How You Can Become a Multi-Millionaire Real Estate Investor!!

1. How You Can Become a Multi-Millionaire Real Estate Investor!! byMilan DoshiBest-Selling Author & Independent Financial Trainer

2. Mastering the 6 Golden Success Rules in Life

3. 1st Golden Rule In order to EARN & INVEST More You First Need to LEARN More

4. 2nd Golden Rule Another Way to LEARN & GROW is by NETWORKING with other like-minded people

5. 3rd Golden Rule EARN As Much as You Can, As FASTAs You Can

6. 4th Golden Rule SAVE (not necessarily min 10%) As Much as You Can

7. 5th Golden Rule BORROW(always ensure Potential Returns > Borrowing Costs)As Much as You Can

8. 6th Golden Rule INVEST WISELY As Much as You Can

9. In the Long Run, it’s not How Much Money You Make that will determine Your Future. It’s how much of that Money You Put to Work by SAVING It, & by INVESTING It (wisely) ~ Peter Lynch

10. RISKS versus RETURNS of Various Investments Where Does REITs and Properties stand vis-à-vis Other Investments

11. Offensive Investments Potential Return * FOREX/Options/ Commodities/etc * Hedge Funds (>30% pa) * Stock Market (20-30% pa) * Property * Equity Funds (10% pa) * Bonds/Bond Funds / REITs (6-8% pa) Inflation * Endowment Policies (2-4% pa) * Fixed Deposits (3% pa) Risks

13. Appreciation of = 45% pa over 1 year (Rights/Divids excluded) A-REIT(listed Nov’02)

14. KLCCP Bhd – the closest to a REIT Appreciation of = 21% pa over 10 months (Rights/Divids excluded)

15. Benefits of Investing in REITs Portfolio Diversification - REIT’s own Multi Properties, Diversified Tenant Pool, Different Lease Lengths, etc Income Distribution - 90% of Net Income is distributed to unit holders as dividend. No Tax on Rental Income.

16. Benefits of Investing in REITs Participation in the Property Market - You can own small stakes in big properties Professional Management - No worries about Tenant and Property Management

17. Benefits of Investing in REITs High Liquidity - Can buy and sell as normal shares Low-Risk, Stable Investments. Low Correlation profile against other asset classes Low Transaction Costs - Same as per shares

18. Market Capitalization of REITs Singapore: 2% to 3% (S$4 billion) Australia: 8% to 9% Malaysia: High Growth Prospects Upcoming REITs: Axis (Offices + Warehouse) - listed YTL (Hotel + Shopping Center), Sunway City, Landmarks (Sg.Wang), MRCB, KPJ Healthcare

19. Official versus “Unofficial” Inflation Official Inflation Rate: “Unofficial” Inflation Rate: 2 - 4% pa 6-10% pa

20. Types of Property Investment Strategies

21. Buy from Developers and Resell Upon Completion Important to Buy the … From the Right Developers Right Property Type in the Right Location at the Right Time & Price

22. Sell on Completion 2-3 years at 20-30% higher Repeat the Formula!

23. Example Sell on Completion 3 Years Later … Book Apt @ 500K D/P = 100K (-) Loan = 400K Sell @ 600K (?) Loan @ 6% = 435K Profit = 165K (+) Gross165K – 100K Profit= ------------------ % = 65% over 3 yrs 100K = 18.1 % pa (compound)

24. Disadvantages !! Price is Cheap but the RISKS you take are extremely HIGH Makes Sense to Pay Slightly More to Buy Ready Made.You know exactly what you are getting + the Risks is much lower

25. Structuring Your Property Portfolio

26. 5. Raw Land/ Development 4. Commercial Properties (Shops, Offices, Factories, Warehouses) 3. Ready Made – Buy for Appreciation (Landed Houses) 2. Ready Made – Buy for Rental Returns (Medium Cost Apartment)

27. 2. Buy Ready-Made Medium Cost Apts – Buy for Rental Returns Rental Returns: 7-9% pa Appreciation: Poor (< 2% pa) Easy to Buy with Zero D/P and +ve C/F(suitable for beginners) Tenant Mgtm will be challenging

28. 3. Buy Ready Made Landed Houses– Buy for Appreciation Rental Returns: Poor (3-5% pa) Appreciation: Good (3-5% pa) Total Returns: 6-10% pa With minimum D/P, you will have –ve C/F (Rental < Installment) Timing is very important HIGH RISKS due to –ve C/F

29. 4. Buy Commercial Properties Rental Returns: 6-8% pa Appreciation: Good (3-5% pa) With minimum D/P, possible to get Zero C/F (Rental = Installment) Location extremely important Possible to get “Lifelong” Tenant Suitable for Wealthy Individuals

30. 5a) Raw Land – good way for the super wealthy to “park” their surplus funds for their future generations Tip: Buy in Areas where the growth is heading towards b) Plantation – expertise needed

31. 5c) Homesteads d) Property Development– your ultimate aim to make profits of 30-50% per project

32. 6. Buy Basic or Run Down Properties, Renovate, Sell Off Example: Garry bought a run-down bungalow in Bangsar @ RM1.5m Tear Down + Rebuilt + Furnish = RM1m Sold 6 months later @ RM3.3 m Gross Profit = 800K for 1 year work

33. 7. Specialize in Abandoned or Haunted Properties …. if you can find the owners. Restore the property back and sell it off.

34. 8. Specialize in Auctions All auction properties are sold on a “as is, where is basis”. Clause in the Proclamation of Sale stating “Prospective Bidders are advised to inspect the subject property and check on the issuance of separate individual titles/strata titles, seek Legal Advice on the Conditions of Sale, conduct official parent Titles search at the relevant Land Office and make the necessary enquiries with the Developers and/or other relevant authorities on the terms of consent to the sale prior to the auction sale”.

35. 9. Buy in Areas where Accessibility is being Upgraded Example: Old Klang Road, Kesas, new Guthrie highway, etc

36. How You Can Retire a Multi- Millionaire via Properties

37. Goal: Become a Millionaire by the time you Retire by • buying 1 medium cost Apt worth RM100K every 5 years with b) Zero to Positive Cash Flow with the Potential for Long Term Appreciation.

38. Assumptions: 1. D/P = 25K (25%) so that C/F=0 => Saving of RM416/mth x 5 years 2. Loans @ 8% for 20 years 3. First Apt @ 30 years is own use 4. 1 Apt bought for Investment every 5 years starting at age 35 until age 55 years 5. No Inflation & Compound Interest

39. Property Investment Time Line

40. Prices of Milan’s Books: RM69.90 RM49.90 RM39.90