He is getting better

4 mths 6% returns
Company doing distribution business of liquor and wines

Following previous post. What does different Loan Tenure mean to our personal cashflow .

I’ll try to show it here with a chart.
Assuming we got a property.

Cost of Property $125,000
Down Payment 20% $25,000
Loan Amount 80% $100,000
Yearly Interest 5%
Yearly Cash Supply $13,000
Yearly Inflation 3%

With the above figure.
A 10 year loan will require monthly instalment of $12,727.86
A 30 year loan will require monthly instalment of $ 6,441,86

10YrC is Cashflow (cash on hand) with a 10 Year Loan
30YrC is Cashflow (cash on hand) with a 30 Year Loan
10YrPV and 30YrPV the those cash in todays value (Present Value).

As you can see, at end of 30 Years, we’re $65,000 or 25% richer with the shorter loan. In today dollar term, we’re $27,000 wealthier.

From another angle, if we use longer loan, by year 5-6, we’ve save enough cash (~$30,000) for down payment to another property even if we’ve 0% interest for those cash on hand.

Break even for both is around 20years. After which we’ve more cash on hand with the shorter loan.

So, is it better to have long or short loan?

There are always 2 groups of people. One that like to have as short a mortgage loan as possible and the other groups who advocate stretching it to the limit.
Lets take a look at the argument of both group.

Short Loan : I’ll save on interest, imagine if you take a $1M loan at 5% for 30 years. You are paying a total of $1.93M at the end of the loan. 2X..
Long Loan : Money is depreciating. with inflation of 5% annually. $1.9M is nothing in 30 years. Assuming house price inflate at the same rate as inflation. the $1M house will be $4.3M
Short Loan : That value will not change. If you paid it up, lets say in 10 year. You paid a total of $1.27M. Saving $660K, this is before taking into consideration of compounding if put in other investment.
Long Loan : Thats future money. At 5% inflation, money devalue by half in 15year. Its better to make good use of current money.
Short Loan : You’ve the point, to make good use of current money. If you can use the money saved now and  earn more than bank interest of 5%. If not, it make sense to pay of the bank, else you’re loosing on booth end. Paying bank interest and loosing on dollars depreciation.

Leaving Singapore to Medan soon. Grandma funeral will be tomorrow.  A great mother of 5 girls and 2 boys. She is very kind and is always alert.
Grandma passed away on Wednesday at 2.40pm.

Established Since 2009.
Buy, renovate and sell 40 home per month. Has 60 staffs and contractors under payroll. Concentrate in Atlanta. Has good relations with authority and has first access to 4000 distress home to choose from per month.
Lachlan mcpherson
Ryan McFarland
Reid Stewart – Head of Acquisitio

Research focus property acquisition

Qualified buyers pay USD995 menbership fee dto qualify.

Investment options

$25000  SGD
1% 1st month
1.25% 2nd month
2.5% 3rd month

$50000 SGD
1.25% 1st month
1.5% 2nd month
2.5% 3rd month

Market Profile.
Uses Volume information across time period to help identify VPOC and S/R. Giving visual indication for possible market reaction when price touches these high probability areas.

Market Cycle.
Market moves a different cycles or frequencies. sometime faster, sometime slower. That’s the fundamental reason why indicators don’t really work over long period of time. A setup will be accurate for a period of time and failed to give similar result one or two months down the road.

Zig-Zag Indicator.
Zig-Zag indicator uses setting for minimal price movement to plot a saw-tooth like line on the chart. the highs and lows will dance around at different frequencies.

Combining the above.
One strategy is to use Zig-Zag indicator to plot the dominant cycle/frequency that the market is currently trading at. Couple with POC from Market Profile. We can make decision to long or short the market.

50-60 houses renovated per month.

Hong Kong pushing out 10-15 per week.

Singapore Shawn pushing out ~3 per week.

15% return per month

$3000 per 3 years IPP

$45-50K per house.

————–

New offering – USD2,000,000 investment. 10K shares.

Fund is to purchase distress houses, renovate and rent out.

Rental return will use to purchase more houses.

effectively after 3 years, base will grow 50%

Investment.

1. Fixed investment in quantum minimum SGD 50,000

2. Fixed return of 3% per month for 6 months.

Business Model

B&C organised big decorations for festivals such as China town CNY decoration. Xmas decoration for Singapore Flyers

They get funding to purchase materials for the job on hand, on payment from event organiser and make the profit.

Analysis

1. There is no real collateral for the investment. The props may be expensive in making but will not worth much in a foreclosure.

2. B&C stops 6 months investment options. All new investment are with 12 months tenure.

3. The payment method is clean. 7 checks upfront. We can bank in 1 check every month for the 3% return, on month 6, we bank in both 3% return and the principle.

The advertisement put it – Invest with a heart. Proven exit Strategy. Over $50 Million Invested by Singaporeans over last 11 months.

Product.

Investment in a SPV for investment in US property. Fixed 15% return at end of 12 months.

Structure

<Diagram>

Information provided by Infinity Treasures.

1. About USD 4 Million (SGD 5 Million) collected monthly from Singapore investor.

2. Cost to purchase and refurbish a typical house in US – USD25,000

3. US Developer can turnover 300 houses per month and is doing 100+ per month currently.

4. Investment is giving 15% return net at end of 12 months.

5. Developer in US is a UK Pension fund approved investment

6. Developer getting around USD 5 Million investment from UK montly

Analysis

1. To fully utilise the USD 4 million investment from Singapore. Developer will need to turnover 160 houses monthly.

2. This means we’re taking up full capacity of what US Developer is doing currently.

3. There is some investment backlog that the UK Developer need to clear. With the rate of investment funds flowing in, the backlog can only be larger.

4. Above calculation has not take into account other sources of investment funding that the developer is getting. There are another 160 houses backlog that they need to clear for UK investor if they are also getting the same deal.

5. The amount of investment gotten from Singapore and UK doesn’t looks balanced. Singapore is such a small country, and we’re getting around same investment quantum?

Conclusion

1. This could be short term investment, we’re in 12th trench, may be too late.