Updated: Apr 22, 2020
You may have heard of many courses out there offering people how to invest into properties with zero cash down and own multiple properties with minimum cash outlay and all.
Recently, many of my friends and colleagues have come across social media advertisement promising the above and are worried that they are being "left out" of such essential knowledge.
Indeed, theoretically, you can learn about all these things. But in reality, majority of these "good deals" were packed in the industrial property sector and it has been immensely difficult to find good deals in the residential sector.
However, considering the present market, it is appropriate to visit this topic about how you too can discover fire sale residential properties with integrated profits.
I will share with you all these details over a progression of posts that I've arranged.
So How Exactly Do You Find And Invest In Fire-Sale Properties And Profit Right Away?
Well, the short answer if you're time starved is,
1. Find a serious/ urgent seller. (Regardless through a private settlement deal or an auction sale)
2. Purchase the property at a much lower price than its valuation.
Easier said than done?
In reality, it is not easy to find a property (Especially before COVID-19 or during great going years) whose owner would consent to sell at a substantial loss.
Especially with such great demand from Singaporeans and foreigners alike, a slight discount over the valuation is usually enough to get the property off the shelf.
However, we do realise that even in good times, there are genuine fire sale bargains around. There will always be people who are going through hard times or have other squeezing motivations to give up their resale properties urgently.
Out of the numerous I have seen - Some were retrenched, some were migrating, some undergoing a divorce and some affected by business misfortunes or lost gravely in the stock market.
Some on the other hand, urgently sell to exploit more noteworthy yields and upside in the stock market (Like at this point!)
OK Jacq, straight to the point... How to find the good deals?
First of all, let me qualify that this is no walk in the park.
Discovering gems is tough work. So in case you're not set to do the work, it's okay, towards the end of this article, subscribe to my mailing list and you will be receiving the occasional REALLY GREAT fire sale deals I discovered. Just simply subscribe to the mailing list and wait.
Here is a 4 Steps Guide To Finding Fire-Sale Properties with Integrated Profits
Stage 1: Select A District, Segment Or Project That You Are Familiar With
In all segments, there are money to be made. But you may not have the necessary experience or knowledge to sieve out good deals from unremarkable one at a glance.
Therefore, to be a savvy fire-sale hunter, you would need to acquaint with properties in a specific district, segment or even down to the exact project that you truly like and know well.
By studying them well and inside out, you will be able to set a "target purchase price" which you know is a good fire sale deal.
Personally, my hunt revolves around apartments in Districts 1, 2, 3, 9, 10, 11, 15, 16 and 19. I know the tenancy take up rates and sales volume of these areas very well.
My personal favourite projects that I monitor on micro level are, The Sail @ Marina Bay, The Clift and several in River Valley and Novena.
I liken them as cash cow projects as they offers good and reliable rentals which is also 1 of my important rules when investing.
Not every person plays by the same rule though. I have friends who screen deals only at enbloc potential projects like Laguna Park, Neptune Court, Braddell View, Novena Court and so forth.
These projects usually have lower rental yields as they have aged significantly and do not have the modern and smart facilities that new projects have.
Step 2: Search On Major Property Portals Daily or Weekly
Search on PropertyGuru.com.sg, 99.co and EdgeProp.sg using keywords such as,
Fire Sale, Urgent, Serious Seller, Must Sell, Selling at Loss, Below Valuation and so forth.
In case you don't know how to do it, below are some example screen captures.
*Do take note that their desktop websites and mobile app search functions may be different.
Example: For PropertyGuru, you can filter by keywords under the search box right below
If you are using the mobile app, enter the keywords into the search box as indicated
For 99.co you will be able to enter the keywords in the fields here.
For EdgeProp.sg, it's stunningly better as there are 2 fields that can assist you with narrowing your quest for fire deal properties. One of them is to filter by "% under valuation" while the other is the typical keyword search box like the others.
If you are kiasu like me, you should scout intensively using all the 3 portals.
Step 3: Recognise Whether The Fire-Sale Listings Are GENUINE
Many times, we will find properties listed as fire sale or urgent but yet when compared to the past transaction prices, it is disappointingly untrue. Meh,
Some agents do utilize these keywords to create hype and publicity for their listings but it is not untrue all the time.
Sometimes, owners are actually urgent and desperate to sell but they may not want their agents to advertise at too low price. This is so that they can retain some buffer for negotiations.
Other times, owners could be putting on a strong front, however when offers come in, they become alot more negotiable.
This is where discernment and hard work kicks in
In order to sieve the genuine ones from the chaff, you should arm yourself with a fire shield aka thick skin.
At this point, you should have a "target purchase price" that you are happy to put up a cheque for promptly if the seller obliges.
Inform the agent about your offer with a cheque. at your target price for a specific floor level an/ or facing (Be prepared for some crude comments, mockery or radio silence). Agents usually take you more seriously when you show sincerity with a cheque and there's a higher possibility that your offer will be conveyed to the seller.
This sale should be at least 20% below the market valuation to be significant. Therefore,, it is crucial that you study the recent past transaction prices cautiously to ensure that what you comprehend as market valuation is up to date.
Before you dive into it, it is essential to check with a few bankers to ensure that the property you are interested in is indeed a good deal. (If you need tried and proven advisers like bankers/mortgage brokers or lawyers on your side, drop me a note!)
In the event that your offer is accepted, make sure you view the unit first in case there are blind spots. Vet the tenancy agreement clauses before you hand over the cheque.
*Note: Please do not go around making offers if you have no real intention of honouring your offer. This will have negative impact on you and the agent's credibility. You can be sure that your photograph, name and number will surface in industry's Facebook groups to caution others of your existence very soon.
Tip: Always Compare Apples with Apples
Bigger units typically go for a lower per square foot (PSF) price while smaller units go for a higher psf. So don't be befuddled when a good deal seems to present itself but is actually one that has a patio, a rooftop terrace, high ceiling with void airspace or just bigger than usual.
Time after time, I have seen people buying into what they thought was a good deal and then came to lament when they found they were actually paying for low proficient spaces because of a staircase, not obvious void spaces or squandered patios.
Stage 4: Informing The Area Specialists Of Your Intentions
If after all these and you are unable to find a deal you are satisfied with, then it is time to set up an alert in the property portals. It is not foolproof though as sometimes the system does not capture it accurately to update you.
Simultaneously, contact all the area specialists who furrow the fields of that area/project and inform them your "target" price for a unit. They are the ones with the latest intel and can fill in as your eyes and ears on the ground.
So be pleasant, make some new friends and you could be given priority information when the next fire deal bargain comes in!
If the above sounds like an excessive amount of work for you, subscribe to my mailing list below and you will be notified of occasional REALLY GREAT DEALS which I find!
Of course, if you are a seller of a really great deal property, I can broadcast it to my contacts too. Do drop me a note.
In my subsequent post, I will share with you how to unlock the integrated profits from the fire sale deals that you bought. So that you too can achieve what many property venture courses have been advertising as Zero money down deals.
Yes, that is achievable and there are a few different ways to accomplish this. But this post is too long for now and it's time for me to rest.
About The Author
My passion is to serve my clients in building their wealth through property investments. With prudent planning, creative tax and financing strategies, it is possible to start your investment journey earlier in life and make time work in your favour for maximum wealth growth.
I will be glad to have a chat with you to learn more about your goals and current situation and provide you a step by step road map towards owning multiple properties.
Contact Jacq Ng at 97642556