Smart Planning In Amassing Properties

 

Nazz Zain, best known within industry circles as Abe Nazz, is an avid investor of under-construction properties. Abe is the Kelantanese slang used to denote abang or brother while daimyo is the Japanese term for “king of small domains”.

Working as a salaried employee at a Norwegian oil and gas service provider firm, Nazz, who is a Business Development Manager dedicates his time actively in the pursuit of property investments. He  currently leads a team of 250 affluent Bumiputra investors calling themselves Jaegers, under a cooperative company named Jaegers Corp.

Headquartered in Shah Alam, Nazz said that their daimyo empire comprises  of seven daimyos of which each leader is in charge of a specific territory. Nazz himself is the daimyo of Eco Park.

He started his first investment in 2002. Sharing his story, he says he was greatly aspired after reading a book entitled “Millionaires from a Different Planet” written by renowned local financial coach Azizi Ali.

“I consider myself analytical and use mathematical methods to determine the types of investment I make. The involvement and commitment coming from other investors who are serious in  this type of investment strategy has also added to our success,” says Nazz.

His favourite strategy is to learn the “mathematics” of properties currently under-construction through joint venture techniques.

START-UP INITIATIVES

The first property he purchased was in Cyberjaya which he bought with zero down payment. His journey into property investment has since intensified over time.

The initial success sparked his curiosity to explore and learn more about the various aspects of multiple purchases, banking facilities, vacant possessions, costings and smart financing. For primary market products, under-construction properties are bought directly from developers before being launched to the public.

Inspired by his siblings who want to know more about investment strategies as well as to raise awareness among rookie investors, Nazz authored a book on investment into under-construction properties. Kitabul Daimyo (The Book of Daimyo) is the title of the book which he wrote that can be purchased online.

Nazz’s love for properties was challenged when he was hit with a RM400,000 debt and his credit score at credit reporting agencies including Credit Tip-Off Service (CTOS) was tainted, as he was the guarantor for his family’s business. That prevented him from applying for any bank loans from 2011 until early 2017. With his father encouraging him to stay hopeful, he teamed up with his siblings to settle the debt during this period by pooling their monthly income together to invest in properties.

“It took time to fill our ‘war chest’, the term I use for cash reserves. I needed to act fast. The entry cost for under-construction properties was low,”  he says.

“We had time to increase our ‘war chest’ while the buildings were being constructed. Luckily, the salary of my joint venture partners also improved over the time, so we did the magic within the time frame,” added Nazz.

Nazz told Property Insight that the colloboration with his siblings resulted in the formation of Bani Zain Group (BZG).

Between them, they planned to buy properties every six months or whenever the “war chest” filled up.

So far, BZG has bought properties worth over RM3.8 million, with each family member contributing RM600 monthly. Mathematically, if this amount is divided among six people, each person has forked out an equivalent of RM633,000 so far.

Over the past 15 years, Nazz has proudly acquired 13 under-construction properties and sold off two that have recorded healthy capital appreciation over time.

NETWORKING SUCCESS STORIES

Nazz believes in networking. He now has a network of over 250 Jaegers all over Malaysia. He regularly gets speedy updates on new launches of upcoming projects online. The Daimyos would help to filter and analyse each project as the under-construction projects are more dicey  as compared to secondary market properties.

He recalls his first property purchase in Cyberjaya which caters the students’ market which brought in consistent monthky rental yield. However, he later disovered that the capital appreciation was merely 2% per annum. In contrast, his terrace house in Setia Alam, which gave him negative cash flow (as the rental is lower than the monthly instalment), appreciated consistently at 10% per annum.

The awry lesson Nazz learnt was that properties meant for students could perform fairly well for the first five years but subsequently lose out in terms of values due to vandalism or maintenance upkeep issues. That is exactly the opposite for properties meant for families.

“I believe in treating property investment as a business deal. Let’s say there are two properties- a student unit and a terrace house. If, after deducting the monthly instalment, the student unit gives me a positive cash flow of RM200 a month, that will be RM2,400 per year or RM24,000 in 10 years. On the other hand, the rental generated by the terrace house is RM500 lower than the monthly instalment, I will lose RM6,000 every year or RM60,000 in 10 years.”

“However, if after 10 years, the price of the student unit increases by RM150,000 while the price of the terrace house increases by RM600,000, logically  speaking, which one is a better deal? It’s a profit of RM174,000 versus RM540,000!” affirms Nazz.

For funding purposes, Nazz prefers to obtain working capital by refinancing his existing properties. He has also established three joint venture groups for investment purposes. The BZG partnership which he established with his siblings has seen them successfully acquiring Shah Alam properties such as Vista Alam and Studio Fourteen besides Avenham Garden at Eco Grandeur in Puncak Alam.

They have also invested in Kuala Lumpur properties including Irama Wangsa and Lexa Residence.

He also collaborated with another group comprising his office colleagues. Together, they bought units in Transit-Oriented Developments (TOD) including D’sara Sentral by Mah Sing Properties.

Meanwhile, his third group is called Jaegers Corp, through which he and selected like-minded investors purchased units including Eliptica Terrace at Setia Alam and MET 1 at KL Metropolis by Naza TTDI. The remaining properties belong to Nazz and his wife. Nazz generates ideas through online networking with his followers and 250 Jaegers.

His investment strategies is based on three sets of skills. Firstly, the ability to map out a five-year cash flow forecast, and to calculate the investment potential of the property. Secondly, the ability to act quickly is key, which is facilitated by a strong networking support group, which Nazz considers as being worth more than gold. Lastly, the capability to generate huge yields through the investment of small capital, by utilising any of the effective investment strategies above.

OVERCOMING CHALLENGES

Even though Nazz is always full of fresh ideas, he also faced some challenges which have taught him valuable lessons over time. He cautions the investing public about purchasing a unit in under-construction high-rise, high density projects that are entering the final phase.The sheer number of units coming into the market will probably drag down the value and the expected rental, especially during a volatile market.

“I have learnt the importance of checking the balance between the purchase price and number of units per acre.  The aim is to purchase the first phase of the under-construction units rather than subsequent phases,” advised Nazz.

He also urged those seeking to kickstart a property investment journey to invest on buying books that can educate one on property investment. He has read books written by Azizi Ali and ”Property Queen” Renesial Leong which have expanded his property investment knowledge. He also believes that investors can upgrade and motivate themselves constantly by following the opinions of experts on social media.

Nazz’s dream is to retire young and rich by the year 2022! In his opinion, the property market has hit rock bottom in the first half of this year, as witnessed in the steep plunge in property prices. While others have lost hope in property investment, he anticipates the market will recover by the second half of 2017.

“The property market usually lags behind the stock market, and I honestly believe that 2019 will be a good year to sell,” says Nazz.

“So the final question to ponder would be, ‘Have we amassed a sufficient number of properties to sell when the bullish market returns in the future?”