Marco Robinson: Expert Key Strategies For Leverages
When Datuk Seri Marco Robinson arrived in Malaysia in 1997 and started his stint in the property industry at Tanco Resorts Berhad, he successfully steered through the volatile market by extensively selling resort vacation ownerships.
This was a business related to tourism, leisure and entertainment. By 2000, when the Asian financial crisis brought losses in millions, Robinson left his full-time job and became an entrepreneur.
Significantly, his journey began when he bought his first property in 2008 at age 40. Prior to the purchase, he faced some challenges including capital. But as a serial investor, he has learnt that it can be solved via crowd funding.
“I don’t trust the banks,” he said when asked about his opinion during crisis sublime period of market volatility. His prediction for Malaysian property market will see a positive rise after a two-year cycle.
The strategies were proven successful as he believed in what he was doing. His roller coaster childhood and having been a school dropout at 16, made him view life in a different perspective. It arrived at a time, he was jobless during an economic crisis in 2008 and he wrote Close the Deal & Suddenly Grow Rich, which later became a best seller.
Despite that, he wasn’t happy with the royalties from the best seller either then he asked his financial savvy friends the best way to make millions and many advised him to buy properties and invest in the market.
“One of the bolder move taken as property investor was, I will fly to a few different countries and obtain loans in that foreign banks. I would set up companies in each of those countries such as Singapore, Australia, the United States and Malaysia,” he said.
He would first apply for working permits at the countries after which application for loans from the banks will be done as per their requirements. The loans will be approved eventually when the requirements set by the banks were met to purchase properties.
Borrowing from the banks is one of his working strategies for market investment. He said this is one proven way to gain income and be property owners, too. A person can optimise on leverage by letting the market fall before starting to invest and this will give the extra space on top of the line of credit by the banks.
As an investor and founder of The Wealth Revolution, he conducts talks and boot camps to educate those who are interested on the know-hows and strategies to leverage in the right property investment or simply on the right timing to buy properties.
Robinson also encourages people to invest their capital onto his investment which allows him to buy more properties. Then, he shares the income with the buyers saying “it’s better to have a 25% of something than a 100% of nothing”.
Significantly, this self-made millionaire has successfully purchased a whopping 108 units last year and refurbished the property and sells it back to foreign investors. It has an equity value of 40% equivalent to £10 million (RM51 million).
Asked about strategies for market outlook, Robinson shared three winning strategies he applied this year:
House Multiple Occupants (HMO) or Shared Accommodation;
Special Purpose Vehicle (SPV) or buy via an existing company. He said there are no restrictions in the UK for foreigners for a reduced tax. This will require experts in legal matters
Joint venture (JV)
A leasehold (restriction to transfer) purchased unit can be written on papers from a freehold (full ownership with no restriction). Likewise, he gave an instance of his latest freehold property of 50 apartments, a lease was created for each individual unit at the building.
The lease was for 250 years for any investors or buyers. So, he still owns the freehold and can sell it as separate investment and if you own the freehold then in turn own the leases for the units, too. But this can be achieved with help from a network of sourcing, legal and finance or a mentor who knows how to scale up on the legalities.
Robinson said for HMO, a return of investment of 12% can be guaranteed with a minimum sum of investment of £5,000 (RM26,000) by leveraging on any single property via his company. This sum will then be locked in for the next three years. Potential investors were attracted with some benefits for the SPV strategy like lifetime membership with the one-to-one team coaches and oversea retreats.
A support method called ‘Exchange Delayed Completion’ (EDC) is a practice used for his property in the UK. When a property has been purchased, an exchange of contract will occur. A contract will be exchanged first, the time between the exchange and the completion can be negotiated. The time of completion of the property purchased can be delayed.
In Malaysia, Robinson shared one of his properties he bought for RM430,000 in 2010 at the Berjaya Times Square. It was an excellent buy with RM1,300 rental returns and just sold it this year in September for RM800,000. The property is in demand and frequently occupied by foreigners especially from the Middle East.
“Malaysia has always been a speculated property market,” said Robinson. He added if a property is bought now, it will likely drop in value compared to Singapore having a more volatile curve due to its open concept to foreign investment. He also added Malaysians would use up all of their retirement fund in three years, therefore not to rely on that but start with other investments.
For new property buyers, he advised that a market study is vital especially for information pertaining to job growth in the vicinity, demographics movements, structural plan like the accessibilities or amenities and able to decode cyclic process.
As for foreign investors, the city of Manchester was recently voted as the best city in the UK. It has shown 75% technology growth, easy to access business grants like free office spaces which increased the sustainability’s of the property purchased there with high accessibility.
He stressed that UK has the lowest base lending rate of 0.25% due to the correction of Brexit, therefore increasing higher demand for first time home buyers. UK has opted to exit from the European Union (EU) in June this year, and in turn has predicted a sharp drop in the house pricing.
If a property is being bought in Manchester, it will reap a cash flow return of 29%. He said the local currency ringgit has strengthened to a weaker pound now.
Robinson added that leveraging on foreign exchange of other foreign countries with lesser market challenges are a way to earn back return on investment (ROI).
“Economists said pound will appreciate due to sentiments by foreign trade deals from China and Australia”. China has transformed Manchester as a hub by building a £130 million (RM666 million) China Cluster, incorporating with the Airport city Manchester to lure in the far east firms.
Joint venture mentioned by Robinson has an effect on property purchases. A collective fund or crowd funding method will prove to be stronger when a group of people will invest in a property and will receive the share from the returns. Short term or bridging loans basically for a year are introduced for the property buyers in the UK
Robinson said Malaysia has yet to have enough affordable homes. Therefore, advised new buyers to do a reality check or research on a property before purchasing it, especially on the cycles like job growth in the area, population growth, the infrastructure and commercial values.
Currently his onward investment is Initial Public Offering (IPO) on The Rich-List. “The Rich-List is funding and creating award-winning entrepreneurs,” said Robinson.
The recipients will gain access to the capital to start their own business and building brands. The entrepreneurs will be trained and mentored individually, and they will receive customer royalty platform for instance on travel, cosmetics or restaurants.
Robinson also mentioned about ‘block chain’, a technology that will be used to open finance and prevent fraud, in this case called ‘the Naked Dollars’.
On a lighter side, Robinson balances his time for family and travelling. He said he travels extensively for trainings but he has a team of responsible leaders who take care of his events and business. He loves to spent time with family besides meeting new people and sharing his testimonies for success as a millionaire and entrepreneur.
His advice for the upcoming entrepreneurs is not to rush into the market but go for smaller achievements first. They should have the burning desires to attract investors and the right people and able to nail the idea with clarity. Communications, confidence and self-believe are factors that are able to retract capital and network with successful people.
For the next five years, his mind and energy will be focused to get his legacy IPO The Rich-List to be known worldwide.
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