Hi, this your seat man, author of the property apprentice out earn by editor and today we're going to discuss about various different strategies that you can employ in your property investing journeys in order to support your goals and make your vision and your actual income happen. Right these strategies is the How to, we learn so far the fundamentals, we learned about having the right mindset. And now we learned how to do extra methods or we can make all this happen. So very exciting module and we have a lot of different strategies that we can select from. According to your investor Type, select the right strategies, and you can have only one search in place. That works best for you.

Or you can mix and match two or three different spreadsheets that support your goals to the maximum, but don't try all 14 at once. So otherwise you get distracted too much also. Okay. So, strategy per se means how we can achieve your goals, your business will also take a strategy, how to get customers how to make sales and how to do this, how to do that. And strategies in property is how can I make this happen off passive income or as a combination of both, depending on what you've chosen strategies, you can have two or three as I mentioned already just now, and they could also evolve or change over time. Firstly, how the strategy itself is executed.

Maybe because of the law change or because of you because you're family situation changes or your job or business situation changes or you want to retire, and maybe on different strategies. So on the high level, we have a pyramid here that gives you different classes or types of strategies. So important the foundation of my pyramid is passive income strategies. These are strategies that give you cash flow, monthly income, that enable you to replace your income or supplemental income, or even potentially retire on it, if it's sufficient for you to live on. These are typically a little bit lower risk strategies, but these are the foundation for financial freedom what is financial freedom and you interpretation agent financial freedom is having on passive income either business or investment income. That more than covers your expenses so that you don't need to rely on a job to live.

Absolutely right. And the important to keep in mind right, as soon as your income that you get passively without too much exceeds all your monthly expenses, your lifestyle is supported that you have to pay all your bills for your property, mortgage or your insurance, for your food, for your clothes, for your travels. Then you're financially free. And that is actually not too difficult to achieve, to get really, really rich is probably Not so easy. Although it can be done to what to get financially free is not really that difficult, right? So, when we talk about retirement, for example, at whatever age when old age or some people want to retire young, a younger age, what the government has you, and what insurance companies or banks tell you, you need millions and billions of dollars to tie confidence because they want you to save money in the bank at 1%.

They give you interest. But it's not true. You don't need to be rich or millionaire. What you need is income. And those income can be generated from property. If you have positively flowing properties where you get actually paid property rather than having to pay which a lot of investors seem to normally take So getting paid.

But that's why this passive income strategies are the foundation in a pyramid and the foundation basis for financial freedom, because that's what passive income gives you financial freedom ability to retire or at least only work if you choose to like me and not because you have to like 95% of the population. Then we have the active stretches. These are one time deals that you do so you actively buy and sell property is these give you a bigger cash flow but only one time obviously, you make a one time profit. And those is not recurring income, like a passive income strategies. A bit more capital intensive and holistic With slightly more risk to medium level perhaps than the passive income strategies and then on top of the pyramid vft equity strategies, these are basically long term equity in property means I briefly explained it in the previous call you remember what equity means term.

So building equity in a property would be having wealth in the property. So, the value of the property less the debt you have on the property is the amount of equity you've got there. So, if you want to build that over time, you will use an equity investment strategy. Precisely Yeah, right. Good. Thank you.

So, to recap equities the difference between what the property is worth on the market and optimal value Less any liabilities you might have against it. And typically, it's not guaranteed, but typically in the long run property prices will go up. And if your property that you bought for 100,000 is now worth 200,000 and a mortgage of 70,000, you took up his half paid back and you only owe 35,000 needs 20,000 on 35,000 you have 165,000 equity sitting in that property, and we can look later what we can do with that equity. So, starting with the passive income strategies, so the main goal here is to generate positive cash flow. You will have to get paid to own the property meaning you income is greater than your outgoings all included, including mortgage insurance. If you don't want to manage the property yourself and you're putting the management agent, management agent after all this is gone, there still has to be money left over.

That's the that's the The goal of the passive income strategies, because that is your income. I'm not saying quit your job right now or give up anything else for now it can be additional income until you build up enough or anybody who's watching this has sufficient obviously depends on the place of residence. In Singapore, we need a lot more passive income to become financially free, then people living in Cambodia or life was over there. You can live on two $300 a month in Singapore that lasts maybe until the second or third of the month. cuz then it's gone. And then there's still 28 days left over.

So they're not so much focused on capital appreciation, although, of course, it's still a component, right? We it's not that we not look at appreciation, but it's not the main goal. I always compared to employee the passive income is the salary. The capital appreciation is your bonus. So if you get a bonus, fantastic, but if not, you still have a salary. And we will look at ways how we can still make capital appreciation.

Nevertheless, although it's obviously not as much as some other strategies but the beauty of this is it requires work only once in the beginning to create the income there Research requisite part. But after that very little effort, and the money keeps coming forever, for that one time effort. Passive income comes to when you travel when you sleep, and you're eating 24% that's the beauty of it. And forever. So low risk, but also not very high returns, whatever is stable returns. It's so more for the conservative type investors as well.

So that's what passive income strategies are. I will walk you through various different ones in a moment. So let me finish the overview for us. So the active strategies, those are more focused asset appreciation. They might sometimes have a component of income, but often they don't. So, because they only buy and sell transactions, these could be very short term, what we call in property flipping.

And short term could be as short as an hour or day, potentially. In Singapore right now sub sales with the government will measures are not allowed anymore, but in many countries, they are still allowed. Like in the UK, US. I'm not sure about Australia. But if you're interested, you can find out if you have a good opportunity whereby somebody wants to sell your, the property to you at price x, and you know, somebody else who can buy the property for x plus Whatever percent on top, then all you have to do is be the middleman and get it from the vendor and resell it to that other person for quick profit. That's what we call flipping.

Then, of course, we can do a we buy a rundown property to a renovation, upgraded and then sell it. So that's obviously not very fast to do this might be several months, but it might be very profitable strategy. Also, I know one investor who only uses this particular strategy, but he does it like on a lot of properties per year, and makes makes very good profits on that strategies. Change of use could be one, which we'll briefly discuss already. And we will look into more details later. change between commercial and residential property.

So he's have a little bit better returns a bit higher risk also involved? Yes. Is that change of use from residential to commercial or from commercial to residential or either You don't? Okay. Thank you. And then building equity.

Right here to recap all the settings no equity means the difference between market value and your liabilities, how much you owe against this particular property. Typically, they should build up over the long term by itself by the market. What else can you do to increase your equity in a property other than letting the market take care of it? I guess if you buy cheaply I mean, if you already have it as you write for existing property, how can you increase the equity? If you choose to do so we could add value to the property. So could you add value to your property?

That's not the market but it's your politics was more correct. And what else? One more thing you can do, if you choose to do. So it's the difference between how much your property's worth and how much you all right. So either increase how much it's worse or Oh, so you can pay down the debt. So you have to pay down some debt.

Then you have more equity sitting in your property. So short term, how to do it. You mentioned it already increased value of your specific own property, nothing to lose the market and one of the beautiful things Here is equity loans, which enable you to take out the equity to convert it to cash, which we'll discuss in finance more later on. They might have some higher risk, but also high return in the long run, potentially always have to say potentially, because it's never guaranteed. Would you be interested to find out how we can own a property that pays a passive income for free? Yes.

Okay, so let me show you take some money. buy a property, really below market value, as you're discussed refinance it off. Six to 12 months with the banks again, for the then market value, I will illustrate it in our specific sample. Afterwards with some numbers, this is the high level process. So, if you do this well enough, you get all your money that you put in back out from the refinancing. But refinancing means you still own the property, right?

That income, that passive income that you generate out of this, you can keep for life. And that money that you've taken out from the bank, by the refinance, you put into your next property, because you didn't actually pay for it. If you do your numbers correctly, which I will teach you in the finance section. You can actually play this game with the same money about one See here, because it takes about that long to do it. But then every year, you can get one more, one more, one more, and you always keep the property don't sell it into this particular strategy. And your passive income will always get bigger and bigger.

Why why'd you actually haven't paid any money for your policy? Because you all got it back from the bank. Let me explain it in some numbers and illustration to you. out it, more specifically works. Have you heard this concept before? I've heard the theory.

I've never seen a real working example of an investment that this was actually done on. Okay. Well, I can give you some of mine once. This CST generic one, the illustration. So one of the keys In the process here in this game is, of course that you find a BMV property below market value. That's why we are asking for ridiculous prices.

Believe me, there are people who sell at surprises. People who lost their job, can't get a mortgage anymore, get divorced, or whatever else brings them into desperation and desperate people take desperate measures, including selling their property cheaply, because they want to sell it quickly on a market they can get more but they have to wait six, eight months to maybe get sold and get settled. But if you can buy quickly means who can usually buy cheaply. So let's say you find somebody with such a property You only have 25% capital and you buy this property, you take 75% finance, concrete numbers will follow in the next slide. And then six to 12 months later you do a refinance and pull out all that money didn't put it back out. So now you have gotten it for free, because you didn't take anything for this property anymore.

And basically, then keep it let the equity grow over time, keep the passive income stream for for your financial freedom fund. So, yeah, guys, that's an example about that. One. Last question about long. Yeah, I showed the example but you can ask the question first. Okay, so the question is, and I realized that most people don't have the capital to buy a property.

With cash. So that's it that would be uncommon. But say it was a relatively cheap property and it was below market value. Is it just as effective to go buy it with cash so you can execute it quickly without worrying about the banks and all that, and then finance it afterwards to extract the equity. Can you do that? Excellent question.

Yes. It's significantly easier to get finance from Bank in many countries, at least, that you already own. And you don't have time pressure and all that and the cash flows already coming then at the point of purchase yesterday, right. So especially if you want a quick transaction for BMV, then potentially you might need to do what you just described very well, Adrian, just pay cash first, how to find the cash. If you don't have it, don't worry. In the finance module, we will discuss that particular question.

Okay, and then pull it all your cash out again. At the point oh, Fie finance. Yes. Okay. So that's a valid strategy. Yeah, absolutely.

Right. Thank you, is actually precisely that spreadsheet which I've used in my latest purchase in mentors that way, I bought something relatively. I can maybe show you later, the actual concrete numbers of that particular property. how it worked. I made it work. So what I'm discussing here, also for our viewers is not a theory.

I'm doing it all the time. It works. Nice. But let me give you a generic illustration for us. On the slide here. So let's say you find a property and thousands and in many markets these are by numbers by by the look at Thailand, Malaysia, UK, US.

Probably not Sydney but other parts of Australia. in smaller cities you might get some, but never mind. The Hundred Thousand is easy to calculate. That's why I use it. So you don't get 30% but only 20% below market value. That means you buy it at 80,000 right and you only have 20,000 own capital available and take 60,005 It's all in the auto version that you mentioned, Adrian, you will just put up the 80,000 in cash if you have it.

Or you can find it doesn't have to be old money. That's one of the tricks. But let's say you have 20,000 so you put 20,000 in, you take 60,000 finance to pay the 80,000. So now the property is yours. You have paid, how much for it? 80 Okay, but how much of your money was involved?

20,000 Right. So you actually only pay 20 indoor the purchase price of 80. Okay. So if you financed it at that time, you need to wait at least six months to can refinance it. If you use your spreadsheet to do a cash address. You can do this a lot earlier.

You don't need to wait Listed you can, as soon as you have it, apply what comes next year. But if you did finance it, you need to wait six months to do a refinance. That's the rules that the banks require. Otherwise, no, no waiting time involved. So typically, the property would have appreciated after one year, or six to 12 months in market value if you've selected the right location. However, in order to run this strategy, effectively, this is not necessary.

Right? It's not necessary that the market value goes up. And that's one of the key points because I cannot influence the market. And if my strategy is dependent on a market value going up, then it might or might not work. So one of the key aspects is I don't needed, if I Machiavelli goes up is a bonus. It's great.

I love it. But independent of the market, this actually still works. That's one of the important things that I need to highlight here. Yeah. Yeah. So the market value hasn't changed still 100,000.

But now, I can do a refinance and finance 80% of this property on the market value, not on the purchase price, because at the point of purchase, the bank will only loan you based on either the purchase price or the market value, whichever of these two is more. So my purchase price is at my market standards. So the only loan on the 80, not only hundred, but now there's no purchase involved, right? There's only market value you do a refinance. So now they can loan you on market value. So you take 80,000 you increase your loan from 60 to 80.

If that payment for the mortgage, then still cows is still covered by the rent as we still get passive income out. If your yield is high enough that works. So, now you get $80,000 back from the bank, which means you kill the first loan, pay back the 60,000. And for the 20,000 back into your own pocket, so you get all your money back. So, if normal own money in your deal, but you still have the property and you still have the passive income Nice, very nice. All right, and then what do you do next?

Do it again Exactly. Step number four out of a three step process repeat. So this cycle, if you do the financing upfront, might take you a year, but after a year, you buy the second one and the third one and the fourth year. If you have enough cash, that is a lot faster. Because this second step, you don't need to wait six to 12 months for the refinancing. You can do it as soon as the property is legally yours.

Which might be depends how fast lawyer works, but you can do it pretty much immediately thereafter. Get the valuation and you can fast track this whole second same process just make it faster. Yes. So when borrowing when refinancing or if you pay cash bond The money the first time the bank, the valuation looks only at the market value of the property, it doesn't care what you pay. No, it does care, it looks at postings on the left side here returns. Here in this process, the bank will look at the market value.

And let's say the value are told us some thousand. And then they look at your sales contract, which says 80,000. And they will only loan you against the lower of these two numbers. In this case, the purchase prices law, so they will loan you on the purchase price. if let's say you had bought this property for 110,000 How much would the loan against 100 right exactly because that's a lower number now. However, he on the right side of the equation there is no safe Contract there is no purchase.

So, the only number they look at is the market value okay even though six months prior there was a purchase contract that you closed on look at that they only look at the current market value okay so now there is no purchase you just say hey bank I got a property here see well devaluation you have to get a proper value to do the valuation for you. My value set is hundred and 2000 and I want a loan against it please and then a little bit under 2000 like I said it's not a get rich quick scheme but it's a get rich for sure slowly scheme and that's A simple process to follow. Let me see. I will show you some concrete numbers to inspire you