Hi, this is Seema, the author of the property apprentice how to earn while you learn, and welcome to Module Two of the property apprentice training course. Today you're going to learn what are the fundamentals of property investing that make us successful that we simply need to know in order to make this work fast. So let's jump right into it. So some of the very important things that you need to know in property investing, of course, like anywhere else, the first point is, you have to know what you're doing. Right, that's why you're here in the first place. But please don't try to eat this lightly.

And just quickly, watch this video only once and think you know everything. You definitely know the basics. basics, all the fundamentals, but you probably can't remember all of them. So good idea might be to watch it again, after some time after you forgotten all you try to implement and some questions will arise what should again, that's why a video is a good tool. Make use of it to know what you're doing. Then specifically in property before before you buy any property, you have to define minimum of two exit strategies or you want to exit property exit strategies.

For example, you can rent it out. Exit doesn't mean you get rid of the property, but it means something What will I do with it? So, you might want to rent it out, or you might want to resell it as different strategies For either one, or you can flip it, which is just keeping it very, very short term only. You could change of yours that means changing commercial into essential property or vice versa. And if only one of these exit strategies works, you should not buy the property. Now if you can rent it out, but you don't think you can resell it, don't buy if you can sell it, but it's not rentable.

Also don't buy it. Why? Because if one surgery doesn't work, you will fall back to the other one. And you still okay. But if only one of them works, you think it works? If it doesn't, then you have a problem.

And I just wanted to clarify Silver's flip. The mechanics of that is the same, right? It's just the duration with which you're holding it for correct? Yes. Okay. And can you give me an example of change of use?

I mean, I think I have a few ideas. I just want to hear from you. What Some of the most powerful, useful change of use kind of exit strategies. When we come to the strategies later, I will go into detail of that. But just to explain the term, it's basically how property's being used to take a car park and build a house on it. Or you take an old bar, change it to a residential property, something that was commercial before you changed to the essential or essential residential property, make it into a hotel, and it's a commercial property.

That's great. Thank you. All right, thanks. Yes. And you're right. I mean, flip basically means you're holding the property only for very short duration.

It could be a day literally. If you find someone who wants to buy it at a higher price that a seller wants to sell it and you buy and you resell immediately and sell it Long term in the future, then I will teach 14 different strategies. Probably a good idea is to use more than one. You don't have to. But diversification is a good tool to reduce risk. This could be across different strategies could be across different markets.

It could be across different locations that you can diversify. So what's the right spreadsheet? There's no right strategy. the right strategy is what is right for you. But I will help you to come up with yours later on when we come to it. As mentioned in Module One, property investing is a team sport.

And so get your virtual team on board. These are not employees. These are people you work together with, like your agent, banker In short, Pro pro etc, we will also come to that this is more or less the high level overview here and we will go into detail of all of these points during this class. Then managing risk a lot of people forget that they buy property and then just leave it. And there is some risk in both, but I can show you how to minimize it, how to manage it, but it's of course not possible to totally eliminate risk, there is no such thing as risk free it if you anybody says a risk free investment, run as fast as you can, because it's a lie. It doesn't exist.

There's always a risk even if you invest the same Singapore in term deposit with DBS bank. Is it safe? Yes, by this risk free know what other risks? Well, there's a risk that you're going to lose money. Due to erosion from inflation, there's risk of bank failure and solvency. Well, although that's low, but there's still a risk there is a risk Exactly.

And the biggest risk is the currency, right? If you keep it in single us and you don't have any other currency, your currency risk, so there's no such thing as no risk. But we can learn how to manage our risk. So we get from whatever risk we are starting at too low risk, that's what we want and we invest good returns but low risk, then, this is probably a concept that is fundamentally different than stock investing. In property investing, we strive to make money and we buy it not when you sell the property. So before you buy, you should know that many bytes you make money or that day, when you buy it its profits, its equity, something called equity and not cash.

The cash Of course you only get when you sell it but we would make to make money when we buy the property. How can we do it? Any idea? Well, I guess I guess you could make money when you buy by buying below market price. Right? So it's the IBM stock trades at hundred $50 you'll have a choice of buying it for $150 or not at all.

They won't sell it at hundred $30 to buy the property there that is of course possible and I will teach this to employees later. How precisely do that so hundred thousand dollar property you can buy it for 70 or 80. 2000 I made 20 or 30 grand already on the day that I've sitting as unrealized profits as equity, as you name it in property boards. And that's how I make money on a day when I bite the cash for the follow and I sell it of course or venerated. will then most important, yes. Sorry, this I mean, that one's gonna be a big mindset shift for me coming from the stock market world, right.

So I guess it's about being clear on exactly how this each property deal will play out. Right. So knowing the exit strategy in advance, knowing how I'm getting in and being able to see or create the profit in advance before going into the deal. Yes, rather than buying and waiting for the right price move in, in the stock market, which is what I'm doing in my other interview. Yeah, absolutely correct. So Yup, I can make money on day one, when I buy I don't have to wait for the market is Furthermore, a risk reduction.

So we fell by 20% below market, let's say, even if the market should fall 20%, that my property is still at market entry. Which is, as I said, big mind shift compared to other forms of investing, where we buy first and then we can only make money if it moves in our favor. In property, this is a little bit different because it's unregulated. I mean, regulations in terms of law, but there's no regulations in terms of price. Price. What's the difference between price and value by the way, the price is what you pay value is what you get.

Right so and I can get a good value for lower price in property and it's one of the beauties in escape. Okay, so that that's you thank you then what is most crucial when we look at property is the numbers I will teach you all these later what I make decisions and teach my students and those of you who are watching this should make a big mental note of the tool. It's all about the numbers and numbers only plus location I've included here location and numbers. It does not matter whether the property looks beautiful at all. It's not affected and so I like I said, you know, it's all about the numbers, numbers matter. You said also location to some extent The location will also drive the numbers, right?

I mean, yes. If it if it's if it's appropriate, if the strategy is appropriate in the right spot then and the rest of the numbers work, then the location will drive the numbers being attractive is that is that fair? To some extent? Yes. But in this I mean, you wouldn't want to buy property in lousy location anyway, because probably the most important location most important factor there, but within the right location, you would want to buy the property that it gives you the best numbers, not the one that looks the most beautiful. What, what I see a lot of investors doing is they go to a showroom and stage and convince them you know, this is look at this design of the kitchen and look at this beautiful so far, blah, blah.

I mean, it's okay if you buy your own home. But for investor agree, I've seen real ugly gray boxes that I mean that look so ugly or different actually property gives me a 12% rental yield. I buy anytime or beautiful new one that only gives me 6%. That's what I'm right. And we will learn how to analyze the numbers specifically in one of the upcoming modules. But decision party has numbers and location not beauty.

Then easy to say, but hard to do. No emotions. So you make decisions based on facts, location and numbers and not on Oh, I hope the market will go up or if Feel this T field is so nice. Or maybe you buy an old one when away then it looks beautiful until you start getting emotionally attached to it. And by right you should sell it because that was the stretches but you don't. I've actually had some students like that who told me that, you know, after a while they emotionally got attached to the property and made wrong decisions, they should have sold it but didn't because of these emotions, so need to control your emotions and it's pure facts that price investors and not all nice property looks great.

And then also doing your due diligence of the calculator. That means by doing your homework before you buy any property, and not only afterwards, I will bear suffering. So these are some very important concepts. And we will go into the details in the upcoming modules. But this is the fundamental thing that drives everything that you have to do for every property is to know what you're doing. If you're not familiar with the area formula is Excel first.

Find you to access spreadsheets, and a team in place. Make sure you make money when you buy, decide the numbers and emotions and to be more if you do that. You're already far ahead of most other investors interests just fine. They don't really take any questions. How do you know when your emotions are getting in the way? I mean, sometimes it's obvious.

I just love this property. I couldn't bear to part with it, that sort of thing. Sometimes it's more Southern like distinction between having a sense for the right action to take versus being emotionally influenced. How do you think about that? Okay, great question. Thank you, which probably also, other people might have.

Let's start with the obvious ones was dissolved are easy to discover eyes when you say Oh, like this property and then you already made a mistake, you know that on a more subtle basis. If you, maybe you have to proactively Think about it, initially, if you think something like oh, should I keep this property or not? I hope the market will go up in a little bit later. Can you influence the market? No. So hope is something you do not want to.

If you analysis based on facts, let's say we will also do that a bit later on future module. What are specific indicators that you can look at in a particular market. And if these indicators maybe a good five years ago when you bought and now they're no good anymore and it's perhaps time to sell and you find that your numbers analysis, it's not a good market or location anymore or should move to a better location. Maybe it's time to sell but you don't want to sell that's the emotion, I do hope hope is also an emotion or laugh all these you may be sometimes you might have to step out of yourself. Stand next to yourself, at least not physically but pretend and look at you as a third person and say what is this person actually doing? Is this person acting rationally or emotionally or get help from your from your spouse?

Write off for me. I mean, not sure about something was asked. I'd make decisions based on facts and not on emotions. Yeah, yeah, I think one of the one of the keys, for me is going to be the language and observing are watching my own language. So any sentence that includes the word hope, like love, in reference to property investments is probably a warning sign. Second, yes.

All right. Thank you. Thank you. Great question. So now, we have to know, why do you want to invest in the first place? Because I think the Why is the most powerful of all questions.

If you don't even know your why. You're not gonna do it. You're not gonna be motivated. You're not sustain and have to ride into nation all the things we discussed and we want to actually do it. So what if you know your why, then you will find a way how to do it. So, I would like to give you maybe one minute to answer that.

First question, what is the main objective? Why do you want to invest in property? Why do you want to generate passive income and just maybe jot it down. And for those of you who are watching, likewise, pause the video. If you take longer than a minute, it's fine to have as much time as you want to have obviously and switch back on once you're ready. And you can also populate a CNA workbook if you have it in front of you, that's fine too.

Okay, are you comfortable in sharing it with me and the audience Adrian or not? Yeah, absolutely. So my my objective for investing generally, is to provide a stable and affluent future for myself and my family, which is independent of the needs of work for someone else and they get The time freedom and the financial means to do what I want when I want where I want with whoever I want. I get a feeling this is not the first time I've formulated this. Okay, brilliant, brilliant. It was extremely specific.

And when you have more depth of family, as well as freedom, what I gather from you and I can maybe share with you as well as the the audience, which we probably can't cover here right now, by the process you already put but most people say I want money. It's not true. You don't want money. What I don't want no you don't want you want the things that the money can buy you and what are these in your case it's family sweaters, ability to do whatever you want to do when you want to do it which is great. To take it a little bit deeper. For those of you also watching this, you can Follow this process and not only in property investing also in other areas of your life is what we call the five why's you ask the question why, like I did just now, let's take your first one you want to enable, to provide for a family or was something you said maybe nice words to me.

But then ask yourself, why why is that important for you? And whatever the answer is, ask again, why is that important from? And what the answer to that is? Why is that important five times in a row. And the first three times might be easy to answer. And something comes to mind immediately.

But after fourth or fifth level, it gets really quite tough and if you stop thinking, and that's an immediate real fundamentally underlying subconscious beliefs and thoughts that you have, personally will come out and that's what really drives To get to know yourself is also an important skill. So, try it maybe later take it five or six levels deep why why why? Why is the family important? Even something that invites that important to you and so on and so on? Yeah. Okay and then why property to achieve that we will look into that why probably is a good way to help you and many others to accomplish that.

So then maybe later once you're done, and for those of you who are watching this, you can pause again, write down your three main objectives and, and divide, as I have shared with you just now can write it in a notebook that you have filled as a space for precisely that. So why should we use poverty Investing as a vehicle as many good reasons. Firstly, it's differentiated from any financial investment including stocks, options, time deposits, and whatever else the bank might sell you in the lower yielding investments. Sorry, I had to keep on time said I was a former banker before so these products are not really good. Anyway, property is real, right? It's not something on paper.

It's real. You can touch it, it's tangible. You can feel it and even if, let's say recently in India, the government declared all 1002 thousand rupee note as worthless. So money suddenly was worthless. But real estate is not because it's real. So it has one of the key factors Then in the long run, it has always been proven to be one of the best forms of investments with high returns.

That's on a value basis as well as passive income. It's also it does fluctuate in price, but obviously much less volatile in stocks, right? The prices move relatively slow in poverty, obviously in stocks by the second. So in terms of volatility, it's much lower. Then, my personal, one of my personal favorites, is leverage. In my live seminars, I always say my best friend, his name is leverage.

Because I can leverage property with other people's money. We'll get to that later, which many other forms investment can't really be done so well in stocks, you can also do to some extent. I like to let other people pay for my investment. You can let our people pay for your investment tool, which is the point of leverage and how specifically that's being done. We will learn in this strategies section eight and solicit finance model. But isn't it nice other people pay for your investment and your profit?

That sounds great to make. It is great. Okay, cool. Then there's always demand for property if you select the right location, right? Do we get more or less people on this planet all the time. More people will attack you.

So there's always more demand. We have things like divorce, and so on. So there's always demand, but you have to find the right occasion as demand is cheap. doesn't mean necessarily good. I see a lot of cheap properties in Detroit on the market this you know why there's no demand for them at all. Because of the collapse of the car industry there are people will wait.

You are in full control of property it audit CEO and CEO or CFO of your property. Unlike if you buy other investments or in stocks if you don't know if you bought Enron stocks, for example. And these guys, cheating, nothing you can do property, your boss always a good hedge against inflation because it is fairly safe. For most investment, it's quite easy to analyze, understand and do it. Unlike some of the what Warren Buffett calls weapons of mass destruction Some of these factual notes that the banks are offering that even they themselves don't understand, as we have seen in 2007, and eight is the sub prime mortgage crisis. We have many different strategies available that we can do that enables you to do a diversification within a property portfolio itself.

So that's why property is very good investment. And actually, statistics have shown that 80% of the people are wealthy in this world have made their money in property. You might not know them for property, but in the rich business people that might be known for business. They also on the back end, business profits to invest in real estate. Right. So what you have to see property as is a business, not as a hobby but this business is recession proof.

And at this juncture, when we record this end of 2016 to early 2017, it seems that there are quite dark clouds looming out in the economy. So people are getting worried on jobs and businesses but property is recession proof. Why? Because there's so many ways different ways how people can make money this property. One is, we discussed it earlier, buy below market value, create instant equity is a profit. It's not cash, but it is nevertheless profit.

You can generate passive income which is one of the focus of this class here. For good rental yield. You can buy property that is rundown, bad condition very cheaply. Fix it up and then flip it, meaning resell it quickly. For good profits, you can also force appreciation of your property that means simply you add value to it, it could be building an attic. It could be putting a chandelier in a Jacuzzi in decorating it extremely nicely.

That's for example, one of the strategies one of somebody I know uses in, if you buy a unit in a property buy the cheapest one perceived by the investors as the worst unit. Then he puts in real nice stuff like literally chandeliers, jacuzzi and what have you, and he gets higher until then equal to units. You can do change a fuse, discuss it earlier and we will in the salary section go into detail for that. Now comes one of the very interesting parts How to make money in property even without owning any property, but some people might not want to, for whatever reasons, not want to own property, but there's still ways to make money. One of the strategies there is called rent to rent. In the strategy section, we will cover it in more detail.

But just to quickly mention it here. It simply means you don't buy a property, you rent it and then you sublet it for a higher price. That is subject to the landlord's approval. Of course, what if he approves that you may do so let's say you rent a four bedroom condo for $3,000 a month. And then you rent out each room separately for 1000 a month that gives you $4,000 in and $3,000 out. You make $1,000 profit commands for pretty much doing nothing.

I know somewhat In Singapore, who does only disability nothing else, she makes about $15,000 profit a month. According to her, it's not verified. But really wow that's cool she rents to corporates not private. So, people who sent you know, Indian developers and all that for project walk to Singapore for live and then the guy goes back in the next one comes in. So the corporation rents from her and supporting these people there. So, good strategies.

Also, you can find good deals, if you have a good network of agents and then pass it on to investors who want to buy this property and you just take a fee. In Singapore, you need a license to do that. And you cannot sell property to integrals outside in other countries, many countries You don't need a license, you can just do that. You can do project financing. That means basically, during the construction of a new launch property, the developer sometimes takes money from investors rather than banks. So you can learn to probably develop or some money for one to three years while they're constructing it.

And once it's ready, of course, the people will buy the units will give the money form which will be paid back by the developer them. So that's a pure cash investment. But yields are in that era range about 15 18% of Microsoft's are just one cannot leverage. Likewise, venture rent, you don't have an upside for price appreciation of course. So some limitations there or giving private loans to property investor right. Let's say you want to loan me some money because you don't want to buy property yourself and you're going to interest rate for that.

You can also do that. So there's many many different ways we can make money in property that work in any market whether it's good or bad or recession economy or not, that you can apply if you take the right action and learn it all and actually do it. Of course after we've discussed the strategies, the details of them you can then decide which one's right for you or which ones multiple ones are right for you and then execute them accordingly. Right It's just the oil will go into details of all of this and support any questions so far? Can you can you revise or just go over the project financing one again, I think I I think I missed it. Anything.

Get the distinction between that and private loan. Essentially, it's the same I mean private loan would mean you give me money for example, and I pay you an interest. Project financing is something similar where you give money to a property development company that builds a new condo. And let's say it takes them two years to build it. So, the investor will when they buy a unit, they will pay the developer only at completion when they get the keys, but for these two years when the billing if you need money, right to pay the workers to buy the building materials etc. And that money that it might take from banks or they might take from investors so it can you as an investor can give a property developer a loan to finance a particular project.

Until this project is built, and somebody else buys units from and from that money, you're being paid back by the developer. Right, I think, I think right, thank you. Thanks. Great. Okay, so people always ask me Should I wait? should I invest now when is the best time?

The best time is 20 years ago. But since I can't do that, the best time is always now. Whatever calendar date you might be watching this, now is a good time to invest in property. Because the question is not when to invest, but where to invest. Because different markets have different cycles and behave differently. But at any given time, there's always a good market and a bad bad market to write Or if you simply know your facts which markets are performing at this time and which ones are not, then you simply go to one that is good enough.

And you don't have to wait four to five years until the overall market is good. Again, it's a limiting belief that only you in your whole market one to make money, and people are concerned about overseas investing. But there's nothing to be concerned about if you know what you're doing. And you know, causes which I'm teaching you sad. So you're, you're saying then because there is a, there are better and worse times to invest in one particular market because the market could be way overpriced or really hot or competitive. But somewhere, there is a property market and a property strategy that will work and our job is to go find that and take action now.

Is that is that a good summary? Yes, that's precisely what I'm saying. Great. Thanks for the question. It's like maybe Miss talking Get out you know the stock market well, but sometimes the general market goes up and sometimes it goes down right but even in a down market there are individual stocks that go up or industries perhaps in that are still still good because they're NTC click or behave different than the general market and so on. Same property.

It just let me have a quick look here. How much this model still have. Okay, we almost saw this model two. I still okay for about five minutes. Hmm. Yeah, okay, cool.

Then we can finish one two, all right. So, questions not when, but where to invest. And later in this course, I will teach you how to analyze markets, then you can make your own decision, which mark is right for you at any given time. So last portion era of modern tool is what I call the wealth cycle. And what I mean by that is what often happens for people. They have a little bit of income.

This is income and expenses and spend it and it's gone. Because Yeah, there's only little income. So they have to spend expenses. Why do they will get poorer and the rich get richer? And what about the people in the middle? The middle class, often poorer than the poor.

It's true. Why? Okay, where's my mouse here? Yeah. A poor person might earn, let's say $1,500 a month, and they spend 1500 a month, nothing left over. The middle class person might earn $5,000 a month.

But of course, they have to To pick our heart and enable nicer furniture than a neighbor, a bigger TV then a neighbor and the latest Lv back bigger than the neighbor. And so they spend 1000 a month and they get deeper and deeper into liabilities and how to get out of the trap by the wealthy what they know is if you have an income invested and grow it and grow it, and you don't spend it and you grow it more and such will spill and the assets get bigger because they focus on wells and not income. And that's what probably can help you to build assets to build long term wealth. It's not a quick, rich scheme that doesn't work, but it's a get rich slowly scheme that works. Right. And that's what, again, if you adjust your mindset and focus on these things and learn how to do it and actually do it can be achieved and its properties, best way to build these assets.

And you need the right mindset, as I shared earlier to which think differently, to accomplish that, and that's what we're here for to learn to fall in the long run into this category. There was one study done. It's hypothetical, of course. But that said, If hypothetically, we were to take away all money, all assets from all the people in the world, we divided by 8 billion over the number of people were equally everybody gets the same. Maybe, let's say $500,000. It would not take long until exactly the same people would be rich again, have all the money back and exactly the same people will be for them and have been them wanting to be rich, because they know how it works is it's a learnable skill.

And that's what we're here to learn. So these are the fundamentals of property investing, that you need to keep in mind when we actually do any specific strategies and mindset which comes as the next module to prepare yourself for the strategies and then the execution of precisely this will be easy. Sounds great. Okay. Any questions? No, no, no, that's that's clear.

I mean, that so the summary of that is the poor have enough money to survive, but that's also they don't get ahead. The middle class, spending money on the wrong things so they end up behind the wrong things being, you know, as Kiyosaki puts it, doodads things that don't generate income. The wealthy spend their money or invest their money in assets which provide income to do the things that they want to do rather than spending their money to begin with on those expenses, they invest them in assets to produce income to do what they wanted. Yeah, very good summary. Great. Great.

Got it. Okay, that concludes Module Two. Thank you very much, Adrian for your great participation and looking forward for modern Sweden. Great looking forward to it. Thanks so much.