Wednesday, October 9, 2013

How to spot overseas property scams?

How to spot overseas property scams?

Yahoo carried an item guest contributed by Mr Getty Goh, "the co-founder of CoAssets, a spinoff company from Ascendant Assets Pte Ltd, and Singapore and South East Asia’s first real estate bulk purchase and crowd funding site". 

Read it at:

Recently, a mainstream newspaper wrote about how some dodgy foreign property investment schemes were recently sold in Singapore. Being a co-founder of CoAssets, Singapore and South East Asia’s first real estate bulk purchase and crowdsourcing portal, I have come across my fair share of dodgy investments. Hence, I thought it would be useful for me to share some of the tools I use to help me discern whether a deal is genuine or a scam.
Looking through the news article, the deal was eerily similar to something that I came across just a few weeks ago. Some of the similarities are (1) the project is located south of Batam and (2) more than 1,300 units were sold for $70 million.
The business model of CoAssets has been likened to that of SouFun, a Chinese listed company that provides targeted ad solutions for property developers by aggregating demand (i.e. bulk purchase). Hence, we were approached to get aggregate bulk buyers for this Indonesian project. After careful consideration, we turned the collaboration down and we found two key red flags that made us cautious.
Red Flag #1: The numbers did not add up
One of the main things that made my team wary was that the projected numbers did not add up. In another news article, it was reported that the developer was planning to sell 900 units at US$90,000 (about S$117,000). There were different units and the smallest unit was about 60 square meters (about 646 square feet). Of the 900 units, 200 were already sold at a special pre-launch price of about US$30,000 (about S$39,000), which meant that a deep discount of about 66% had been given to the group of early buyers.
Developers are after all in the business of making money through the selling of properties; hence the question we wanted to answer was whether a discount of 66% was reasonable.
When it comes to development, one key component is construction cost. To find out how much it costs to build a residential property in Indonesia, construction cost estimates for 2013Q3 from Rider Levett Bucknall (RLB), an internationally renowned quantity-surveying firm, were used.
Based on the report, the estimated construction cost for Jakarta was between RP6,161,000 per sq m (about S$62.36psf) and RP9,839,000 (about S$99.62psf). Due to the lack of more precise data for the Batam region, construction cost for Jakarta was used as an indication. Based on the estimated cost, purely for construction, it would cost between S$40,000 and S$64,000 to build the smallest 60 square meter villa. Hence, at the special price of US$30,000, the developer may not be breaking even.
Compounding to the risk, the number of people who received the special 66% discount was also unclear. The project could still be viable if the developer gave the special 66% discount to just a handful of close business associates. However, if it gave it to all 200 buyers, the total amount collected would unlikely be enough to cover the construction cost for the 200 units.
Red Flag #2: The developer did not seem to have the financial strength
Developments are generally hefty financial undertakings and many developers do it with some form of construction loans from banks. While developers may not reveal the true financial situation to the retail property buyers, they will have to show their financial reports to banks in order to secure construction loans. Hence, developers that can secure bank financing at the construction stage tend to be in a good financial position and are more secure. Conversely, developers who do not have some form of bank financing during the construction stage are not viewed to be as attractive.
The 900 units in the Batam development falls under the latter category. That is not to say that all projects that do not have bank financing during the construction stage are doomed to fail. However, for this specific case, the amount needed to build all 900 hundred units is at least S$36 million (assuming all 900 units are 60 square meter units that cost S$40,000 each to construct). When we did an ACRA check on the Singapore company, we found that the company had only a paid up capital of S$300,000 and the key appointment holders of the company stayed in public flats.
What is your financial recourse?

Sunday, July 21, 2013

Top 5 paying occupations in Singapore within each occupational group

What are the top 5 paying occupations in Singapore within each occupational group?
Want to find out what are the high-paying jobs in Singapore or how your wages or salaries compare to others?

Below is based on the latest available report by the Ministry of Manpower released in June 2012.

Top five occupations in terms of median monthly gross wages within each occupational group:

Saturday, July 13, 2013

Achieving success - Making a difference

As part of my job, I meet and interview what most would consider successful people - Regional and Global CEOs.

With time, I begin to ask them questions outside of work and one of the questions I typically ask is, what advice would they give to someone who wants to achieve the success that they have.

As these chats happen socially, I will not be naming them to respect their privacy, but at the same time, I think there are lessons we can all learn from. 

A global CEO of a reinsurance company said:

Saturday, May 25, 2013

The Magic of Money

“Money is so elusive,” a friend once said. “It keeps disappearing.”

Don’t we all have the same feeling on occasions?
Well, I have two words for it and the first word begins with an “F”.

Financial Budgeting.

It can help us to manage our money and prevent the disappearing acts.
Of course, it is highly recommended that we should always pay ourselves first, that is to set aside money for savings whenever we get our pay checks. However, for those who feel that it is impossible, or don’t know where to start, financial budgeting can help.

Some find doing financial budgeting a painful process. A friend described it as doing the same boring homework every day.

Here are some points you may want to keep in mind to get started if you do not have a trusted financial adviser to guide you.

Thursday, May 9, 2013

NUS, NTU and SMU - Which is better? part 2

** For the latest stats: NUS vs NTU vs SMU – Which university’s business degree fresh graduate earns more? ( posted on Jan 2015) **

Here is another entry on National University of Singapore (NUS), Nanyang Technological University (NTU) and Singapore Management University (SMU).

The graduate employment survey 2012 results are out.

So if your "better" means how much do the graduates from NUS, NTU and SMU earn, and how are the employment prospects for their graduates, you may be interested in the below information from the Ministry of Education, Singapore.

NUS Business School

Degree: Bachelor of Business Administration
Overall employment rate: 88.5%
Full-time permanent employment rate: 84.2%
Gross monthly salary (Mean): $3,238

Degree: Bachelor of Business Administration (Hons)
Overall employment rate: 92.6%
Full-time permanent employment rate: 88.3%
Gross monthly salary (Mean): $3,976

Degree: Bachelor of Business Administration (Accountancy)
Overall employment rate: 96.6%
Full-time permanent employment rate: 96.6%
Gross monthly salary (Mean): $2,882

Degree: Bachelor of Business Administration (Accountancy) (Hons)
Overall employment rate: 96.2%
Full-time permanent employment rate: 96.2%
Gross monthly salary (Mean): $3,423

Friday, April 26, 2013

How much does a degree holder earn compared to a diploma holder?

Online business degrees, private universities, full time local universities, the choices seem endless to pursue further education and earn a degree.

But a more fundamental question could be is it worth it all to get a degree, especially with horror stories of non accredited universities, degrees that are not recognized, and worst of all, a school closing down when money and effort has been put in. 

And what about successful people you always read in the papers, magazines etc. who flunked examinations and were kicked out of schools?

So the question begets, how much does a degree holder earn compared to a diploma holder over a lifetime?

Monday, March 25, 2013

More than 50,000 page views

With an interest in writing and money matters, I started this blog to share my thoughts and observations.

Time flies and now this blog has garnered more than 50,000 page views. 

I hope you have found the content useful.

Here are the Top 5 most viewed pages of all time:

Top 20 companies to work for in Singapore

Friday, January 18, 2013

Case closed - WPG Group, T3B

My past few entries have been about my encounter with T3B.

I was finally contacted shortly after my last entry and had a meeting with Keane Lee and his staff.

They explained why there was a delay and have settled the matter. 

This is neither a condemnation nor endorsement. 

I consider this the end of my experiment and the matter closed.

As usual, before parting with your money. 
Keep both eyes open, ask lots of questions, and keep documentary proof.