Review of 'Secrets of Property Millionaires' by Rayney Wong (Part 1)

Hi Everyone,
I recently read through one of Singapore's property gurus books, which is Secrets of Property Millionaires by Rayney Wong.

Basically I noted and highlighted some info that I feel is good and informative for most of us. This blog post is more or less the summary of Rayney Wong's book.

In Chapter 1
The book mentions that the Average Joe usually have no knowledge and thinks that you need a lot of money to invest in property. Rayney also mentioned that in land-scarce Singapore, what else but property?
"Knowing your enemy is your first giant step towards conquering your enemy."

Properties are an excellent hedge against inflation.
Property Investment is a form of forced savings, which would appreciate over time.
- Rental returns are also a good source of income.
- Pay off capital and interests.

Rayney also mentioned that we should leverage on bankers' money to buy properties. e.g $1mil property need outlay of $20k only.
-No capital gain tax in Singapore.
-Properties create and maintain wealth for long-term investor.
-Rich become richer because they know how to invest in real estate (e.g.Walmart, Mcdonalds)

Chapter 2 - Timing Your Entry
Note: Bargain buys may not be Bargains.

Rayney's story --> In 1996, I purchased 3 semi-D houses at Limau Garden, each costing $1.8-1.9mil.
Only had 99-year leases but were part of prestigious Kew Vale Collection.
-Thought that it was a bargain as bought at bulk purchase discounts of up to 18% off their listed prices. Land area approx 2800sqft, with hudge built-up areas of about 3770sqft.

Back then, it seemed like a great buy. It turned out that these houses are bought at close to peak of the 1993-1998 property cycle. 2 years after purchase, there's the economic downturn. Rental from $7000/mth drop to $2600/mth. 1 year later, Rayney sold one of the 3 houses at $1.2mil, a loss of $600k.
 --> The house was sold to reduce liability, as don't have the holding power.
In 2007, the next property boom came and sold the houses at $1.2mil each. But total loss is $1.3mil. If held on till 2010, it would increase to $1.4mil.
This is a live example of a property disaster.


Property Tips1
-Buy during window periods --> just when property market begins to turn upward.
-Monitor the Market, to know what properties are good buys and what prices you should seek to buy them at.


2 Visible Factors when you call a BUY
1) Property prices you have been monitoring Must have fallen close to or below the previous transacted prices during previous down turn.
2) Spot the first sign of upturn or recovery.

Be on the Constant Lookout for Good Buys!

Guidelines in Monitoring Market
1) Check out classifies Adverts in Straits Times and check Internet for latest transacted prices.
2) Befriend real estate agents specializing in the same development or condo.
3) Visit as many new launches as you can.
- Make effort to view properties that are for sale in resale markets
- Make every effort to monitor property prices in a falling market.
- On a daily basis, make comparisons between the current property prices and prices previously witnessed during the downturn of the last property cycle. It's most important to feel the market's heartbeat.

First Signs of Recovery often goes unnoticed.
- Be aware that properties you monitor have sold more quickly with less haggling of prices.
- Property prices then firm upwards.

Overnight Changes
It is during such terrifying times (crisis) that we must double our efforts to sense the 2 Factors that signal entry into the property market.


Chapter 3 - Flipping properties for Quick Profit
- Flip only with minimum outlay of 1% of property purchase.
- Option-to-purchase is sold for a quick profit in a flip.
My Comment--> However, I feel that in the new property rules implemented, it is not profitable to do a flip.
Stamp duties payable within 14 days from date of sale and purchase agreement.

Differences between Developer Projects and Resale Market
Developer Projects - easy availablility.


Chapter 5 - Property Sharing Arrangements
Investment in percentage stake in shareholding.
Important guidelines for Group Power.
-All partners must possess high integrity.
-Don't run afoul of rules relating to solicitating funds from public, only can approach friends, relatives and business partners.
-Joint property sharing ventures often take the form of Pte Ltd companies. All property JV must at the start provide specific terms in an agreement to bind all involved parties. Term must be well though out, and even the most remote and obvious term must be included and put in writing.

Methods of Property Sharing
1) Co-Ownership by individuals
a) Joint Tenancy - aka Joint owners;
- law relating to rights of survivorship pverride any will executed by a joint owner. (family co-own usually suitable)
b) Tenancy-in-common - shareholding of property is specified from beginning when property is transferred to them. Death of a co-owner, his share passes to his estate or to his executors and beneficiaries in accordance with his will or by the law of intestacy.


Yup, that's all for now. I'll continue on the summary and review of 'Secrets of Property Millionaires' by Rayney Wong, in my next blog post. Keep in tune!