Friday, May 27, 2011

Academician turned property millionaire

Any other examples?

Despite his unassuming and jokester demeanour, Dr Peter Yee, 53, is someone who stays strongly focused on his goals. He has compiled a long list of academic qualifications through the years and has also paid many "tuition fees" (errors in property investment) since he started investing in his late 30s.

His never-give-up attitude has led him towards the much-desired path of financial freedom. To him, there is no such thing as failure, just learning. He has started businesses and failed. But he never saw those experiences as a failure despite what some might have branded him. He continued acquiring non-academic knowledge and finally found his riches via property investment.

Today, he lives in his dream house with a panoramic view of Kuala Lumpur's city centre. The dream home closely resembles a sketch of a house on a hill that he drew in year 2000 and stuck onto the door of his wardrobe.

His tenacity might remind people of Yoda's (Jedi Master from the Star Wars universe created by George Lucas) worldwide-known gems of advice - Do or do not. There is no try. visited Dr Peter Yee at his office in Selayang, played the 'Success' board game he created and chatted about his interesting journey towards financial freedom.

Tell us about your journey towards financial freedom.
I spent too much time studying. That was my mistake.

I went to five different universities, including the ones in Japan and the USA. I bought my first bungalow in my late 30s. Before that, it was just "break-even" every day. Basic education is important. But if I were to get a degree and immediately focus on making money, the results would've been different.

A lot of my new friends and neighbours are not highly educated, but they make a lot of money because they focus their time on making money. That's why my third book's topic has changed. It will be about making money.

You should never give up in life, regardless of your age. There's no such thing as failure. I have started businesses and closed them down. People might say that I am a failure, but I don't think so. Instead, I change. This is because some businesses were not be suitable for me.

You were a teacher and remisier before. Did those experiences have a major impact on your life?
In year 2002, I was a school teacher and was posted to Kuala Terengganu. I was bonded for seven years as I took the Government's scholarship.

I wanted to leave to do business but I couldn't because I did not have the RM100,000 to return to the Government.

At that time, I had a house in Kuala Lumpur. It was sometimes rented out, and sometimes my family and I stayed for a while. An important learning is to invest in properties near you, maybe within 30 minutes, especially for residential properties. It is easier for tenant management and property maintenance.

My second scholarship was to Japan to study computer algorithm. It was a four-year contract. I served two years and paid back half the sum, RM15,000 (S$6,421). I came back (Kuala Lumpur) to do management training for a college. It wasn't easy because I was sent outstation all over Malaysia. One week in Penang, one week in Kuantan and so on. I did not like that kind of life. So I resigned and started my own training company that is similar like now, but smaller. Universities don't teach living skills, how to make money or how to live a better life.

I needed sales. Everyday my staff asks, "Boss, what to do." [laughs]. Nine months after starting the business, I became very depressed because there were no sales. So I shut down the business and became a remisier. I sold off the only house I have and paid a deposit of RM50,000, after negotiating with the company.

From all these, I learnt that in order to move forward, one needs to change to go on a different career path and also learn to sacrifice.

As a remisier, the income was good. In one month, one could make between RM30,000 to RM50,000, and sometimes more. In a year, there are maybe one or two good months. The other months, "sleeping" time. When it was busy, I talked until my cheek hurt. When it was quiet, there's maybe one call per day. When the market was busy, I had four phones. That's too busy!

After five years, I decided that the job was not suitable and I attending a course called 'Money and You'. Actually, I attended many self-development courses to find out what was wrong with me. I found out that there was nothing wrong with me. There's something wrong with my formal education! So I had to complement my formal education with not-so-formal education.

In that seminar (Money and You), they said, "Do you like what you do?" If you don't like, then you are like a prostitute. You only like the money, but you don't like the job." Then I thought, "Eh! I feel like a prostitute." [laughs]. So I resigned and managed to pull out some capital from the deposit . That is the beginning of my property investment career.

At that time, my wife was also looking for a location for a business. And that's why I came to Selayang. We found a place with a 3+2 agreement, meaning 3 years of fixed rent, while 2 years float. After three years, there was some money coming in. So, I approached the landlord and he increased my rental from RM1,200 to RM2,200. When I asked him to reduce the rent, he shouted at me, "If you don't like, many other people want to rent!"

It was very hard for me to accept that the world is so merciless. It won't work to pay him endlessly. So we did something for ourselves. So we really thank that man, Mr Chan. Because of him, we have many shops now. Otherwise, we would still be renting.

What's the board game about? Why did you create it?
I created the board game about 10 years ago. At that time, I like to play board game. You know, Robert Kiyosaki's cash flow game? I enjoyed that game very much but I feel that his game missed something out. His game focuses mainly on financial intelligence. In life, finance is one of the important parts. But what about the other parts? Personal, health, relationship with family. So in my board game, we have financial intelligence but we added other aspects. Emotion, relationship, career, society, health and knowledge. It's about how you balance these six aspects. For example, if you spend more time to make money from your job, then you will spend less time with your family.

So how do you balance?

But then, when you talk about balance, if you don't have passive income, how are you going to balance? So, that's why I wrote this book (You Can Become Rich In Property). If you have passive income, then it frees you. This means more free time to balance other things.

The second book (The Certain Way To Life's Riches) is about laws of attraction, about how to make things happen. People usually only look at the results. They don't look at the steps. So I give them the steps.

How long did it take for you to build your dream home?
During a meeting with my friends, everyone set their goal. We wrote it down and presented to one another. This is my picture [shows a sketch that's included in his book]. I wanted a house on a hill. That's the beginning.

I bought three bungalows on separate occasions, but they were not suitable. Later on, I sold one condo to buy a piece of land and I sold one shop to build the house. And this is the view I see [showing another picture in his book]. Compared to the sketch, it's quite similar, but the duration took about six years.

So I believe that anybody can create their own things as long as they really want it and really focus on it. The result is that my dream house is actually free.

How long have you stayed in your dream home?
About five years. It is just five minutes from this shop. So, if there's anything that you want, write it down. And then list the steps on how to make it happen. I put my sketch in front of my bed and looked at my drawing in the morning, during transient periods and before I sleep. It has to do with mindset. Whatever I did , it was all to realise my dream house.

What kind of challenges did you face in that six years, while achieving your goal?
There were challenges! For example, there was one house was attracted to me. Initially, the owner wanted to sell it for RM400,000, but I did not have the money. But I still wanted the house. I was renting then. I said to myself, "I want!. But no money, how to buy?". Six months later, the seller asked, "You want the house or not?". I answered I want! So the seller said, "Why? What happened? Is it the price?". I told the seller that it was the price and she said, "OK. I'll come to your house. We talk."

After negotiating, the seller agreed to RM365,000. So I bought the house. I just had enough for the 10% down payment. I was a remisier then. I wanted to speed up the process. So I speculated in the market and I lost half of the money! I was supposed to sign the S&P (Sales & Purchase Agreement) within two weeks. It took a few months for me! [laughs].

The seller waited for you?

What are the other examples of laws of attraction that worked in your favour?
There was one from the auction market. I went all the way to Shah Alam to bid for it and I got it. Initially, the seller asked for RM330,000. But I did not have enough money, so I ignored it. Then the seller called me back and reduced to RM300,000 three months later. Six months later, the seller called me again and reduced further to RM264,000.

It's things like that. It attracts, as long as your mind persists on having something, whatever it may be.

What is your property portfolio like?
Mixed. Some from auction and some from sub-sale (existing buildings).

From your property investments, what are some of the key learning?
It is better to stay on landed property as the rental is not as good. So you rent to yourself.

After I resigned as a remisier, I went to a property exhibition. Within a day, I bought two properties with cash (from my remisier deposit). My learning is to never buy property like that. You must do some research.

There's another one where the sales person told me that the property will be completed with CF (Certificate of Fitness) within a week. It took one year and the price went down.

It was RM143,000 during launch and the current market value is about RM130,000.

Do you still have that property?
Yes. It is still rented out. Another lesson is to never take free advice [laughs]. I had a friend who stayed in an apartment who told me that the area has an investment future. So I bought two units. I bought it at RM80,000 in year 2000 and another unit at RM85,000. The market value now is about RM75,000. But in life, you should never give up also [laughs]. Even if you made a wrong decision already, you can still make it right. So I averaged it by buying three more units at RM53,000, RM47,000 and RM56,000. The average investment is less than RM75,000. So, never give up on life. Think positive.

Do you still have these five units?
Yes, still keeping all.

There is one unit that I bought from a company. It took six months to negotiate. There were three directors. Two will agree, then the other disagrees. Two will sign the cheque, and the other one is overseas. My learning? Buying property needs patience, especially when you want to get below market price. I also learnt to not buy properties that are too far away. When a property is near you, it is easy for you to go and see. Now, it is easier still because I live on a hill. So I just need to see if the rented units have lights on at night [laughs].

I also bought a land with 20 other people. I am a minor shareholder. The market value at that time is RM20 million. Now the price has gone up. RM20 million has become RM40 million. My learning is that capital gain is mostly from the land. Building gives you the cash flow. Building is a deteriorated cost. It needs repair.

What happened to the land?
A developer is planning to build a 5-storey strata title shops. That is the best deal. The land appreciates, then you build your own and make money all the way.

What's your passive income?
Sometimes more, sometimes less. I am also not sure of the exact figure. But it is more than enough to cover my expenses. I am financially free, because my properties' passive income is enough to support my expenditure. My personal expenditure is very low.

What types of courses or seminars do you conduct?
We have a few property courses conducted at this centre. I even give a one-year free coaching. This is because of the mission I set, hence I do not mind as long as they purchase properties. My seminars are available for a few hundred Ringgit only. It is cheaper, but they have to come here (Selayang). After my class, when the participants are not sure if they should purchase a property or not, they can make an appointment with me. I will give my opinion so that they will make less mistakes.

I will also give relevant CDs, advise on recommended readings and all details necessary for them to get started. There are three courses. One is How to Make Money from Residential Property with Little/ No-Money-Down. This one is suitable for those who are new to property investment, for those with no property yet and little savings. They will learn about money management, what is financial freedom, what is No-Money-Down, how to manage tenant and eventually buy their own home.

Second one is How to Make Money from Commercial Property?. This course is for those with some savings between RM100,000 and RM200,000. It is not advisable for beginners to attend. If they attend, they will learn the best techniques, but when they go back, they will get stressed out because they cannot go forward. From each commercial property deal, one can make RM50,000 to RM100,000. But one would need some capital.

I make the learning easy and I share a checklist which I use as well.

What if there is only one participant? Do you still conduct the workshop?
No. At least 10 people.

What's the third workshop?
It is How to Make Money from Auction Property?. You can make a lot of money from auction properties, if you know how to. But there is a lot of risk as well. If you are interested in commercial auction, then it is better for you to attend the commercial class first.

What's your next goal?
You really want to know? [laughs]. We want to create a balanced life city called Inova city. A city where people work and play. I have 30 years to do it. So I will continue working until then. It is based on the concept of a balanced life. For example, a mother who works close to her child's day care centre.

Any advice for people who wants to start investing, apart from coming to your workshops?
Read up, especially those from local authors, and subsequently read those from the international scene. And then, attend all the suitable seminars.

Do you have any specific go-to strategies?
It depends. For No-Money-Down, use as little of your own money and look for properties below market price. Stretch the loan, rent out the place and make sure that rental is more than the instalment. After that, go for your second one. Make sure that the instalments do not eat into your salary. After second one, go for your third one. Maybe purchase one property every three to six months.

What is the best and worst advice you have received?
The worst advice I received was free advice. [laughs]

Unless it is from someone who knows better!
Yes. Correct. The best advice I received was also free advice from a professional. We knew each other from the property field. He gave me one good advice, which is to buy property in a rich man's area, not in a poor man's area. I took that advice and made a lot of money.

But not everyone can afford those areas.
[laughs] So, begin with a poor man's area for cash flow. Whether the market is up or down, you can still get tenants. When people buy bungalows, it is like buying dreams. Like my dream home, I didn't care how much. I just wanted it. Many rich people got richer dreams, so they are willing to pay the price.


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