Posted by dakhoos in Land Banking
REAL ESTATE INVESTMENT IN CHALLENGING TIMES
You are invited to our seminar:
Sunday 12 April, 2009
Cornwallis Suite, E&O Hotel, Pg.
11am-12.30pm or
2.30pm-4pm
Free entrance. Please call to confirm.
READ “THE STAR” Metro North edition, coming out on Thursday, 9 April, 2009 or go online the next day at http://thestar.com.my/metro/north
Wealth Creation, Wealth Preservation and Wealth Maximisation.
YOU have inherited immense wealth and what do you now do with it now that the world is going through another round of financial crisis? “History repeats itself”.
- Crash of 1929/30
- Dotcom Crash 1981/82
- Stock Market Crash 1987
- Asian Financial Crisis 1997/98
- USA Recession 2001
- Global Sub-prime Crisis 2008/09
YOUR duty is not only to further create more wealth but more importantly, to ensure preservation and maximisation.
Just keeping safely the wealth created will see a negative return on your wealth due to low bank interest rate and high inflation rate.
At 5% inflation per annum, the purchasing power of RM10,000 would be reduced to RM3,585 in 20 years. Imagine what will be the value with the current inflation rate at easily 7% or more?
If you make an investment of RM10,000 with returns of 100% in five years, and compound it over 20 years, the nett return would be RM80,000.
When is the bottom for the equity market? … 6 months, 1 year, 2 years? Only God knows. Many forms of investments are tied directly or inversely to the equity market: bank interest, bonds, stocks, mutual funds, insurance, reits; even forex, commodities and precious metals.
How much did you lose in the current downturn in your equity investments?
Anytime is a good time for real estate investments. Only the strategies differ.
In good times, almost every type of property and every strategy is good.
Types of Real Estate:
- Land
- Residential Properties
- Commercial Properties
- Industrial Properties
Strategies:
- Buy and hold
- Auctions
- Foreclosures
- Liens
- Seller Financing
- Flip
- Fixer-Uppers
- Single Home developers
- REITS
- Land Banking
In good times, you can even make money just by placing reservations with developers for new projects and transfering your bookings for a profit; or buy and “flip” ready properties.
In bad times, you need to buy and hold. It is the best time to scout around for a “gem” and “polish” it until the next upturn of the market. This is called the strategy of “fixer-upper”, buying old properties and make improvements to it to enhance its value.
In Penang, there are now over 500 pre-war houses that need to be upgraded or restored, according to its heritage status and location.
You need to look for a “gem”, pay RM300,000 and invest another RM200,000 to enhance it and then sell for RM750,000!! Profit of 50% in one year?
In bad times, there are opportunities to negotiate for pre-auction sales, pre-foreclosures and even negotiate with “motivated” sellers to take over their properties by just taking over their mortgages… “making money with no money down,” especially if their properties are being rented.
The property price trend is one of going up … flat … down a bit … and then up above the previous peak. Over the century, property prices have risen average of 30% per annum.
“Real Estate cannot be lost or stolen, nor be carried away. Purchased with common sense, paid in full, and managed with reasonable care, it is about the safest investment in the world,” - Franklin D Roosevelt, former US President.
“Ninety percent of all millionaires become so through owning real estate,” - Andrew Carnegie.
Land prices also show similar characteristics. Land prices in Batu Ferringhi, Penang: 1988 RM18.00 psf; 1998 RM60,00 psf; 2008 RM200 psf.
Investments in land is the game of the rich and famous.
“Landlords grow rich in their sleep,” - John Stuart Mill.
Originally, all land was owned by the King, and is called “royal estate”. Later, when the King distributes his land to his men, these land became to be called “real estate”. In modern times, land ownership became the domain of people like Donald Trump, Li-Ka Shing … and in Penang, the late Tan Sri Loh Boon Siew .. and even the Khoo Kongsi.
Today, with land banking companies, especially those from Canada, land ownership has been made affordable and within the means of ordinary folks.
WHAT IS LAND BANKING?
Land Banking is buying raw land, put a concept plan on it, the land values increase over each stage of planning approval, and then sell to home builders for a profit.
In my 5 years’ experience in Land Banking I have seen investors buying at C$75,000 per acre in 2003 and exiting at C$135,000 in 2006, almost 100% increase in 3 years or about 35% per annum return on investment. This was advertised in our national newspapers in 2006.
“Buy land, they’re not making it anymore,” - Mark Twain.
“It’s tangible, it’s solid, it’s beautiful, it’s artistic, from my standpoint, and I just love real estate,” - Donald Trump.
BENEFITS OF LAND BANKING
- Profits in rising and falling markets;
- Absolute targeted returns of 15% to 20% per annum;
- Capital Preservation with Beneficial Land Title registered in your name;
- Affordable minimum investment sum C$10,000;
- Hassle-free, Armchair investment;
- Hedge inflation;
- Hedge currency;
- Diversification: investment portfolio, assets in STABLE G7 country
WHY CANADA?
- Diversify your assets in a STABLE G7 country
- The only G7 country that does not need to bailout its companies
- No sub-prime problems (less than 1% of world’s problems)
- The only G7 country with banks’ rating “Aaa”.
The 4 Factors Essential to Land Banking:
- Population growth
- Economic growth
- Political stability
- Financial stability
TSI INTERNATIONAL
Established in 1997, headquartered in Toronto, Canada, with businesses in:
Land Banking Investment
Real Estate Development
General Contracting/Construction/Urban Renewal
Property Management
PROJECTS ON OFFER
1. Halton Park, Ontario: C$10,000 per unit (C$150,000 per acre). (Project just sold out)
142 acres of prime property within the GTA. Adjacent to Milton Business Park and Mansewood and 401 King’s Highway, North America’s busiest highway, 22 lanes in certain intersections.
Targeted exit within 2 years. Current listings by brokerage firms in Ontario for subdivided lots in neighbouring project at Mansewood are valued at C$450,000 per acre. Source: Colliers Macaulay Nicolls (Ontario) Inc., Brokerage. Property valuer, RAE Appraisals & Consultants Limited report average price for 9 listings at C$364,347.25.
2. Bridle Park, Ontario: C$10,000 per unit (140,000 per acre)
Targeted exit 3 to 4 years. 95 acres prime property within the GGH in the town of Stayner, 30 minutes to Barrie, 10 minutes to Collingwood, within minutes to Ontario’s No. 1 ski resort Blue Mountain and the world’s longest fresh water beach, Wasaga Beach. This is “cottage country” directly adjacent to residential and commercial developments. Limited units available.
SCAM COMPANIES?
Lately, in Malaysia, 3 land banking companies were raided by the Companies Commission of Malaysia and 1 company raided by Bank Negara Malaysia. Before you invest in any land banking company, do a due diligence, get references from reputable companies abroad and the authorities and ensure that their operations in Malaysia do not violate the laws of Malaysia, in particular that of Companies Act 1965 and Exchange Control Act (ECA) 1953.
For TSI International, we do not accept deposits in Malaysia and investment funds have to be transferred through a local bank to our bank abroad.
OUR REFERENCES
Ask us for reports and references from:
- The Mayor of Milton, Ontario
- Shiner Binavince Barristers & Solicitors, Vaughan, Ontario
- RAE Appraisals & Consultants Ltd., Oakville, Ontario
- The Bank of Nova Scotia, Mississauga, Ontario
- Greater Toronto Marketing Alliance, Toronto, Ontario
- Prapavessis Jasek Chartered Accountants, Burlington, Ontario
Also, always go on the internet to check for fraud. For Canadian and American companies, you can check with the Better Business Bureau for a reliability report. TSI International is rated “A” by the Bureau. Go to http://www.bbb.org/Canada/
Also. go on the internet and check prices of properties in the place you are going to invest in by searching for current listings of real estate agents in that area to compare prices.
Also. check with people you know in the place you are investing .. your friends or your friends’ friends.
Come join our investors on a due diligence tour of Toronto and Niagara in June 2009 and see for yourselves, and step on your land!!
THE STATE OF WORLD ECONOMIES
FUTURE OF MALAYSIAN ECONOMY?
This chart sourced from “Current Economic Crisis : What Malaysia needs to get back on track” by Tan Sri Dr. Sulaiman Mahbob, Director General, Economic Planning Unit, Prime Minister’s Department, Malaysia, dated 20 February, 2009.
It was prepared one month earlier when it showed Malaysia needed only to allocate RM7Bn or 1% of GDP to bailout its economy. One month later, Malaysia allocated another RM60Bn or 9% of the GDP to rescue the economy. This is the highest of all the countries mentioned above despite the government consistently claiming that Malaysia is not badly affected by the world crisis. Worst is, according to Tengku Razaleigh Hamzah, only RM15Bn of the total will benefit the common man and only RM10Bn will be spent in 2009 with the balance RM5Bn to be spent in 2010.
In 1973, a 1.3 litre Japanese car costs RM7,000, in 2009 RM60,000 (8.5 times);
Double-storey house in Penang RM45,000 compared to today RM370,000 (8.1 times)
Engineer’s starting pay RM1,000 compared to RM2,000 today (2 times).
Casual worker at McDonalds in Malaysia RM3.00 x 8 hours = 24.00 x 25 days = RM600 a month.
Casual worker at Gloria Jeans in Australia about RM44.00 x 8 = 352 x 25 = RM8,800 a month.
House price in Perth, Australia about the same as in Kuala Lumpur, car price 23% cheaper.
Per Capita GNP IN 2005 from “WORLD BANK ECONOMIC INDICATORS 2007″:
- USA US$43,560
- UK US$37,750
- Australia US$33,120
- Canada US$32,590
- Singapore US$26,620
- Malaysia US$4,970
All the reasons to diversify your assets in a STABLE G7 country for wealth preservation and wealth maximisation. Start with a minimum C$10,000 (less than RM30,000). Double your investment every 4 to 6 years and let it compound and see it perform like Warren Buffet’s Berkshire Hathaway Fund - “the compounding factor”.
“Don’t wait to buy land, Buy land and wait,” - Will Rogers
Thank you.
p.s. Join our “due diligence” tour by investors to Toronto and Niagara in June 2009. Call us for details.
“It is a comfortable feeling to know that you stand on your ground. Land is about the only thing that cannot fly away,” - Anthony Trollop.
“The best investment on earth, is earth,” - Louis J. Glickman.
Tags : bank, canada, funds, insurance, interest, investment, land, land_banking, malaysia, market, money, Property News, real_estate, stocks
