Retiring comfortably on property income
Real estate investor shares hot deals and advice in her seminars
By Gabriel Chen
A KEY Singapore investor in a new RM500 million (S$209 million) Johor waterfront residential and commercial project takes a novel approach to property development.
Ms Tan Yang Po runs investment seminars on finding hot property deals - and often invites her students to invest in projects that she is involved with.
The latest instance came this week when Ms Tan, 48, made a big splash with the news that she is pumping about RM150 million into the 1.68ha Azea Properties at Danga Bay, a major site in the Iskandar Malaysia development corridor.
She said buyers of the high-end development, which will feature 700 high-rise service apartments and retail space, will include those attending her seminars.
The project, brokered by local real estate agency GPS Alliance, will be jointly developed with Malaysian investors.
Ms Tan owns a two-year-old property investing education outfit on the seventh floor of Clifford Centre known as Azea Personal Coaching. It has more than 1,000 members, including housewives and professionals, who pay as much as $1,600 a year to get exposure to hot property deals that are sourced by Azea's contacts worldwide.
Founder Ms Tan said she guides her members by setting goals and targets for them. She also advises them of the merits of distress investing, that is, buying properties way below market value, and doing property deals with no downpayment - possible in some foreign markets.
'The only way you can retire comfortably is if you have passive income. A lot of people are stuck in the rut where they make quick money and then lose money fast,' said Ms Tan.
The mother-of-two, an economics and political science graduate from the National University of Singapore, used to head the Asia-Pacific regional office of Yves Saint Laurent Comestic, Skincare and Fragrance during the 1990s.
In 2002, she teamed up with local entrepreneur Richard Tan of Success Resources to build e-learning systems provider SkyQuestCom from scratch.
She left SkyQuestCom in 2008 to start her current business, which includes property arm Azea Property Development.
Ms Tan has not worked in the property line full time, but insists she is no novice at real estate investing.
She caught the property bug after her first foray in the early 1990s, when she bought a two-bedroom condominium in River Valley after securing a 90 per cent bank loan. 'Within three months, I flipped the property and made $60,000. That was my first experience and it taught me that property is good,' she said.
She now owns four properties in Singapore. She rents out three of them, and said she derives her main income from her property investments, rather than from her seminars.
She said that Azea seminar participants or members need not worry about finding individual properties, as her team will compile deals. Members can order them through its website.
'Typically, we don't take a commission out of the deal because we are co-investors. But in very rare instances, we do. Normally, it's just admin charges and investors know they are charged that amount,' she said.
Group investing is encouraged.
Typically, a company is formed to invest in overseas properties, and members who participate will become shareholders of the company. The amount of debt taken on by these companies depends on the property deal.
Some can be as high as 40 per cent equity, while some can be as low as no capital outlay, she explained.
No member has pulled out of a group investment, but if they need to, 'they sell their share and exit'.
Azea members recently acquired £3 million (S$6.2 million) worth of 12 Victorian-styled apartment units in London and another 200 units of landed properties valued at more than US$7 million (S$9.1 million) in Houston - all of which were on offer below their market values.
Ms Tan has her fair share of supporters and critics.
A real estate agent who attended her seminars said many of her strategies are not relevant to the Singapore market. But another agent said that she is informed and has 'trained a lot of property agents here'.
Ms Tan believes her margin of safety is adequate. 'There are people who say there's going to be a double dip (recession), but if you are buying a (Houston landed) property at US$15,000 (a unit), how far can it go below that?'
'It's just next to impossible. The chances of the upside are so much more than the downside.'
gabrielc@sph.com.sg
Azea Property Investment founder Tan Yang Po is pumping about RM150 million (S$62.6 million) into the 1.68ha Azea Properties project at Danga Bay, Johor. -- ST PHOTO: AZIZ HUSSIN
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