Buy Low Sell High Is Merely A Pleasant By-product of Execution Excellence

buy low sell high is a pleasant by product
Buy low sell high – a pleasant by-product

“Buy low sell high” is and will never be the goal or guiding principle of successful property investors. Although conventional wisdom tells us to ‘buy low, sell high’ to gain a profit, by having this four words stuck in your head will not only cause you to not get a profit but will put you in the red zone very quickly for a very long time.

Start Off the Right Footing – Goal Setting

If you have not already realized, ‘buy low sell high’ is not the goal. Your goal should be something like – “to retire early at the age of 50 with sufficient passive income and savings to enjoy quality time with your grandchildren and serving the community.”

Use this well known template to set your SMART goals:

SMART-goals.png
Source: j6design

Current State Analysis – Financial Planning & Strategies

Understand where you stand now. How’s your financial health? How’s the maturity of your current property portfolio?

Find out how much cash and leverage you command by reviewing the excess cash after accounting for your usually monthly expenses. After gathering these information, you will be able to narrow down to which asset classes and strategies suitable for you.

Closing the Gap – Timing & Actions

After sorting out all the big picture items (goals, finances planning), we are now moving on to when to take action. This is the hardest step out for many people who could talk and plan until the cows come home but afraid to take the leap of faith and work towards their goal.

“By taking small risk, you open up opportunities. By not taking any risk, you are essentially risking it all”

After taking the first step out and here comes the real challenge. If you are selling it yourself, try not to get emotional about selling high in today’s market. Read the life of a diy seller and understand that selling lower is better than not selling at all. Unless you have the luxury of time and available cash to buy another property now, you will not have the time to wait for the market to pick up again. Furthermore, with the recent release of government land sales and the sentiment the state is portraying, the return of sky rocketing price may not even come.

Execution Excellence

Some of you must be already wondering when am i going to write about buying low and selling high? You are almost there, the truth is – it is merely a pleasant by-product that successful investors enjoy seeing.

It is merely a pleasant by-product that they enjoy.

If you have done the above the right way, from goal setting to closing the gap, profits will come naturally. By focusing on doing it right from the start and constantly keeping your end goal always at the back of your mind, profits from buying low / selling high is merely a pleasant by product.

Buy Low Sell High 101 for Real Estate Newbies

buy low sell high 101 short

Quick crash course for those new to real estate industry or with little experience on buying and selling transaction. Here are 6 really simple ways to buy low or sell high.

buy low sell high 101 full
Buy low sell high 101
  1. Location
    Sell away your property in a prime area at a high price and buy another property in a less pricey area at a low price.
  2. Time
    Due to economic fundamental, natural inflation and debt funding, prices of all items will generally go up in the long run. If you can wait long enough, you will be able to sell at a  higher price than the price you bought.
  3. Distressed Sale
    Since the peak of property market, over leveraged investors are now stretching their cash flow too much and many are now resorted to selling hastily at a low price before the bank does a foreclosure on the property. If you do come across any relatives or friends selling their property at a low price, this is possibly your only chance to buy low.
  4. Add Value
    Furnished or renovated properties generally gets a better price than those without. But do not over-renovate as some high end designs may not appeal to everyone and it could end up as the reason to bring down your property value rather than adding to it.
  5. High Supply
    Simple economic principle states that when there are excess supply with the same level of demand, the price drops. When the market slows down, the supply will start to rise, and this is your chance to buy low.
  6. High Demand
    On the other hand, when supply stays the same and demand increases, the price increases. This situation happened from 2010 to 2013 where the property prices are racing up day by day which was the best chance to sell high.

Generally, the above mentioned methods are really simple methods to start off for newbies to the real estate market. Do continue to find better way to buy low and sell high ! If you have another simple method to share, please let me know! 🙂

Be the first to move out. Just MOP!

Be the first to move out. Just MOP!
Be the First to Move Out. Just MOP

If you fit the following descriptions, congratulation! You are ready to move to the next phase of your real estate adventure.

  1. Staying in Queenstown / Bishan / Bukit Merah / Toa Payoh / Kallang / Whampoa
  2. Just fulfilled Minimum Occupation Period (MOP)
  3. You have not taken up big debt in the last 5 years such as car loan
  4. You have not spend all your hard-earned bonuses

Here’s the good news, you will have a cash proceed of at least $50,000 if you sell your flat now.

est profit from just mop flats.png
Source: The Edge Property

Together with your funds in Central Provident Fund (CPF), you will be able to upgrade and reorganize your real estate portfolio for your next 5 year plan. You must be thinking now why can’t I wait a while longer? Here are 2 reasons:

  1. Being the ‘just MOP’ flat owner, you have the command of price as your estate is having limited supply at this moment. As the typical duration for HDB to publish a caveat is about 3 months after submission of any transaction, any time within this period, not many people will have the information on the actual sale price. After the first transaction price is published in HDB website, more of your neighbors would come to a realization that the estimated sale price is actually an understatement and decided join the selling spree, however it is a little too late; the supply is no longer scarce.
  2. No one really knows when will the property market recover and march to a new high again. Rather than speculating, let’s just take it that several ministers have repeatedly mentioned that it is still too early to lift the cooling measures. When there is a target set for the property market index, it has to be achieved, one way or another.

So, what are you still waiting for?

Quickly give a call to your trusted agents for a comprehensive reorganization plan. Otherwise, you may contact me at 8781-5516 or schedule a free consultation with me.

Last but not least, if you still decide to wait out, you may sign up this free property tracker by SRX on my account. It will provide you the latest updates if your neighbors have sold his/her flat.