In a few days’ time, I would start a job paying S$4,000 a month. I was grateful to find employment in the midst of the Asian Financial Crisis.
The next morning I went to POSB to open a savings account. After I deposited all my S$600, I was told that I should go to a foreign bank that I had an account in my hometown in order to send money home every month to my mother and to pay my outstanding college study loan.
Stepping into the overcrowded branch of the foreign bank, I rested on a comfortable sofa, perspiring under the hot weather.
Before long, I was requested by a staff member to sit elsewhere – the area I was seating was reserved for customers with a deposit of S$100,000 and above.
With a total wealth 166.7 times below the minimum requirement, I immediately got up from the sofa.
Taking the plunge
In the afternoon of 16 October 2002, I sneaked out of the office to go for flat viewing. I was so excited: Today I am going to buy the first property in my life!
After four years, my savings finally reached the magic amount of S$100,000. I had been saving diligently 70 to 80 percent of my income every month. It also helped that my salary was now doubled that of the first job.
Instead of opening a special account with the foreign bank, I wanted to use my savings to buy a property. While using my CPF money to pay for the mortgage, the net rental return should be more than enough to cover the rent of the room I was staying in.
I was single and had many years to go before reaching 35. I could only buy a private property.
After months’ of research, I finally decided to go for a one-bedroom unit asking for S$375,000 at Mandarin Gardens along Siglap Road.
It was one of the batches of rental units previously owned by Overseas Union Bank. After the merge with UOB, the latter had to sell them due to a new government regulation that limits the percentage of property ownership by banks.
Making one mistake after the other
Buying properties is like trying a new sports. You can’t be very good doing it the first time.
Unlike these days when buyers can easily find property data, project details, market value, mortgage comparisons, etc. online, back then there were limited ways to find those information.
In a slow property market, the media and the public were equally uninterested to talk about real estate. And asking for advice from people who just got burnt in property investment was like rubbing salt in the wound.
Some property agents were willing to help. But they lived on commissions and it was rare for them to be neutral and tell you all the truth.
With no proper channel to learn how to buy a private property, there were many mistakes I had committed in my very first attempt to buy a home.
I remember the property agent saw me coming for viewing and asked me “where is your client?”. That’s when I noticed other buyers were all middle-age couples or businessmen. I was foolish to admit that I was buying for the first time.
I had done countless silly things on a single day. They included but were not limited to:
1. Didn’t do homework: Fail to find all the past and recent transactions of units with the same size.
2. Buy now or regret: Trust the property agent that this is the last unit with seaview.
3. Buy at market price: Offer at the agent’s suggested price instead of negotiate at a discount as buffer.
4. Bad lawyer: Use the agent’s recommended lawyer means the agent gets his referral fee but you get all the crap.
5. Wrong mortgage: Take up a housing loan with the lowest interest rate but end up paying more.
Sharing my lessons learned
This Sunday I will be running “Buying My First Private Property Workshop” for the sixth time. Every time when it came to “how I bought and sold my first property portfolio”, I wanted so much to skip the portion about this embarrassing first purchase.
But if my painful lesson could help others to avoid making the same mistakes, I could put my self-esteem aside and pluck up my courage to tell a story that I would rather hide it.
Besides, it is important to learn from people who have done it before (with good or bad examples), rather than people who have never been there, or believe that they are always right.
If you are passionate about something, you will keep learning and perfecting your skills. You will get better with time.
Thanks to all the lessons learned in the past 15 years; all the valuable advice from property experts and savvy investors I picked up after setting up Property Club Singapore. I would like to believe that I now know five times more compared with the day I sold my last property and ten times more from the day I bought my first property.
It is satisfying to share my experience with first-time buyers and aspiring investors. The questions they ask are exactly the ones that I used to look everywhere for an answer many years ago. And I wish back then there was a neutral party there to shed some light on all the property questions that I didn’t have an answer.
That is exactly the reason why I cover all the relevant property topics in the workshop:
– How to save faster to buy the first private property
– How do I know I can afford to buy now
– What are the properties suitable for first time buyers
– How to spot the gems in cheap properties
– What are the ways to calculate return of properties
– Where to find a good property agent
– How to negotiate to buy at a bargain
– How to get the best housing loan in the market
– What are the tips to engage a conveyancing lawyer
Some people may say that times are different and the property market has changed. But what they fail to see is that I learned the lessons from buyers who invested in properties in the 1980s and 1990s. And people who bought in those days picked up things from buyers in the previous decade.
History is a mirror to the future. In between all the big and small property cycles, it is critical to learn the successful tips and avoid making the same mistakes.
Check history. Endlessly, you hear in the media, “XYZ happened, and that’s bad.” Or, “ABC would be good!” But is there any evidence that XYZ historically led to bad or ABC to good? It’s usually easy to check, yet few think so. If something hasn’t reliably led to the expected outcome in the past, then folks need to explain why this time will be extraordinarily different. They usually can’t.
– Ken Fisher, Debunkery
You are welcome to join us at the Buying My First Property Workshop. See you on Sunday.