No Substitute For Hard Work

Taking ownership of your hard earn cash

Who would have thought someone could get inspired to delve into the property industry through taekwondo class! Raphael Wong first heard about property investment through his taekwondo instructor. At the age of 17, a chance conversation with his instructor opened his eyes to the notion of investment. His instructor though was not earning much from training taekwondo but was cashing out through property investment. He told a young Raphael on how numerous riches people in the world listed by Forbes are property investors. A story which stuck with him was on how the Walmart business expanded, as the family bought land to setup the malls which then added value to the land and surrounding neighborhood.

With that in mind, Raphael asked his instructor who he calls mentor now on what should be his next step. He was told before venturing into property investment; understand how the entire process of real estate works from all aspects. His next move was to study real estate management, at the young age of 18 he moved from Ipoh to Kuala Lumpur and pursued his studies for two and half years.

TOUGH BEGINNING

At the age of 20, Raphael became a property agent. In a little room with RM250 rental he began his quest to have transaction.  The reality was tough; he went through six months of zero income.  Finally things started to look up as he hit his first transaction on the 7th month and things begin picking up; not rushing into purchasing property yet, Raphael build his income by taking up several other jobs to ensure his income is sustainable. He minimized his living cost and focused on saving up for his seed money. 3 years after working and saving up he was finally ready for his purchase.

Raphael says, “Initially I was financially not ready, with unstable income the risk is higher. During the time I was building my income, I began researching to understand which type of property I want to purchase and where I wanted to purchase.” Needing a lot of affirmation to get the courage to put the money on the table was no easy task as it is a huge commitment, Raphael did it anyways knowing his research was trustworthy and he personally knew that it was the right time.

FIRST PURCHASE

As a rookie investor, Raphael advises, “You have to gain confidence of the property you want to purchase. I was dealing with a lot of properties within Sri Hartamas area therefore I knew the transaction of rent and sales in the area. Knowing the figure would not run too much I decided to make my move.” He added, “Everyone should definitely obtain various bank valuation to determine the actual valuation of the property. Then understanding the foot traffic around the area, either from malls, colleges or offices. The familiarisation of the environment would determine target market and what you want to do with the property. Make friends with the management and know if the place is in demand, there is no substitution to hard work.”

Raphael’s first purchase was below market value by about 10%, as a negotiator I bet we all saw that coming. His analogy “You have to be like a worm, always digging tunnels and familiarizing yourself with the surroundings, eventually all the tunnels will link together and you will get the best route to your destination.”

ADVICE TO ROOKIES

Purchasing from developers could be the easiest way as the entry cost is lower due to low down payment he mentioned. According to Raphael, “I bought secondary market property because it is easier to determine rental because it would not go wrong and you can know tenant profile comparative from buying brand new property from a developer.”

He added, “Even though the commitment is higher but there is lower risk entering sub-sale market as you are purchasing within a matured area which could provide quicker rental returns. He encourages his friends to buy sub-sale property, as that would be a wise start to property investment, as you would not be bleeding during the completion stages.”

ROAD NOT TAKEN

Raphael embarked on this journey alone, standing up to his family to give him time to prove himself that he can make it in the real estate business. Resilience and hard work earned him the seed money for investment. He says “When you earn it the hard way, you take ownership and responsibility of the money. Do not take up bad debts but focus on building positive cash flow.” He jokes do not spend too much time playing Pokemon Go, instead have the right balance in work and play, do not overdo either one.

After his initial purchases four years ago, he was stuck as he could not expand his portfolio, whilst working and managing the tenants he realises that it could get one stuck. This is when he met likeminded people with similar objectives. Having a team together to go viewing, do calculation and solve problems changes the dynamic of property investment. He says, “I managed to get three properties through joint-venture the last year, as a result, it pushed my investment portfolio further, With everyone playing different roles in this purchasing process, it makes the journey fun and more stable.”