Story of my fourth property (part II)

The tenant was very busy and he could only open the door for a while on Saturday late afternoon. But the owner had to sell urgently and definitely had to do so over the weekend. So too bad if any interested party couldn’t make it.

All the while I was worried that the response would be too overwhelming – an inevitable result of his prominent ad in the paper. This timeslot restriction in flat viewing could probably work to limit the number of potential buyers.

That afternoon we saw people showing up for the flat viewing. They were all middle-age couples or businessmen with the typical look of local property investors.

And there we were, two young girls who looked so out of place there. In fact, the property agent admitted later that two of us looked more like property agents coming for co-broke.

Really? Or is it just your lack of imagination that limits the pool of your prospects? If girls can go shopping and partying together, why can’t they go property hunting too?

When the crowd was ready to go upstairs, the tenant suddenly called to inform the agent that he couldn’t make it at the last minute. He could only be back much later.

The agent told everyone to go back first and wait for his call. And one by one, we saw the cars driven away.

I suddenly came up with an idea that could probably bag us the deal.

We asked the agent to have a seat inside the clubhouse so that we could talk more about the unit. I made use of the opportunity to convince him that we were experienced property buyers with everything in place, including loan approval, legal support, etc. We could speed up the transaction and ensure no hiccup along the way.

In fact, we were more like cornering him. We kept bombarding him and he didn’t have the chance to pick up calls from other buyers. Except the one he received from the tenant, saying that he had just returned to his apartment.

It ended up we were the only party managed to view the unit that afternoon. We submitted an offer on the spot, while reassuring the agent that we would cooperate in whatever way to close the deal.

I followed up with the agent again the next day. The owner needed money urgently. He counter-offered with $515,000, plus an additional $10,000 paid in cash to help him cover his transaction cost. I didn’t even bargain because I knew that I could easily make a profit at least a dozen times of $10,000 when I sold the place.

My friend took up an 80% loan from a local bank, with legal subsidy and 0% interest for the first year.

For the next five years, the property was tenanted to Japanese tenants on company leases, fetching between $3,000 to $4,500 a month – a gross return of 7 to 10%. The unit might have seen good and bad times, but it was always in demand because of its location and the fact that it was a two-bedder.

Two years after the purchase, my friend was relocated back to her hometown. When she couldn’t make it in town, I would handle the tenancy matters on behalf of her.

By the end of 2009, she asked me whether we should sell the property and lock in the profit.

Frankly, the risk is always higher when an investment is not in your country. You can’t control when the market direction will change in the future. Nothing is worse than having your fund stuck in a depreciating foreign asset, especially when you are in need of money. Besides, the last thing I want to see is her belief in me and my idea turns out to be an investment loss.

Yes, we had made our money and it’s time we moved on.

We sold it for $935,000, a 82% profit. I hope she found this ‘okay’.

One thing I forgot to tell her: I want her to keep 100% of the profit because I think I have gained more on the intangible side – the precious opportunity to practice the strategies of buying and selling, the countless things I learned in this venture, and above all, a strong friendship between us that will last a lifetime!