How to buy property
when it is expensive?

Condos in SG cost
~1 M SGD

Only the wealthy have that kind of money lying around

However, many of us have 100K we could invest

Let's pool our 100Ks

When should we buy?
What to buy?
When to return cash?

Stagnating Rents

Government property cooling

Government population cooling

Vacancies at high levels

Sibor will likely head higher,
Forcing loan rates higher

Buying Opportunity

Since market rental rate won't go up
because of vacancy overhang
and fewer new renters,
the market sale price will likely fall.

The ayes have it, and
the motion to Begin Investing carries.

Buying Properties

Condos should be rentable, so buy only units in the CBD
Other useful guidelines?

Cash Distributions

Create two pools: unlevered and levered

Unlevered

Start distributing cash as soon as the rents stabilize
(we would buy when the economy is not great, so we might need to wait some months)

Levered

Distribute 50% of profits,
with the remaining earnings to pay down the mortgage.

Upside is that it will eventually yield 5 times that of an equal-sized unlevered pool.

Loans

To buy the most property with the lowest carrying cost,
use an interest-only no-prepayment-penalty loan with max LTV

Use refinancing when loans are cheap
to reduce the number of property liens.

Thanks!
Now let's go get some property!