Sunday, August 14, 2011

Adventure in Buying Auction Property - Part 3/3 (The Financing)

After getting the stamped Proclamation of Sale (not sure if this is the right term), I have 3 months to get the loan and pay the bank. I thought it will be easy enough to get financing and so I started work on the flat first.

The 3 days Haris said will finish the work turn into a few more and wiring also took a while coz Raja was doing it part time. But it's alright since it also took me a while to settle Syabas & TNB. Went to Syabas early but they said there's no meter available to install. TNB was easy. All in all, took me a month to settle the renovation and now it's time to look into financing.

Halim the auction guy gave me his contact for law firm and they quoted around RM1,800 for the whole thing. I asked a guy at the bank's law firm if they can take my case but he said it's not possible to represent the bank and me at the same time. So I asked him to suggest his friend which he did and the guy quoted me RM1,500; which is cheaper so I go with this firm.

Next will be to look for financing.

Silly me. I thought it was easy to get one. After all, I cleared up my credit card debts long time ago and don't owe anybody anything anymore. I used to have a bad debt with Celcom way back from 1998 (remember Motorola 8870? hehehe) but I settled that when I moved to Kulim in 2006 coz Digi didn't have good reception there.

Since the auction was by Maybank, it was my first choice and walk in there confidently. But lo and behold, was told that they don't give housing loan for under RM50k. My heart stopped for a minute there and after a hard front for nice composure, my smile muscles must have ached a lot then, I walked off heavy.

Since I was told that is the general thing among banks, my next choice was personal loan. So off to Bank Rakyat I went. Again, no luck. My current employer is not in the panel list :). Final choice is the normal banks personal financing which has around 8% interest rate.

Suddenly buying this flat is not attractive anymore. Called around and the lowest I think was Bank Islam at 6%.

So went home, talked to the wife, look at our savings. Called my mom. Rejected. Plus, they don't have that much anyway. Check our savings again.

Turn out we need only RM10k from outsider. Obvious choice was my sister in law. She's a nice person but strict. Lucky she has some savings then.

So we settled the bank financing at the expense of our own savings.

With a total cost around RM40k (I forgot the lawyer fee in previous post), I think it will take us around 9 years to get that money back (simple math, no inflation and stuff). By that time I will be around 50 years old and not knowing how my income will be after 55, at least the rental will be some cushion.

Retirement planning. The reason I'm doing this and knowing my own character that, liquid cash is not that safe with me. Though I hope that, whatever we do, we don't forget the King of Kings, Sustainer of the worlds, whatever He wills will come .... and for us, for His mercy to be greater than His judgement. Forgive me and Bless them O Lord.

Pic from Google

Friday, August 12, 2011

Adventure in Buying Auction Property - Part 2 (The Reno)

And so, on Monday 30th of May, 2011, I met Halim, paid his dues (total RM1,850 including RM50 for stamping fee), and got the stamped Proclamation of Sale. Quite excited actually. Can't wait to go see the apartment. And anxious too. Since I only paid RM2,900 for the 10% deposit, I still have balance of RM25,600 to pay the bank. But I put the anxiety aside and wanted to work on the place soonest possible.

And one good thing about being a resident in a small taman and lived there from the earlier phase, I got to know some people who do small renovation works. So the next day, I brought this Indonesian fella to the place. Before he came, there's a iron welding shop underneath and I talk to the guy about door grilles. I forgot how much he quoted but he said about RM12k to do up the whole house. Asked him how he knows and he said, he has seen many abandoned units and that's how much it costs to fix them up.

So brought this Haris guy to see the place, talk to him about things need to be done:
  1. Paint the whole apartment.
  2. New doors for entrance & toilet.
  3. Windows for living room and main bedroom.
  4. Table top for the kitchen (I know I don't have budget for the cabinet proper).
  5. And cleaned up the house.

After nego and stuff, I got RM2,500 for the above jobs. He wanted to do wiring too but then, I thought he probably is not an expert in such thing. Plus, I know this guy from surau that work for a living in wiring stuff and since I talked to him a few times before buying the unit, asking advice about the place etc, I thought it's just good ethics to talk to him.

Brought Raja (raja of the Malay heritage, not Rajagopal or such) to the house and he said he's doing the same thing at another block and he charged that guy RM1,600.00. Told him I honestly don't know how much is the fair price but since I already know him, asked him to take a look, do the wiring, and tell me the price later.

He showed me around the apartment and it turns out that almost 100% of the wires already been taken out. Some people eh. And since it's like that, it just makes better since to re-wire 100% again.

The kind of person that I am, is that sometimes I just go with the flow and don't look into much details. Like with Raja, I took that he's an honest person and just go with him on the wiring cost. Of course, I'm not like a sufi shaykh who can look into a person's soul and knows what's going on inside. If you find a real sufi gem, there's a vast difference between them and normal ulamaks. I think the arabic word for them is murshid, and a murshid is who guides people. In the arabic sense, you can't guide people if you don't know what is wrong with their ego/nafs and how to subdue those egos.

When he was here in June 2011, Shaykh Hisham said there are 800 bad characters in a person. But if we diagonose ourselves, we think that we may have only a handful :). So a real gem doesn't only tell us how to be good but also guide us and plod us to the right path. They are as a craftmen who twist and turn the clay to make good vase :).
Shaykh Hisham in Jogja, 2010
So in the end, I spent RM2,200 for wiring the whole apartment, lights in all rooms, fan in living room and wall fans in the bedrooms.

Renovation didn't include piping works since we weren't sure how healthy the piping system was. In the end, some connections to the water tank were loose and we re-routed the shower pipe so that it's more location friendly. The sink outlet was also clogged so we re-piped that too. And I asked the fella to drill the concrete wall and add a faucet for washing machine outside the kitchen area. This all came to RM660.

Once everything fine and dandy, I look at the place and thought, might be nice to paint the floor. At least anybody who lives there doesn't feel the cold blooded cement. So called an architect friend and he suggested epoxy paint. Those kind that you will find on factory floor or Ikea parking lot. So bought a 5 liter can for RM140 and paid RM200 to Haris to paint it.

Now for the utilities, apprently you have to pay any arrears to Syabas and since the water account was cut off for more than 6 months, you have to engage their contractor to put the meter there. I didn't think then about asking discount for the arrears so I just paid them RM162.20 and another RM350 for the contractor.

TNB was easier since the meter was already there, I just showed them the Proclamation of Sale and they just changed the name. And paid RM220 for the deposit.

And I forgot about the grille. By now I just don't want to shop around so I went to one place I know just before Petronas on LDP and after some discussion, he quoted me RM1,450. Not for the whole house but for the essentials.

I also bought some curtain railings from hardware store and an aluminium ladder, just in case anything happens and I would have one handy to put at the place. These amount to RM206.

I'm not gonna do the math here but all in all, I spent RM9,980.20 to make the place liveable. Plus the auction price of RM28,500, total amount spent was RM38,480.20.

I think the original price was around RM42k. So the money we spent was quite worth it since it not only cover the whole house but also some fittings also. My apology to the original owner. I hope he's doing alright.

Adventure in Buying Auction Property - Part 1 (The Buy)

It all started in early May, 2011.

After a few years without bonuses, I finally got a little bit since moving to this new co in Nov, 2010. The money is not that much, about 5k, but I knew that if I didn't do something solid with it, it will go down the Samsung Galaxy Tab pretty quickly :).

And I also knew ASB wouldn't be that save with the kind of man that I am. I will come up with far too many creative excuses to withdraw it later. And I had been thinking of buying property at an auction for some time now. That little financial push gave me more courage to search the web for options.

And I knew being the lazy guy that I am, the property has to be in my own taman. I knew if it's outside, I wouldn't be able to give the tender loving care that it needs. So I search a few websites:

and found some options near my house. The first one was a RM45k fourth storey flat. Took me lots of huffing and puffing to get there. And I thought I'll get lazy to walk up that far and won't visit it often if there are any issues with it.

Second option actually were two shop lot apartments at commercial area in my Saujana Puchong taman. I went to check out both places. One was occupied by what it seems like an Indian family and the other one never been occupied. Both were around RM28k.

After narrowing it down to the above two units, I contacted an agent from and also one guy who left his phone numbers by leaving all these small fliers at mailboxes. Since both only charge RM1k for their service and since the guy came to my taman to collect the bank draft, so I went with guy Halim. I didn't go to the auction myself since it was on a working day and to be honest, never been to one and I thought RM1k is alright of a fee for such thing.

The Indian unit was auctioned first and I didn't win according to Halim. He asked me before if there are other bidders, how much I want to up the price; told him to go up by a few thousands only. And since the unit was already occupied, and I don't want the hassle of chasing them away, I thought it's alright to loose.

For the 2nd unit, about an hour before the auction, Halim called and asked if there are other bidder, do I want to pay them? I was like, shit man, there's no way I could verify that and since I'm also at work doing other things, he caught me in a good situation. Not wanting to loose this unit, I told him I'm willing to pay only RM800.

And so, I lost another RM800 and got a 2nd floor 692 square feet apartment for RM28,500.00. These are some pics of the apt.

Main Hall. Main door needs changing, so is the toilet door.

Main bedroom. Only the window frame left, the window itself gone.
Main hall. And the window panes are missing.

ah lucky the meter is here

From outside