goodplace guide undervalued properties

“The GoodPlace Guide To

Hunting Undervalued

Properties”

By the GoodPlace.my Editorial Team

Copyright © GoodPlace.my. All rights reserved. Do not copy or distribute without

permission.

The GoodPlace Guide To Hunting Undervalued Properties

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Note: This is a continuation from the Part 1 of the

GoodPlace.my Homebuyer Guide Series on How To Value A

Property. If you have missed that report, go back to the

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oldie immediately got a hold of her pen, and went over

her notes quickly. Uncle Patrick pondered over Goldie’s

question, and finally said, “So. You want to know where

and how to find these super-motivated sellers who will sell

less than the fair market value, am I right?”

“Yes! Well—I’ve always assumed that property sellers would only

have the highest possible selling price in mind—“

“Ha!” Uncle Patrick interjected. “Then you assume wrong! Haven’t

you heard of that saying.. ‘when you assume, you make an..’

nevermind! Of course you know where I’m getting at,” Uncle

Patrick exclaimed. The two laughed before Uncle Patrick

continued.

Taking It All Back

“Well… there are a lot of factors. For one, there’s always

repossession.”

“Repossession… like when people fail to keep up with house

payments and they get kicked out of their own homes?” Goldie

replied.

“You make it sound so simple, I like it. But you are actually

correct.”

“I watch a lot of movies, Uncle. Besides divorce, another typical

climax in a Hollywood film is a family’s house being repossessed.

Then there’s where the crying starts. I guess it’s easy to figure

out.” Goldie said, as-a-matter-of-factly.

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Uncle Patrick chuckled. “Okay, you’re right on point with

everything. But on a serious note, my dear Goldie—repossession

is a scary thing. It’s not only happening in Hollywood—it’s

happening in real life, everywhere and all the time here in

Malaysia. Now, when a homeowner’s house gets repossessed, a lot

of problems will follow for sure.”

“Example?” Goldie inquired.

“Example number one. Very very bad credit score. Meaning, no

more chances of getting help being funded when buying another

property, or another

house loan, or any type of

loan,” explained Uncle

Patrick.

“Ouch,” said Goldie.

“Ouch indeed. Then, more

often than not—these

people whose houses are

put up for repossession are already drowning in debt. If their

house gets repossessed, imagine the horrors—no money in the

ATM, no house to live in, no food to eat... well probably they’d

have something to eat—if you live in the US, where they have food

stamps—“

“Food stamps! That’s really depressing,” said Goldie, along with a

sigh.

“True. Very Hollywood-like, like you mentioned. The

embarrassment is too hard to bear, even to imagine. So. These

people, what they do is sell their houses below the fair

market value even before it gets repossessed.

They may not be able to get the entire market value from their

property, but think of this—at least with the money they get from

selling their houses at a lower price, they’d be able to pay off their

existing debts—which I assume are all at risk of gaining lucrative

interest rates.”

Goldie thought a moment, and said, “Well, at least with the money

they’ll be getting, they’ll be able to start again. Or find a place to

rent that fits their budget.”

“Look for sellers who

want to unload their

properties before they

get repossessed.”


4 | P a g e

“Right. Everyone deserves a moment to start again, so I agree with

you on that one 100%,” smiled Uncle Patrick.

Goldie remembered seeing notice boards on the way to Uncle

Patrick’s swanky bungalow on Bukit Tunku.

“This reminds me of those notices that people put up which

advertise services where property gets exchanged for cash.”

Uncle Patrick nodded. “Yes, I bet you’ve seen those on your way

here! Those are middle men who typically target desperate sellers

in trouble and try to get their property at bargain bin prices.”

“Okay. Repossession counts as one. What are the other factors,

Uncle Patrick?”

Personal Troubles

here are a couple more. Sometimes, sellers would sell

their houses below their fair market value because of

personal preferences coming out from personal events.

Want to take a shot in guessing what one would be?” Uncle Patrick

asked.

“Let’s see... a-ha! How about divorce?!”exclaimed Goldie, obviously

excited.

“Haha! You, my dear—have been watching a lot of those

Hollywood films. But then again, you are always correct! Very

good!” replied Uncle Patrick, with a hearty laugh.

Uncle Patrick continued. “For recently-divorced couples,

sometimes splitting the money that is going to be made by the

selling of their previous house would take a hell lot of

inconvenience on both ends.

T


5 | P a g e

Not everyone can stand the company and the sight of their exes,

especially when meetings had to be done, lawyers to see, papers

to be signed—so what

they do is just sell their

house at a much lower

price to attract buyers

and get a move on with

their lives.”

“Well—Hollywood has

told me that the majority

of couples have a 30%

rate of getting back

together, so selling their houses at a lower price probably is

always not a good idea?! That’s still money, Uncle Patrick!” said

Goldie.

“I don’t know where Hollywood gets those numbers, but that’s

something I can’t explain.

“Like I said, it’s a personal choice. It’s mostly a preference that

resulted from something rooted deeply in their personal lives. I

am not a couples’ therapist, nor a psychologist—just a real estate

genius. Forgive me if I cannot answer your question,” said Uncle

Patrick with a light chuckle.

“Haha! I’m just thinking out loud! Alright, Uncle P. Point taken. So

my list is growing. Do I have anything else to add to that?”

That Need For Life’s Simple Pleasures

ust a few more. In addition to personal preferences,

sometimes people who are hitting their early 60s would prefer

to sell their previous houses at a lower price. The need to move

out and move in to something simpler, say, something more

peaceful and quiet, or basically—smaller, becomes something

retirees consider.”

“Got that one,” replied Goldie. “Selling their previous homes

below the fair market value is actually convenient. Who needs

a big house when all your kids are living their own lives? Wait—I

J

“There are sellers who

just want to sell their

houses quickly because

of personal issues, like

a divorce.”


6 | P a g e

think you are an exception,” said Goldie, while looking around

Uncle Patrick’s cosy and large living room.

“Well—let’s just say the bigger, the better. More relaxing. I don’t

know, Goldie. The thought hasn’t hit me yet. Probably soon. I’d

move out and buy a smaller house. In Puchong, maybe, so it’s easy

for me to bug you for a cup of sugar that I forgot to buy at Tesco

because I am really ageing and getting forgetful.”

“You are funny, Uncle! You are a funny, young-at-heart-old man,

living in a big house!”

“You forgot to add ‘real

estate genius’ on that one,

my dear,” laughed Uncle

Patrick.

Uncle Patrick’s cat,

Shadow, suddenly came

out of nowhere. She

rubbed her face on Uncle

Patrick’s toes, signalling

him to get up and get her food in the kitchen. Goldie scanned her

notes quickly, then a question struck her as Uncle Patrick came

back and sat down on his chair.

Undesirable Properties

“Uncle, how about those properties that don’t look—too good? Or

have a history? Do you get what I’m saying?” inquired Goldie.

“Ah, yes. Good thing you brought that one up. Of course, not all

houses or condominiums look as amazing like The Troika!

“Also, sometimes these properties haven’t been maintained for

the longest time—meaning a whole lot of repairs for the next

owner, meaning more problems and inconvenience.

“Look for sellers who

value convenience and

ease of transaction

above price. Like senior

citizens.”

http://klcccondominiums.com.my/troika/


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“I guess it’s fair enough to say that these houses would be sold at a

relatively lower price,” explained Uncle Patrick.

“Hmm, but are there lots of those around? I mean, I do see

abandoned properties from time to time especially when I am

back at my hometown. I would be hard pressed to find any in KL, I

mean.”

Uncle Patrick smiled. “You’re right. These are obviously hard to

find, but if it’s easy to find undervalued properties then

everyone would be doing it and those properties won’t be

undervalued!

“Kind of a Catch-22 situation there, I know. But if you put in the

effort to look then you’ll be amply rewarded, that’s for sure.”

Goldie nodded.

The Game Of Business

ow let’s shift gears a little and talk business.

Businesses are prone to downturns. If businesses

reinvest their profits into residential properties and at

some point the company faces cash flow problems, what they do is

they put out that residential property for sale, and sell it below its

fair market value,” explains Uncle Patrick.

Goldie took a moment to take a sip of her Earl Grey. “Well, in

tough economic times, I guess this is probably the last-ditch effort

of some businesses to

save their behinds instead

of putting their

businesses at risk!”

Uncle Patrick agreed.

“During the boom years,

you will see companies dipping their toes into the property

development business, so diversifying into property is not a new

thing.

“A lot of businesses do this, Goldie—even respectable and

profitable ones. It’s a game—the economy, that is—you never

know where the ball is about to head next.”

N

“Look for businesses in

trouble with properties

on fire sale.

http://goodplace.my/blog/jackasses-on-the-bandwagon/

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8 | P a g e

“I know, Uncle. You’re correct on that one. So... I have in here in

my notes… Repossession, personal troubles, personal preferences,

business cash flow issues… got it.”

But Dear Motivated Seller… Where Art Thou?

Goldie changed seats, choosing Uncle Patrick’s leather easy

chair over the couch. She kicked her flats, raised her feet to the

table, making Uncle Patrick smile.

“Seems like you’ve made yourself comfortable, Goldie. It’s a

beautiful sight,” observed Uncle Patrick.

Goldie smiled. “Well, Uncle P. I am learning a lot from you. I never

thought I’d enjoy talking about real estate this way! Every

question I have is all answered rather brilliantly!”

“Thank you,” replied Uncle Patrick. He cleared his throat before

continuing. “Hang on a moment, Goldie. You’re forgetting the most

important question.”

Goldie laughed before realising that she still hasn’t asked Uncle

Patrick where to find

these motivated sellers

who would sell houses

below their fair market

value. “But of course!

Where is my head!? I guess I got too excited. Or probably you put

something in my Earl Grey when you returned from the kitchen?!”

“I assure you, no. But will consider putting Red Bull in it if you

keep on forgetting things,” laughed Uncle Patrick.

“I am so sorry! Okay, Uncle Patrick. The floor is yours. Where do I

find these uber-motivated sellers?”

“Find a good agent to

help you.”


9 | P a g e

The Agent Is Your New Best Friend

“So, let me ask you a question, Goldie,” Uncle Patrick said.

Goldie sat up straight. “Sure, Uncle.”

“Now, when you first thought of buying a house—what did you

first do?”

“Hmm. Well, first I Googled the few locations that I had in mind to

research and read property reviews.

Then, when I have zeroed in the property I wanted, I asked

around for property agents who could help me out with what I’m

looking for. I also posted on my Facebook wall to ask my friends.

It’s the agent’s job, of course, to help me get that house for me,

right?”

Uncle Patrick smiled. “Right. It’s their job to make lives easy for

investors and homebuyers like yourself. However—if you are

planning on becoming a full-time property investor, do you know

what would make

things even easier?”

“Tell me, Uncle!”

Goldie exclaimed.

Uncle Patrick

continued. “Well, the

first thing you want

to do is to make a property agent COME to you. Not the other

way around. It’s a role-reversal, so to speak.

The agent would come to you if he knows a property that is selling

below its fair market value. That pretty much makes things easy

on your end—effortless, if I may add.”

“But how will I make them come to me? I mean, I can’t just barge

into their offices and say ‘Here’s my number, so call me if you know

a house that’s selling below its fair market value, maybe?!’”

“Hahaha! If it was that simple and less-chaotic then a lot of people

would have done that already. But it’s not that simple.

“Establish trust and

build relationships with

an agent who will

bring you the deals.”


10 | P a g e

“Most of the time people who would do that strategy will have

their faces stuck in mud, nothing else. Agents consider them as a

waste of time, so it’s best not to do some barging in the near

future. Or better, never,” Uncle Patrick laughed.

“Of course, Uncle Patrick! I was only kidding. But seriously. I know

a lot of it depends on negotiation, an open communication, and

trust in order to build a relationship with these real estate agents.

I guess it’s a little harder than it sounds.”

“Trust is always a huge factor. Of course, you have to

demonstrate professionalism each time you deal with estate

agents, so you look credible and serious enough in order for the

deal to push through.”

“How does one do that, Uncle?” asked Goldie.

“Honestly? Agents would prefer to work with someone who is

modest. Not the barging type, like you suggested.” Uncle Patrick

laughed out loud, in

between sips of his Earl

Grey.

“Now. You need to make

them feel that you are a

serious investor—that

you are capable of your

word, and that you are serious enough to consider all the

options, the risks, and everything that may be involved in

investing on a property that is selling below its fair market

value.”

“Go on,” Goldie replied.

“For one—having ‘show money’ is truly important. I know it

sounds very materialistic but it’s only business—most real estate

agents would act accordingly whenever money is thrown in the

equation.”

“That makes a lot of sense. It’s business, after all.”

Uncle Patrick nodded his head. “Right on point. Also, real estate

agents would appreciate it if you would act promptly on decisions

that need to be made. This gives out an air of professionalism on

your end, making them want to trust you. It’s just the first step in

getting the trust of these real estate agents.”

“Asking the right

questions will

legitimize your stand

as a serious investor.”


11 | P a g e

“First step? I thought that was the last! But go on, Uncle Patrick. I

have your attention”.

“So the next step would be asking the right questions in order

to create a relationship with a real estate agent, and

eventually let them tell you which properties are selling at

lower prices.

“When a relationship is built, it’s always easy for investors to get

calls from real estate agents to let them know which property is

selling at what price, or which property is selling on the market

that is below its fair market value.

“It’s like you being a VIP, and your mobile number is always

number 1 on the agent’s speed call list.”

“I am ready to list down all these questions that should be asked,

Uncle!” said Goldie while flipping her notebook.

Patrick’s Three Golden Questions

lright! First question would always have to be: ‘Do you

have any property that you’ve been marketing for a

long time?’” stated Uncle Patrick.

“Ah. So you’re saying that the longer a property is listed on the

market, the higher the possibility that a seller would be willing to

sell it at a lower price, below its fair market value?” asked Goldie.

“Not always. But the possibilities are high. I’ve been in the real

estate game for so long to know that most of the time, these sellers

would be really, really motivated to sell property at a much lower

price.”

Goldie scribbled all the information down hard. She needed a

moment to pick up another pen from inside her bag, as her

current one has stopped responding. She wrote, finally:

A


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Uncle Patrick’s Golden Questions:

One: Do you have any property that you’ve been trying to sell for a long time?

Uncle Patrick peered over Goldie’s shoulder. He glanced at her

notes, asked Goldie if he can borrow it, and with Goldie’s

permission, he wrote and added:

Two: Do you have any hyperactive sellers?

Three: Do you have any multi-agent properties?

He then gave Goldie her notebook back. Goldie examined her

notes.

“Your handwriting is far from legible, Uncle Patrick. It’s a good

thing that these three ones are all almost self-explanatory because

I would need a magnifying glass if you’ve decided to explain

everything in writing.”

Uncle Patrick laughed out loud, surprising Shadow, who was

sleeping peacefully at his feet. “Good thing you’re a fast learner.

“What exactly is a hyperactive seller, Uncle?”

“Well, ask the agent if there’s any seller who is particularly

annoying! You know, the type who calls the agent ten minutes past

midnight to see if there are new leads. If this is not a sign of

desperation, God knows what is.”


13 | P a g e

Goldie chuckled. “Alright, noted. How about multi-agent

properties?”

Uncle Patrick explained, “It’s what it says on the can. Those are

simply properties which are marketed by multiple agents, or even

by multiple real estate agencies. Again, that’s a sign of hyper

motivation or even desperation.”

“Makes sense, Uncle.”

Let’s Kick It Old School

ne thing I’ve noticed about your generation, Goldie—is

that you tend to depend on the Internet too much—far

too much, in my opinion.”

“Well Uncle Patrick. My generation would not know what to do

without Google or Facebook. It’s a shame, really. Why? What are

you getting at?” Goldie wanted to know.

“Because sometimes—well most of the time—properties that

are selling below its fair market value are advertised in the

local paper.”

“I’ve to say that I haven’t been paying attention to The Star for the

past couple of months now, Uncle Patrick. I get most of my news

on-the-fly either through

online news sites,

Facebook or Twitter.”

“I know. Newspapers

may be a dying breed

when it comes to news,

ironically. However, it’s

still a force to be

reckoned with when it

comes to classifieds

especially in this part of the world.

“While there’s continued migration from offline to the online

world, you will find that typically there are more undervalued

properties advertised in the newspapers than online.

O

“You are more likely to

find undervalued

properties in

newspapers than at

online portals.”


14 | P a g e

“And get this. Newspapers are just the beginning. I haven’t even

mentioned postcards and leaflets yet!”

“Really? Postcards and leaflets? Wow, I didn’t know that!” Goldie

answered.

“Well, now you know that Mr. Internet isn’t really Mr. All-That,”

Uncle Patrick smiled.

“Hahaha. You have that one thought summarised pretty well,” said

Goldie.

Sourcing Leads From Other Buyers

inally, there’s also that option of buying leads from

other investors. Meaning, you can get some information

on these properties that are selling below their fair market

value if you have extra ringgit to spare to pay for their finder’s

fee,” explained Uncle Patrick.

“Ah! That sounds really easy! But the problem with that is not

everyone has that extra ringgit! However, that will make out

things very, very easy. I wish I had that extra ringgit, Uncle

Patrick.”

“Don’t worry. You will!

I trust that. And when

you do and decide on

buying a lead from an

investor, all you have

to do is go to the

internet and do a little

research. This is where

Mr. Internet becomes

Mr. All-That once again, because it’s easy, quicker, and more

convenient.”

F

“You can also source

leads directly from

other buyers if you

have got the cash to

spare.”


15 | P a g e

“Noted, Uncle. What are the places where I can perhaps get leads

for a fee?”

Uncle Patrick smiled. “Well, there are certain websites which I can

get leads based on location. For example, KLCCcondominiums.my

is a specialized site on KLCC properties. You can find potential

buyers at that site from all over the world, not only Malaysia.”

“Got it!”

“Also, don’t discount good, old-fashioned networking. The

more people you know, the more information you can scrape.

Sharing deals is a common activity among investors who have

developed relationships with their peers, so just find the right

person to help you out and stick with him or her, and expect that

avenue of information to come alive right before your eyes,”

replied Uncle Patrick.

Learning & Putting Everything Into Action

oldie closed her notebook and stretched. “That was a

whole lot of information I can definitely use! Thank you,

Uncle Patrick,” she said.

“Hahaha! I never thought you’d be this interested in real estate as

much as I am! You learn quick and asked the right questions. I

hope you get to apply them some time soon.”

“I’ll try my best. I would be professional, ethical, balance between

Mr All-That Internet and the old-school, and just… basically allow

these real estate agents come to me by building trust that will lead

to a long, satisfying relationship. Am I right, Uncle?”

Uncle Patrick raised his hand for a high-five. Goldie laughed, and

returned it back. “That’s why you’re my favourite nephew. You’re

on your way in becoming the second-best real estate genius on

this side of town.”

“Second? Who’s the first, then?!” asked Goldie.

“Well—yours truly. Come on now. You would give me that one

credit, right?” answered Uncle Patrick with a laugh.

G

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16 | P a g e

“Of course, Uncle,” Goldie replied, smiling. “Of course.”

In Summary…

1. Look for sellers who want to unload their properties before

they get repossessed.

2. Understand that there are sellers who value quick cash

and convenience more than the price.

3. Sellers with personal issues (like impending divorces)

may agree to sell at price lower than the market value.

4. Businesses with cash flow problems tend to offload

properties at fire sale prices.

5. Getting the help from a good agent is a must. Know

what to ask an agent when you hunt for undervalued

properties:-

a. Look for properties which have been marketed for

a long time.

b. Ask for hyper-active sellers.

c. Ask for multi-agent properties.

n the next episode of Goldie & Patrick, we explore one of the

“hidden” aspects of property investment – simple methods to

maximize cash flow from a property purchase.

We will share some little-known tricks on how to make

investments generate immediate cash in order to make your

property empire grow. If you are looking to scale up your portfolio

then you will find this report valuable.

We are currently putting the finishing touches on the report, but

you can get early access by leaving us a message on this page:-

Click Here

I

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