 1.
Budget 2011 surely boost up property market and benefit for those searching for a first house.
Malaysia ranked as best place to retire in South East Asia
Malaysia is the best place in South East Asia to retire, according to an annual survey published this week. The International Living magazine’s ‘Best Place in the World to Retire’ report ranks Malaysia as the top country in the region, and ranks it 19th globally.
Thailand is ranked at 25th spot and is the second best place to retire in the region. The survey assessed a number of factors to produce the ranking. Real estate, including pricing, value for money and ease of buying for foreigners, made up 15 per cent of the weighting.
Steenie Harvey, speaking to Property Report on behalf of the publishers, said: “One of Malaysia’s strengths is that it offers the Malaysia My Second Home retirement program. And, unlike elsewhere in the region, foreigners aren’t solely restricted to buying condos – they can also purchase landed property.” Harvey added: “There’s also no need to learn a foreign language.
Once part of the British Empire, Malaysia is a multicultrural melting pot of Malays, Chinese and Indians. English serves as a second language. The cost of living, whilst lower than Europe and the United States, is not as low as other countries in the region, and the fact it’s a majority Muslim country also deters many Western investors, according to the publishers. Thailand’s strengths, according to Harvey, include a wide choice of locations and really low day-to-day costs, especially away from tourist beach resorts.
Drawbacks here include the fact that foreign buyers are restricted to condominiums, the political turmoil of recent years, and the country’s reputation in the minds of some potential retirees as a sex tourism destination. Top of the list for the second year running is Ecuador.
Source from PropertyReport.com
Datuk Azman Mahmood, upscale property market, part 1
Legal Fees (Sales and Purchase Business Property)
“What is the legal fees I that have to pay?”. Usually this is the first question to be asked by the client to the lawyer. Therefore, I take this opportunity to explain how to calculate the total legal fees for the transaction was a home / property.
Scale in the SRO were as follows: -
1. For RM150, 000.00 – 1.0%
(Subject to minimum charge of RM300.00)
2. For RM850, 000.00 onwards – 0.7%
3. For RM2, 000,000.00 to the next – 0.6%
4. For RM2, 000,000.00 to the next – 0.5%
5. For RM2, 500,000.00 to the next – 0.4%
6. If the total purchase price of more than RM7, 500,000.00,
fee imposed at the discretion of counsel,
but can not exceed the rate of 0.4%.
Example calculation 1: -
The purchase price of the house / property = RM200, 000.00
1. RM150, 000.00 * 1% = RM1, 500.00
2. RM50, 000.00 * 0.7% = RM350.00
Total legal fees = RM1, 850.00
Example calculation 2: -
The purchase price of the house / property = RM2, 000,000.00
1. RM150, 000.00 * 1% = RM1, 500.00
2. RM850, 000.00 * 0.7% = RM5, 950.00
3. RM1, 000,000.00 * 0.6% = RM6, 000.00
Total legal fees = RM13, 450.00
However, the house / property is bought from the developer under the “Housing Development (Control & Licensing) Act 1966″, the scale of legal fees is a little different is as follows: -
1. 250
– For properties priced at RM45, 000.00 and below.
2. 75% of the appropriate fee
– For properties worth more than RM45, 000.00
but not more than RM100, 000.00.
3. 70% of the appropriate fee
– For properties worth more than RM100, 000.00
but tidah more than RM500, 000.00.
4. 65% of the appropriate fee
– For properties worth more than RM500, 000.00.
Sample counts (take the example calculations 1): -
The purchase price of the house / property directly with developers = RM200, 000.00
Mean, Item 3 above will apply.
Amount of legal fees should = RM1, 850.00
70% from RM1, 850.00 = RM1295.00
This means, if buying property is made directly with the developer, the total legal fees are cheap and discounts granted. But remember! discounted legal fees may only be granted if the purchases are made direct with the developer.
Hope this information helps readers of this blog. If you have any questions, you email me at admin@jomproperty.com
P / S: – Remember the above is only for the amount of legal fees only and does not include expenses that are known as “disbursements”.
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