House for sale what seminars dont tell you 2
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The Ringgit is depreciating, and people are finding ways to make ends meet and grow their money to match the inflation rate at the same time. In response to the desperation, money making schemes are becoming rampant - especially in the property sector. Lured by the thought of making easy money, many part with hard-earned money or even pay for the seminars with their credit cards via 0% instalment schemes.

But as always, making easy money always sounds too good to be true. So what are are some of these property seminars not telling you?


The ‘learning’ never ends

Once you go for a seminar, it will seem that the learning will never end. First it will be the preview class which you may have to pay a minimal amount of between perhaps between RM50 to RM150 for, which they would have promised you that by the end of the class you will understand how to get ‘rich’.

At the end of that class, you would have been properly hooked and baited when they offer another class that promises to teach you how to get ‘rich’. This seminar will typically be held over the weekend over the course of a few days, which they will charge perhaps between RM2,500 and RM5,000 for. If you don’t have the cash to pay for it upfront, they will have 0% interest instalment schemes for you to pay for your seminar.

Thinking that this will be the final class, many pay the money willingly in excitement of learning the secret to becoming rich. But the learning never ends, remember?

At the end of the few days’ long class, yet another class will typically be offered - perhaps on where to find those fantastic properties and promising you one-on-one classes on how to go through the process.


You’re going to pile up massively on your debts before you can clear it

One of the biggest cause of loan rejections today are bad CCRIS records caused by bad credit card loan repayments and defaulted PTPTN loan repayments, while other major causes include a low Debt Service Ratio (DSR) and insufficient income.

So the first step to being qualified to purchase a property is usually to clean up your CCRIS records, which most of the ‘gurus’ will tell you to borrow money from friends and relatives to pay off. And for those who have insufficient income, you may even be advised to persuade a friend or family member to ‘hire’ you into their company so that you can get a pay-slip and EPF and SOCSO records.

In order to do this, you will need more money as you will have to provide your friend or family member enough money to cover your employee’s EPF and SOCSO contribution as well as the employer’s EPF and SOCSO contribution.

And if you have been paying for the classes on credit, this will be on top of all your credit card debts.

Other methods of purchasing a property with bad CCRIS records include joint venturing with your friends or parents to leverage off their clean CCRIS records or their quota of buying a residential property with 90% loan.


Loan compression is technically not illegal - neither is it legal

Exactly as laid out above, loan compression is technically neither illegal nor legal. For the newbies, loan compression is when you apply for several property loans at the same time from different banks for one single property and get them all approved at approximately the same time.

In order to do this, you will need a very helpful banker who is willing to help you through this hokey-pokey and a property salesperson who knows what you are doing. Because only then will you be able to play around with the booking forms once you get all the loans approved.

After all, you can apply for 9 loans for one unit - but after you get all your 9 loans approved, you are going to need to mess with your booking forms to show that you are buying 9 units with your 9 loans instead of 1 unit with 9 loans. And yes you will be able to purchase all your 9 units at once.

But here is a little tidbit for you. If you get caught doing this, you are liable to be jailed for at least 6 months. No one has ever been caught in Malaysia before, but there is always a first time isn’t there?


Exit strategy? What exit strategy?

Once you finally get all your debts cleared up, you will finally be able to buy properties (recommended by the gurus of course!) which they will recommend you to do loan compression and buy as many as between 4 to 9 properties at once. As these properties are usually still under construction, they will sell you the future by telling you how you will be able to flip the property upon its completion or rent it out to cover your instalment while still getting a positive cash flow from the rental every month, equalling to extra pocket money.

And when you protest that you may not be able to sell or rent your units out so quickly, they will be quick to point out to you that the ‘rebates’ they give you will allow you to sustain for a while.

But… what about the renovation costs, MOT costs, lawyer fees, and the 6 months that you will not be able to rent out your unit after VP as inspections on the building have to be carried out before it is declared fit for residency?

This is the trap that most people fall into - buying multiple properties without a proper exit strategy. As a result, many people who attend these classes end up even poorer while making their gurus infinitely richer.


Conclusion

Property investment is a serious business which requires as much dedication as a full time job, it also demands much study and understanding of the property market. In spite of the many insincere ‘gurus’ out there who are just looking for a quick buck by preying on the people’s gullibility, there are actually still a number of good gurus out there who are honest and helpful in their teachings.

If you are able to find a good guru to teach you the trade and, coupled with a lot of hard work from your end, there’s no saying why you can’t become the next Robert Kiyosaki of Malaysia.


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@domng he managed to start his journey but no sure how much he earned :)

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I think the article above stated on the  " while other major causes include a low Debt Service Ratio (DSR) and insufficient income" is correct...

The explanation as following:

Say a person salary at 5k/month:

high DSR = says 0.75

5k x 0.75 = 3750

Low DSR = says 0.6

5k x 0.6 = 3000

it makes sense on the lower DSR will cause the higher chance of the rejection of loan 


hope above helps


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@pepusch84 agreed with your point of view

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@6011_3531_5354 

Haha. I am only a small scale investor. Many in this forum are property investment experts! LoL