Ep583: Eric Sim – Find a Buyer First Before You Buy Property

Andrew Stotz 00:02
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning. In our community. We know that to win in investing, you must take risk but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives. And that mission has led me to create the become a better investor community. In the community, you get access to our global asset allocation strategies and stock portfolios, our investment research weekly live sessions and most importantly, the risk reduction lessons I've learned from more than 500 guests go to my worst investment ever.com right now to claim your exclusive podcast listeners lifetime discount fellow risk takers. This is your worst podcast host Andrew Stotz, from a Stotz Academy, and I'm here with featured guest, Eric sim. Eric, are you ready to join the mission?

Eric Sim 00:58
Yes, I'm here to join yield, Andrew, and thanks for having me.

Andrew Stotz 01:02
I'm excited to talk to you. And I know we're going to enjoy this conversation as well as the audience is going to enjoy it. Let me introduce you to the audience. Eric sim, is the author of small actions, giving 66 actionable tips to help one achieve career success. He is a successful banker, having worked with Citi in Singapore, Shanghai, and Hong Kong before joining UBS investment bank, as a managing director. Eric, take a minute and tell us about the unique value that you bring to this wonderful world.

Eric Sim 01:38
Yeah, so first of all, thanks to the listener out there. Thanks, Andrew, for having me, because I find this amazing, we cannot learn from successes. Because a lot of times successes comes with a bit of luck. And I have a lot of luck in my life, although I started from a poor family. But along the way, I did have some luck to make good decisions, have some luck to meet some good people and have people who believe in me, or well, I find that the best thing to be able to learn is from failures from their worst investment. So that is so good. And for me. Now I'm in a stage of my life where my activities surround, sharing my knowledge, helping other people creating impact. And this is possible because I have made some good investment in the past, allowing me at this point not to focus on making more money, but making more impact.

Andrew Stotz 02:50
You know, I remember reading something that you wrote about helping your father out, I think you're helping your family out with noodles. And in was it 19 Or what year it was said three years before Singapore became a nation as I recall, something like that.

Eric Sim 03:06
That was my father started his prawn noodle store in 1959. This is before Singapore went independent. And I started helping him when I was in elementary school at the age of 1112. All the way to university time.

Andrew Stotz 03:26
It's interesting because my business partner here in Thailand, taught here a Thai man, he and I have worked together for 20 years, but he basically was helping his mom and dad with cars that they had selling. And it was tough. I mean, life was tough, and you had to kind of fight hard to get your spot. I wasn't like for you and your family at that time.

Eric Sim 03:50
We didn't have money, but we didn't feel poor. I was never one day or once felt that I'm poor. There was once it was a Teacher's Day. I wanted to buy something for the teacher because everybody bought something. My mother asked me to just buy a box of tissue paper and wrap it up, because it's a nice big box can cause real later. But I thought that was a bit embarrassing, but I didn't feel that is so bad. We still got food we got I must say that I have got unconditional love from my parents. Some people say oh, your parents must be so proud of you right now. You know, financially independent, big job. I say no. They will be proud of me. Even if I'm not financially independent, even if I'm not. I don't have a big job because all they wanted is for me to get some education. Take over the pronotal store if possible. If not, if I can work in an air conditioned office wearing a long sleeve shirt, that's good enough for them.

Andrew Stotz 05:05
That's an interesting story. Because I know in Asia, that's not always the message that parents give their kids, you know, you got to achieve, you got to get into this, you got to do this, you're not good enough unless you get this or that that's, I think it's a, it's a similar type of message I got from my parents, which was, you know, my parents didn't really say much. But I got the feeling like, Just be happy. Do what you like,

Eric Sim 05:31
I think is no, don't be happy, just be a decent person. You know, don't go to jail, don't you know, commit offenses, this this that's about it, you know, make a decent living whatever I do. I think my

Andrew Stotz 05:51
Well, you're a step ahead of me, Eric, because I did go to jail at the age of 14. And my mom's listening to this. And she can recall it very well, I'm sure. But I was a really, really troubled kid and having trouble with alcohol and drugs. And my parents, I basically attacked my father at one point at home when I was young. And he called the cops and I went to the jail of our little town in Ohio. And then they moved me to Akron jail, which was a bigger city. And I was there for a couple of weeks. And then they moved me into a foster home for a couple of months to cool things down and later, I did get back to my parents home. And eventually I got clean and sober and stopped, you know, using alcohol and drugs and stuff. And it's been 40 years in September that I haven't got high or you know, drank or something. So when we meet in Singapore or wherever, for yourself or any listeners, you'll always notice I always order water.

Eric Sim 06:51
That's great. I'm not a huge drinker myself, I don't have alcohol at home, you know, I, I just don't drink at home.

Andrew Stotz 07:00
So let's get into it. I'm curious. It's time to share your worst investment ever. And since no one goes into their worst investment thinking it will be tell us a bit about the circumstances leading up to and then tell us your story.

Eric Sim 07:14
Yeah, so I have made a lot of investment in my life style property. And I've always been successful. Then come about 10, eight to 10 years ago, Malaysia property was very hot. And just north of Singapore, there is jojoba part of Malaysia. They were selling properties and I thought this will be the next Schengen. You know, in when you're in Hong Kong, and you look at Schengen, maybe 2030 years ago wasn't so hard. But as China grew and develop Schengen property prices gone through the roof. So I say this is it. This is the time. So let me buy one property. 2400 square feet, so huge by any standard. Four bedrooms, six toilets. So every bedroom has a toilet. And there's one toilet for the helper. And there's a toilet for gas. There's a balcony with Jacuzzi. Amazing, right and very valuable compared to Singapore prices. I say that's it. I've been successful everything I touch always turn school. Let me buy one. So I bought one. And it was doing well because the height was still there. One year later, I say let me double down by one more. By the time of course the prices would have gone up and I pay a lot more for the second one. And now that was then went through construction and then two, three years later, there's a change of Malaysia government. And the previously there were plans about the high speed rail from Singapore to Malaysia, you know, connecting a few cities in Malaysia, including Kuala Lumpur. And there's going to be an Emirati the mass rapid transit or the Metro in some city or in Thailand even called the BTS right. So with that means we can cut short the time between the traveling between the two cities because now it takes normal traveling time is one hour to three hours with that maybe half an hour. Check in checkout, you know custom check will be easy. But once the there's a change of government or that God can say whatever the previous government promised you. Hold on, we're going to review we're going to reassess and start from scratch. So change your government normal transport efficiency. And that thing over supply, that is something that I never think because I was so kind of convinced that I'm always right. So I know I know there's always supply there's this huge amount of land in Malaysia, comparing with Singapore is it's not a good comparison to Singapore limited land. In Malaysia, there's, I would say unlimited land, and who's going to support buying all these properties, the high end property, you know, is their industry. So all that I threw away when I bought after prices came down. I tried to sell I couldn't sell there was no demand I tried to rent out it just not worth it because doing up the property in order to rent it out, will takes about one to two years of rental income. So that is my worst investment. And it's bugging me every month because I need to pay the mortgages, I need to convert foreign currency into Malaysia ringgit and is eating me up? You know, like my file, flawless track record, now has got this blemish in there?

Andrew Stotz 11:20
And how did it how did it end up? Or are you still owning that?

Eric Sim 11:24
I'm still owning it. I'm trying to make use of it, because my plan is to move their experience in Malaysia live because I think it has got rich culture. Then with the transport, right, I can always leave the income here. Because I'm no longer working for a bank. I enter with Zoom, I don't need to meet people, I can always plan like, two days in Singapore, three days. And in Malaysia, two more days traveling a little bit around the region. I'm still trying to get back to that, see whether I can make use of the property or rent it out or, or something. But as of now, my other priorities, which is to continue creating impact to people. So that has taken a backburner.

Andrew Stotz 12:18
And I just curious, like, is it? Is it all completed now? Or is it in partial stages of completion for the project

Eric Sim 12:27
is completed now. So I think the move in date was something like three to four years ago. So in vacant for the last three to four years. So it's still brand new, not not rented at all. I still feel that is a nice property very well build a used one of them, myself.

Andrew Stotz 12:51
So how would you describe the lessons that you learned from this

Eric Sim 12:54
lesson is don't let your past successes kind of build Berlei you when it comes to investment, so many people have fallen into this trap, just because you bought some Alibaba share and then you make huge amount of money, you think that everything that you touch is going to turn into go? Not not the case number one, number two, demand supply for properties to vet is very, very valid. So before you buy, the next time I buy, I will seriously thing is that unlimited supply. Number two, who is going to buy after you if you want to sell one or two years later? Who are the people who was going to buy? Is their industry to support rental market? Because if there are nobody living there or who live there nobody who needs to go there to work? Why should they rent your property? As if there's no rental? Then why should there be a high valuation for the for the property. So demand supply? past successes doesn't mean future successes. And number three lesson I would say when it comes to investment, not you cannot expect 100% of your investment to make money. Sometimes you lose as long overall you make it's okay. So don't be too hard on yourself.

Andrew Stotz 14:25
That's a lot of good lessons. I think one of the things that you made me think about I think such a great lesson is who's going to buy this. And I have a friend of mine who had a business that he started off and he asked me to help him sell that business and we ended up selling it to Microsoft, which was kind of amazing. But what I always respected about him was he knew from the beginning that he was going to sell it to Microsoft. So I really challenge everybody you know that's listening or viewing to think about the next investment you have the business that you have The condo that you're going to buy whatever it is, think about who is that buyer? Identify them now. And, you know, I think about a piece of land that I bought, and I know who the buyer is now not specifically, but I know what type of buyer would buy this for a property development or something like that. That is a big thing, because also what I've seen in Thailand, and I know it happens a lot in Asia is that we get all of these condo developments coming up. And I bought a condo once near my house. And when it was completed, I realized I didn't, I didn't like it, it was much smaller than what I live in, and I rent, you know, and then I decided, okay, well, I'll just become a landlord. And I realized that it's a hard business. And then I just decided just to sell it, which I basically got back the money that I spent on it. But what I realized is that sometimes investing in condos can be a trap, where you just get into it because you're excited. But think about you know, you have the flexibility of being able to not live somewhere and all that. But there's many people who don't have that much money, and then they sign up for this thing, and then they're locked in for the rest of their life. And that's just terrifying to me. So yeah, that's a huge lesson, you know, for listeners out there.

Eric Sim 16:21
Yeah. And also, try not to let one investment if it goes wrong to ruin your life. Yeah, I think. So fortunately, this investment didn't, although didn't do well. But it didn't stop me. Or it didn't affect my life. Except that at night, once in a while I think about it, ah, I need to pay the mortgage tomorrow what it has. Other than that, I eat the same in whole, I continue with my life in Singapore in Hong Kong and traveling.

Andrew Stotz 16:54
Yeah, and I think, listen to this show, and you realize I'm not alone, we all make mistakes. So we all have these experiences, and we get through them. So based upon what you learn from this experience, and what you continue to learn, let's just imagine a young person seeing an opportunity like this, getting excited about it, seeing the future is very bright. What action would you recommend that they take to avoid suffering the same fate?

Eric Sim 17:23
I would think right, really do your due diligence, right? And make the right type of comparison. So I was comparing I was thinking, this is the next gen. Con, I'm assuming Hong Kong is Singapore we involve are quite close. And Malaysia is China. No, Malaysia is not China. And there are a lot of telltale signs to say that they are not the same, the growth is not going to be the same. So need to be careful with that. I would say lay down the facts. And be Be your own devil's advocate. Right. There are some times where we are so excited that your friends are buying Hey, you see the property The brochure is so nice. But these are the facts. What could have gone wrong? Yeah. Before you make the decision, and what is the downside as well. So that that is

Andrew Stotz 18:25
one great advice. I think when you list down the facts, it also just slows you down. Slow down, go through it. Think about it. In fact, after listening to having 500 stories submitted to me and listening to almost 600 What I've come up with is six common mistakes that people make. And the number one mistake is failed to do their research. And so here I think the advice is clear. When something seems really exciting, like the idea and be putting it all together. Sit down write it down. You know, do your research, though.

Eric Sim 19:00
Yeah.

Andrew Stotz 19:01
What is a resource that you'd recommend for our listeners?

Eric Sim 19:07
I think resources read up. Because my idea about living alive and investment is try not to buy possession especially, you know, luxury goods, expensive clothes, sports car, you know, a wine cellar in the home. So those I find will not be necessary. And no, I've been through that phase. The enjoyment is only one or two weeks right. That's why I wear a Timex and model Rolex. But invest in yourself, invest in others and invest in assets. Invest in yourself will be upgrade yourself knowledge. I think that is very valuable, because once you have knowledge, you can gain social capital. For example, Andrew you now you can do a podcast, right? You can give voice to people, you build social capital next time you need some help and this person because of your podcast, as a good reflection or get more known among your viewers, next time you want something, Hey, can I come to Singapore have a coffee? Yeah, people will give you that time, because you build that social capital. So but that is because you learn how to do a podcast, you build your audience, right? So that is investing in yourself first, investing in others is buying lunch and buying coffee helping out. Because when you help others, you will also be your social capital, then thirdly, with debt, invest in asset. And I think start with investing in yourself, then, for me, I have attended classes for interior design, graphic design, and very recently, positive psychology. And I want to be a landscape designer, five years down the road. So investing in yourself, I put that in my book, it will be a good start. It's called small action, the one that you introduced earlier, during your career to big success, success. Tips, actionable tips, simple one that you can add on, then, yeah, that's the best resources. And, of course, I'm on LinkedIn. Any listener out there. If you want to read more, or engage or network, expand your network with my followers, feel free to leave a comment, then my followers will see your comment, they might engage with you.

Andrew Stotz 21:52
Yeah, that's a great resource. I mean, you're an example of someone who really puts LinkedIn to work. And I was thinking about one of the things that you posted there. And we were, we were, it was seven, seven items that you listed out. And the seventh one was about become a zoom expert. And we were just talking about that before, before I even turned on the recorder. So lots of value there. All right, last question. What's your number one goal for the next 12 months?

Eric Sim 22:20
Now, number one goal is how to live a meaningful life. Right? So stop, I am stopping to think about how to make more money, but how to use my money to create impact and to live a meaningful life. So that's my next live goal.

Andrew Stotz 22:40
Fantastic. Well, listeners, there you have it another story of loss to keep you winning. If you haven't yet joined the become a better investor community just go to my worst investment ever.com right now to claim your lifetime discount exclusive for podcast listeners. As we conclude, Eric, I want to thank you again for joining our mission and on behalf of a Stotz Academy I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Eric Sim 23:12
Yes, Andrew, this is amazing session for me. So I would say think big. Start small act now.

Andrew Stotz 23:25
Great words think big start small act now. And that's a wrap on another great story to help us create, grow and protect our well fellow risk takers. Let's celebrate that. Today. We added one more person to our mission. To help 1 million people reduce risk in their lives. This is your words podcast hos Andrew Stotz saying. I'll see you on the upside.