Neck pain

Haven't been feeling too good lately..... after sleeping on my kid's stuff toy, my neck which was unsupported became rather painful.
After that I went for a Kenko massage, and cutting my hair in Malaysia, I also had a short massage. This time, the pain got worse.....
I also continued to carry my baby kid, and the camel back broke when I carried my kid quite a far distance from the carpark to a restaurant in Alawad/Arab Street.

I went to my clinic downstairs ( on a saturday morning) and the Dr. prescribed some medicine. During the medication, the pain was numbed.... when the medicine effect wore off, the pain came back.

(This was 4 days later Thursday evening) I then visited Eu Yan Sang clinic for a Chinese therapy hoping it will help... this made matters worse.... I underwent acupunture around the lower back and head...and under some electric stimulating under some warm lamp...this did not help....the Physician then tried to turn my head a few times....this really made my head worse.....
Nevermind....She gave me some medicine to take...(in powder form)....since I tried it ( and it cost S$90+ including the acupunture)..... lets see the whether there is any help

4-5 days later by Monday, the pain was quite bad... (from a sitting/lying position to a standing/siting position, there is acute pain at the right neck all the way to my head)... I went to my corporate clinic for a referral. The doctor seems quite sceptical (maybe it is the same with all corporate doctors)... and gave me some medicine..... as what happened previously once the medicine was taken, the pain was numbed...once the medicine wore off, the pain came back.....that was around Thursday.
I wanted to see the doctor again on Friday, but the stupid policy means no doctor in the afternoon......

I went back the following Monday, and the refer me to the orthopedic for referral... and they gave me a date 1 week later on Tuesday.
This time, I think I will visit the private doctor which my Mother-in-law is visiting this Saturday...
Suffering for 4 weeks is no joke....I just want to get well soon...have been missing a lot of fun with my boy lately, and my poor wife has to take care of him and carry the heavy stuff....

My lesson now is once you have a slight neck pain,
- never go for a massage
- never carry heavy things more than 2 kg... no laptop...no carrying of kid
- never walk more than 100 metres if possible
(today I was actually feeling better in the morning, but the afternoon there was a stupid all hands meeting which I had to walk all the way to 168, and sit in a very uncomfortable position for 1 and a half hours repeating what has already been known)

US property - Update from US colleague

A friend of mine who is a LT delegate to US is in town for some training.

I had a short discussion with her and this are the takeaways
Property related
- She is staying near San Jose
- US home property has been dropping - very obvious
- US rent market is creeping up - from US $ 1100 to 1240 for a 1 bedroom - abit surprise, accd to her, because ppl cannot afford housing or foreclosed will rent instead
- People tend to move nearer the city now due to oil prices
- US property still quite ex. eg US 400 K for a 2 bedroom
- I am referring to property in/near San Jose. For central the property are dirt cheap.... US 400 K can buy a bungalow
- Banks are restricting funds and more prudent, eg. for Jumbo loans (above 500K) interest rates are higher

Polictics related
- Obama if elected will have more trade restrictions
- according to my colleague, they are likely to have stricter rules with regards to FTA. For eg. they will only look at FTA if the other party have the same policies (like free labour laws etc)

My take
Looks like the turmoil will take at least another year to drop as houses are still expensive~ maybe drop at least 10% and due to inventories . Recovery will be fast as supported by higher rents. But definetly, will have to look at economical activities to pick up. Mood in US is still rather sombre with little jobs ard.

Banks see plunge in home prices in next two years

ST 21 May, 2008

Banks see plunge in home prices in next two years

New homes, rising vacancy rates, unsold condos and fewer rental deals cited as reasons

By Fiona Chan, Property Reporter

THE slowdown in the Singapore housing market has prompted two banks to predict a dramatic plunge in home values in the next two years. In two starkly bearish reports, Barclays Capital and Credit Suisse have forecast drops of up to 40 per cent in home rents and prices, as demand and supply dynamics move in favour of buyers.

The reports, issued in the last two weeks, pointed to the malign cocktail of a flood of new homes coming on the market, climbing vacancy rates, a rising number of unsold condominiums and fewer rental transactions. They also raised concerns about the possible dumping of units by speculators. Barclays said that should this happen, private home prices could slide 28 per cent to 30 per cent by 2010.

Credit Suisse predicted a possible 40 per cent drop in rents and prices. Its analysis showed that sub-sale prices recently started to dip at several developments. Both banks also noted that developers were now more generous with price cuts, stamp duty rebates and agent commissions in an effort to move units.

They warned that smaller developers were likely to 'break' first. 'Just six months ago, City Developments and a few others gave zero commissions to agents,' Credit Suisse said. By March, most were giving 1 per cent to 5 per cent, an increase of three to 10 times in just six months. 'When Singaporean developers start to reach out to agents with higher commissions, you know they are feeling the pain,' it said. The pain is coming from slower growth in home rents and prices, as the effects of the United States sub-prime mortgage crisis takes its toll on market sentiment in Singapore.

Private home prices rose a smaller-than-forecast 3.7 per cent in the first quarter. Even then, Barclays analysts said this could have been boosted by a handful of high-priced transactions and 'may not reflect the depth of pessimism in the market'. Sales and launches of new homes also fell sharply last month, extending the slump.

Mr Colin Tan, the head of research and consultancy at Chesterton International, agreed with the Barclays report about a correction in prices. As more new homes are completed over the next few years, he said, rents will feel the pressure and prices will start to fall.

Not all property analysts, however, have such a gloomy take on the housing sector. Kim Eng analyst Wilson Liew believes the oversupply situation may be overstated. While there are 32,000 units being built and 42,000 more in the pipeline, current market sentiment could help slow the rate at which the planned units come onstream. 'It is likely that most of these units would be deferred indefinitely until sentiment returns or when construction resources ease,' he said. Developers could also keep lands in their landbank rather than develop them if there is no demand, suggested Macquarie Securities' head of Asean research, Mr Soong Tuck Yin.

Both he and Mr Liew believe the upcoming integrated resorts will give Singapore a boost and, while there may be a temporary weakness, home prices are unlikely to collapse. Mr Soong also said developers had stronger balance sheets now than in previous market troughs, and the current low interest rates and high inflation could lead people to buy properties as a hedge against inflation.

The Credit Suisse report, however, said negative real interest rates - often touted as a driver for property purchases - had not historically helped home sales. It also said that even with construction delays, actual completions had usually come in higher than forecast.

Steven Molnar Real Estate Mastery Course

Steven Molnar Real Estate Mastery Course

Two days ago, I was at Singapore Expo for Steven Molnar’s Real Estate Mastery Course. The event was scheduled to run from 9am to 9am. Real estate investing is something that I’m inexperienced in, so I had hoped to learn something useful from the course.

The morning part of the course was a bit slow starting. We were taught by Steven about wealth and he also scratched the surface on some financial planning.

Then he gave an overview of different investment options, using “7 commandments” to highlight why property investment is a good option. It wasn’t quite what I came for and at times, I was close to dozing off.

Steven next shared a ten year plan whereby we could make an income of $180k from property every year. The plan works like this:

- Buy a 300k property with a 100% interest only loan.
- Pay the interest with your rental income.
- In 10 years, the price of the property would have doubled.
- Refinance at 80% to extract $480k from property.
- Pay off the loan of $300k and you would be left with $180k in cash.

If you can repeat this every year for 10 years, you would have cash coming in every year.
The refinancing option allows one to extract cash from the property without having to sell it. This would be good for avoiding the payment of capital tax gains. In Singapore where there is no capital gain tax, we could possibly just sell the property and pocket the entire $300k instead of refinancing it.

In my view, the success of this plan would depend on a few factors:

- Rentals must be able to cover your interest. Periods of vacancy might be risky if you cannot service the loans.
- The property must double in price. This might or might not happen. If you buy at a high point, you might be stuck with very little capital appreciate even after 10 years.
- Banks must be able to lend you as many as ten loans.
- Getting a 100% loan.

The 10-year plan would probably be too risky for most investors, but trying to do it for one or two properties might be viable.
How is it possible to buy property with no money down? We can’t obtain a 100% loan in Singapore but Steven suggests a few methods:

- Making use of credit lines for the other 10% that needs to be funded by cash.
- Making use of vendor finance. This is something that is new to me.
- Borrow or go into joint ventures.

A few other tips I picked up from Steven include:
- Always do your own independent valuation.
- Amateur investors look at price.
Useful list of real estate websites (mostly for Australia):
www.realestate.com.au
www.residex.com.au
www.domain.com.au
www.hia.com.au
www.abs.gov.au
www.reia.com.au
The last part of the seminar was on some of the risks of real estate investing.
- Vacancy
- Property damage and bad tenants
- Loss of income
- Rising interest rates
- Market collapse
Steven also promoted his 5-day Advanced Real Estate Mastery Course and an upcoming property development project to us. Are they good?
If you recall my earlier post on Steven Molnar, there seemed to be a couple of websites with negative feedback on Steven. Most of it was directed to his association with Henry Kaye.
However, if you look carefully at the posts in this forum, most of the negative posts were made by people who were new users to the forum. It seems that their sole purpose in registering seems only to discredit Steven Molnar. I can’t confirm this though.
Other than one other site, I couldn’t really find much feedback on Steven Molnar or his Advanced Real Estate Mastery Course. That site gave a good review for the course but a negative feedback on Empowernet. You might find them interesting:
Review on Free Real Estate Course
Review on 5-day Advanced Real Estate Mastery Course
Empowernet shine wears off
Some news from Empowernet
Undesirable customer service

With regards to the Ecoville project that Steven was promoting, I can’t really comment much on it without more research. If you are considering to invest in it, do check the valuation of the land (among other things) to make sure you are not overpaying for it. Remember what Steven taught us - do your own independent valuation.

Personally, I don’t like the idea of depositing $1k just for the chance to find out more about it.
I would like to end this post with a small bit of advice.
Attending a real estate course does not automatically make you an expert at real estate investing. Nor does it guarantee you wealth. It forms just one part of your preparation. The knowledge you acquire has to be put into practice and continously worked on for your saw to be sharp. This is no shortcut in investing. Great investors always do their homework.
Good luck.

May review part 2 / Living with the Enemy

It is around 2 months since the rebound of the low in march.

Mistake 1
- went in puts too early. Oil has been inching up last 4-5 days. (coincidentally DOW also went up).
I was expecting oil to drop bringing in another rally from DOW. Unfortunately Oil went up again and Dow went down. I went to short it, thus shorting not at a high. Should have waited as Oil is up another day 6 days, chances are oil will go down, brining another up day.
....emotions running high
Mistake 2
- tikam to sell off celestial at 80.5 cents (75.5 previous day). Another mistake I repeated 2 years ago. Should never have sold off my best investment. PE around 5 and business up 40-50% this year. Worse still, that day I was in meeting whole day and the proxy hang up during that time. before placing an order, check how busy u r the next day.
Mistake 3
- bought back Celestial at a high of 88 cents. emotions again.... but should be okay long run.
Mistake 4
- I should have realise Celestial will be my big winner. I should have switch other stocks to this. too slow to recognise this.

What I did right.
Bought big (all available cash) when I realise Celestial made a superb business performance. At that time nearly 40% cash (10 % FD).
Entered in when fear was greatest. Did not let go of most shares/or started shorting until 2 months.

Strategy Next
- living with the enemy. I have not still an open position on SIM SCI and City Developments. Lets see how this plays out.

May 08 Portfolio

Portfolio at May 08

1. China Milk 0.77 1240000 49%
2. Celestial 0.75 800000 31%
3. SMRT 1.81 32000 3%
4. Pokka 0.49 85000 2.15%
5. Macqurie Infrast 0.875 36883 1.67 %
6. Darco 0.215 55000 0.61 %

7. Short 6 lots of CDL at 11.64
8. Short 7 lots SIM SCI at 391.3
200K FD

Almost 99% vested.

China Milk at PE 7 and a good play on agricultural theme. Going forward it can grow double digits in next few years.
Celestial Q1 4 cents. It was a very good quarter as I was expecting flat earnings due to Soya bean commodity price being sky high last quarter. Its ability to navigate such a tough environment shows pricing strength/power and I expect to grow further.

April 23, 2008, The Straits Times
Deferred payment scheme: Up to 4,200 homes may be dumped No URA figure on units sold but experts say 30% could be offloaded
By Jessica Cheam

THE hugely popular deferred payment scheme (DPS) - scrapped last year - may now be a thing of the past, but what sort of shadow will it cast on the Singapore property market going forward? This has been the question on market watchers' lips since the Urban Redevelopment Authority (URA) revealed last week that as many as 29,250 homes offered under the DPS, including 5,760 unsold units as at the end of last month, will be completed from this year to 2013.

The concern is that speculators who bought homes under the DPS could dump their units at below-market prices, and this could drastically drag down overall sentiment. But just how many units are at risk of being sold, and how big will the impact be?

The URA said while it has the number of units approved under DPS, it does not have data on how many units were actually sold under the scheme. But four property experts The Straits Times spoke to estimated that up to 30 per cent of homes sold under the scheme last year could be held by speculators who may offload homes as the completion date nears. This translates to roughly 4,200 homes, going by a back-of-the-envelope calculation.

That is because out of the 23,490 units approved under the DPS and sold, only about 50 to 60 per cent - or roughly 14,000 - are likely to have been sold under the DPS, say property consultants and agency bosses from Knight Frank, Savills Singapore, HSR Property Group and PropNex. The remaining 40 to 50 per cent were not bought under the DPS. Either developers did not eventually offer it, or buyers chose to pay via progressive payments, because buying a home with DPS usually means a further 2 to 3 per cent added to the price.

Next, property experts estimated that of the 14,000 or so homes sold under the DPS, about 20 to 30 per cent were probably sold to short-term investors or speculators. This means that as a group, speculators could be holding on to as many as 4,200 units.

Why are speculators prone to selling their units as they near completion? The DPS allowed buyers to pay just 10 or 20 per cent of the sale price upon purchase, with the rest due only when the unit received its temporary occupation permit (TOP) on completion.

Speculators would, therefore, typically opt for the DPS and hope to sell their units for a profit before the TOP. Any later and they would have to pay up for their homes by arranging for bank loans or other means of financing.

Industry experts were, however, divided on the impact these 4,200 homes would have on the market. Some maintained that panic selling is not likely, given Singapore's strong economic outlook, which is backed by upcoming mega projects such as the integrated resorts and the 2010 Youth Olympics.

Mr Eric Cheng, HSR's executive director, noted that homes set to be completed this year and next are less likely to be sold indiscriminately, since their owners are probably sitting on healthy gains. But those who bought at the peak of last year's buying frenzy, from April till October, are most likely to be at risk. These homes are likely to be completed after 2010.

Mr Ku Swee Yong, Savills' director of business development and marketing, said the sell-off will likely be staggered, because investors have different levels of holding power. Also, investors have bigger coffers compared to the last property peak in 1996, he added.

But he warned that if too many units in a single large project get dumped at below-market prices, overall market sentiment may be hit. Mr Colin Tan, Chesterton International's head (research and consultancy), thinks that the potential risk created by the DPS is relatively high.

He added that data on homes sold under the DPS should be collected and made public, so investors know 'what they're getting themselves into'. Yhe DPS was scrapped abruptly last October after a decade-long run to remove excessive speculation and ensure financial prudence in the property market.