Category: rEstateSG

TJJ’s fair amount of RMB asset

Posted on by tiger40490

To keep things simple, we will assume the shares of TB, LSQ and TJJ is 20:40:40. TJJ’s RMB amount is therefore 40% of Rmb7800k = Rmb 3120k. This 3120k has always stayed in LSQ’s account, but belongs to TJJ. There is no question about this amount. The question is

Qn1: How much personal cash assets TJJ has, in his own bank accounts?  We are focused on how much he should have, as a legitimate, fair share of the couple’s shared assets.

As of mid 2024, right before the 7800k sale, TJJ used one bank only i.e. ICBC (PSBC account was dormant and empty).

  • 380k in ICBC TimeDeposits
  •  80k in ICBC savings
  • no USD in ICBC
  • ——
  • total Rmb 460k

It’s simple yet not unfair to assume that Rmb 460k is the estimated final amount of TJJ’s personal cash asset on his final days. There have been inflows and outflows but these flows largely cancel out each other. Some inflows and outflows are passing through his account and should not affect Qn1.

  • inflow: one-off 100k from 文学所. Supposed to be given to LSQ for DJDJ fees, which add up to about 400k/Y. (100k is an under-payment to LSQ.)
  • inflow: monthly salary, but this used to be given to LSQ since LSQ is paying all family expenses.  (Perhaps an overpayment to LSQ.)
  • inflow: LSQ transferred a few five-figure amounts to TJJ
  • outflow: TB transferred a few amounts including amounts to buy USD. All part of TB’s 20% in transit.

Anwser to Qn1 is 3120k + 460k = Rmb 3580k. I propose to use 3600k as a simpler estimate.

make every dollar work hard4u@@ #SBH

Posted on by tiger40490

See also priorities in stock trading

It is Perfectionist and unrealistic to make every dollar work hard for us. Many experienced investors (few are wise investors and even fewer are real “experts”) stay invested, having very small amount of idle/unproductive/unemployed cash, like 12x monthly expenses. See https://tanbinvest.dreamhosters.com/24728/12x-monthly-expenses/

For decades, I have lots of USD or SGD sitting in bank accounts earning below 0.5% pa. asset%allocation: imprecise snapshot=best shows my cash allocation at around 15%, much higher than equities. Used to be 50%. I have long accepted low return in exchange for “excess liquidity“.

I didn’t complain. I usually complain only when I lose capital or lose liquidity (as defined in liquidity[def]: how I gauge illiquid products) .

* memorable eg: I remember the professional analysis of AllianzIncomeProtector. The annualized return turned out to be very poor. (I think cpfLife may also show a low annualized return, despite the high DYOC.) I probably don’t mind that low return. However, I do mind the horrible liquidity[1].

* memorable eg: Buffett’s IBM “mistake” shows an embarrassing but positive return on this IBM investment. Not spectacular but no disaster either.

I think these are some of the key reasons I don’t see myself as an “aggressive investor”. So not every dollar (sometimes not even half the dollars) in my possession is working hard. When my cash “productivity rate” did hit 90% (i.e. 90% of my spare cash deployed into /productive/ assets), I sometimes had my fingers burned:

  • In 2021 I deployed all my spare cash to FSM bond funds. About 80k is currently stuck.
  • I had a 150k position in the supposedly safe Allianz HY fund. Stuck for years. I lost liquidity and lost capital, but in terms of e2etr [end-to-end total return], probably up to 1 to 5% loss only.
  • I only invested about 40k with Jill, in contrast to 6-figure commitment of other investors. We lost capital.

— If I carry a 250k mtg at 2.5 ppa, but have 250k idle cash, then I would feel the pressure to make the idle cash more productive.

— Jolt: SBH in HDB.. why I can easily save 100k but won’t spend 100k on a new HDB? I wanted the 100k to be more productive, working harder to generate returns.

After Susan’s discussion, I feel 100k invested in a SlightlyBetterHome is different from “excess liquidity” mentioned above. This 100k will be non-productive for decades 🙁 In fact, part of it is cost (reno/fees), rather than investments. The rmSelf tends to neglect the xpSelf.

  • Investments are the focus of the evaluative rmSelf;
  • Those costs were incurred to provide experienced wellbeing of the xpSelf.

C38U [CapLand CICT] #Poems fees

Posted on by tiger40490

— div
https://secure.fundsupermart.com/fsm/stocks/factsheet/SGX.C38U/CapLand-IntCom-T “Dividends” tab has detailed div amount, date.. Eye-opener.

— Fees
https://secure.fundsupermart.com/fsm/stocks/factsheet/SGX.C38U/CapLand-IntCom-T has a calculator showing, for $2.22 x 1000 shares i.e. 10 lots,

  • + FSM flat fee = SGD 8.80 + GST= $9.42
  • + SGX 4 bps = SGD 0.888 + GST = $0.95
  • + SGX flat 35c = SGD 0.35 + GST = $0.37

POEMS? Here’s my estimate

  • + brokerage 8 bps = SGD 1.76 + GST= $1.9
  • + SGX 4 bps = SGD 0.888 + GST = $0.95
  • + SGX flat 35c = SGD 0.35 + GST = $0.37

Verdict on brokerage commission: POEMS beats FSM only for buy/sell up to SGD 11k

Actual: $215.01 shown on SRS consisting of

  • $214 for 1 lot
  • + SGX flat 35c charged twice + GST = $0.75
  • + 0.12% = $0.26

Y Sg home buyers max out mtg quantum: greedy #LIR floor

Posted on by tiger40490

See also

Delphia of OC is a mortgage specialist. She shared her personal observation that majority of Singapore borrowers (probably including non-PRs) would max out their borrowing capacity i.e. loan quantum.

One of the most important limits is TDSR. (For HDB units, another important limit is MSR.) No more than 55% (was 60) of income (including CPF) is allowed to be used for instalment. 55% of total income spent on debt servicing?!  Sounds like dangerous (cashflow) low ground.

I asked her why the “majority” has such a motivation. Delphia said many want to maximize their investment i.e. grabbing the biggest property they can afford. OnePearlBank might be one example.

— interest rate sensitivity

Delphia herself felt buying at the current price level doesn’t sound like smart “investment“. However, such a strategy was considered a leveraged investment at a very low borrowing cost, though interest can skyrocket.

These “investors” believe that if they wait long enough, their leveraged investment would appreciate — sure-win.

When a lender calculates monthly instalment, a key input is the interest rate. A max-out borrower would want a rock-bottom rate like 0.1 ppa to minimize the projected instalment, but MAS uses 4 ppa known as the medium-term interest rate floor.

Wallace Xu said something similar about American home buyers… they are highly sensitive to rate hike.

— my preference for (net) current income and against windfall

I never like to bet against rate hike. I always maintain a war chest to wipe out my loans whenever LIR breaks my threshold. My own “exposure limit” is lower than MSR limit.

When you focus on current income, you will naturally become more careful with LIR cost.

MAPIC #character

Posted on by tiger40490

 

The best investment home is not necessarily the home you want to live in.

Don’t fall in love with the property; fall in love with the numbers.

cooling measure is a man-made event. Can be introduced and withdrawn any time.

Be the first investor in a new, perhaps undeveloped location, but the timeline could be too long even in SG. Look at what happened in my Brazil project! Better diversify geographically.

— full-time businessman vs part-time investor.
A property is different from eq/mufu/gold because you can customize and improve the asset (43R) but risky. It is a full-time businessman’s perspective. I’m really a small part-time investor.

Both P.L and Avery spend time walking the ground, but I think it’s not very efficient unless you know how to strike up conversations with locals (and trust them), as I did in Bayonne.

P.L said he likes bad-looking properties because the seller didn’t bother to improve or over-sell it. Not for a part-time investor.

Some areas are closer to city but old and rundown. You bet the gov will redevelop the area … relevant in SG only ! As to out-of-radar areas, it is feasible only in place of your expertise (but Robert Kiyosaki probably says he can become an expert in many cities. He is a full-time businessman.) With overseas rEstate, we have to focus on prime locations, to reduce the wide range of risks.

43R is a better model than most of the P.L stories. More realistic, more incremental. It requires active mgmt, almost full-time.

— overseas country risks.. Over the long-run, the relatively safe countries are 1) SG itself 2)UK/Au/US. I have blogged about this for years.

legal .. The Commonwealth (aka British) system is not as “tenant-friendly” as U.S. system or Continental systems, out of 3 main widely adopted legal systems.

In contrast, political (including national economic) risk … is mostly nothing but a category of risks, for the sake of argument. Hard to assess in my opinion, esp. over a long horizon.

— SG^SP500 resilience.. It appears that sg rEstate market is comparable to U.S. stocks — short drawdown, quick rebound, but I doubt it.

Even though P.L will “sell” us overseas properties, he probably believes in the SG prop market for the next 50Y. I feel he is /truthful/genuine/ in his Day 1 closing remarks. SG market is supported mostly by PAP government. The geopraphical location is good, but there are many good geographical locations in the world!

I think SP500 is supported more broadly, by waves of new powerhouse stocks. U.S. economy is more dynamic than other developed economies.

Quantum/diversification and DYOC are much better with U.S. stocks.

You can experiment easily and frequently, and learn fast.

— character, integrity .. am 51% convinced by the evidence presented.

  • company awards
  • P.L asks his staff to /regurgitate/ the 4 questions like “legal/ethical/reputation/right or wrong”.
  • P.L has a passion to teach and share his knowledge.

The training tries to create confidence in the “students” that P.L is trust-worthy, knowledgeable, wise, skillful, so we should trust and invest with GEX. GEX probably make a very good commission and takes no financial risk.

I was told (the lady who worked with P.L for 10Y) that MAPIC program is more for retail investors, and not attractive (or even relevant) to wealthy investors. For big investors, training content would be too boring. The deals could be nothing fancy as they already have many good deals lining up for their attention.

— To email patrickliew77@gmail.com

  • give your name, phone number, Mapic B71
  • background info and question
  • don’t refer to earlier emails. For follow-up, just compose a brand new email and inclue earlier content as standadlone piece.

Facebook “Dr Patrick Liew”

750k+20k^765k: which easier2sell@@

Posted on by tiger40490

Suppose Ann bought a well-maintained house for $765k. Suppose Ben bought a fixer-upper for $750k and then spent 30k on kitchen, bathrooms,,, until it looks like Ann’s, slightly newer in the renovated parts, but slightly older in the untouched parts.

Now they are both selling, at the same location. Q: which position do you prefer?
%%A: Ben. As Ben I can easily separate the renovation cost from the investment, so (Assumption 1:) my investment amount was 750k. I can more easily accept a 755k offer. I can even accept a $750k offer.

I would explain to myself that my $30k renovation is for myself, not suitable for every buyer, and probably not appreciated by the next owner, who might decide to redo everything. In other words, renovation cost is not an investment having a chance of appreciation. Instead, renovation cost is an expenditure.

To Ann, the entire 765k is investment, so she expects some appreciation or at least break-even. In a down market, she may be forced to sell at 755k, a bitter pill to swallow.

The paradox — Ann bought an equivalent asset cheaper than Ben, but has more problem selling.

  • At 755k, she feels more disappointment about a small loss than Ben feels, based on Assumption 1.
  • .. It’s harder for Ann to explain away the loss as Ben “I made a $5k profit, while the 30k renovation is an add-on improvement I did for myself, not for the next buyer.”
  • At 770k, she feels less accomplishment about a modest appreciation than Ben feels.
  • Ann may set a higher, more challenging target price than Ben, based on Assumption 1.

— a minor reason to favor “Ben” .. the 30k renovation is customized for Ben. In Ann’s case and in my own experience buying a resale home, the renovation, the decor, the layout… are all customized for the previous owner 🙁 Some buyers don’t mind that.

HDB rental demand: decline over50Y #Zeng+Felicia

Posted on by tiger40490

— Felicia cautioned me .. HDB rental demand from foreigners could fluctuate in the long run. In the U.S. rental market, half the tenants are local Americans. Singapore rental market is more dependent on foreigners (high home ownership rate), so she sees more risk in my HDB rental model.

Why hold on so tight even after relocation to U.S.?
* low maintenance
* valuation volatility managed by PAP

When I explained to her why I won’t sell my HDB even while I’m settled in the U.S., I realized my deep bias and sky-high confidence in the PAP and SG economy. Over the long term, my confidence would be put to the test. Compared to China, U.S. and SEAsia, I still feel far more confident about SG HDB property. This is a heavy bias, not based on enough data. Once I live through and understand U.S. rental property risks, I might conclude that SG rental market is low maintenance but low yield and not-so-stable.

— Sheng.Zeng’s views:

  • The entire SG economy has traditionally relied on foreign workers. If you worry about HDB rental demand till 2064 (age 90), then you have bigger things to worry about, including SGD strength, CPI inflation, medical inflation, cpfLife… all of which are more impactful than HDB rental yield.
  • Q1: Why must you keep the HDB flat? Legacy? I now feel leasehold is not the best form.
  • Q2: What do you need the rental income for, exactly? If for a modest retirement [CRBR $3k] you don’t need this income, then no real worries about “decline”! If the decline represents a sub-optimal return, then there are many sub-optimal returns in my career.
  • Now I think 50/50 chance I would treasure this “extra” disposable income. In that case we can consider various ways to cash out. Lease buy-back or downgrade to a smaller home
  • Jolt: So taking a step back, the preoccupation with HDB rental yield is perhaps a self-imposed, /hallucinatory/ dependency. My retirement doesn’t depend on it .. Zeng’s wisdom.

BGC^SG condo #briefly

Posted on by tiger40490

I would rather hold the BGC condo than buy-n-hold a SG condo. Holding BGC condo provides 1) higher rental yield 2) more upside. Sg condo’s advantage is stability in a world Tier 1 property market, better currency risk.

Rental yield is the biggest factor, esp. given the high quantum and high commitment.

I feel BGC condo has rental demand among locals in addition to expats. SG condo mostly target expats.