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

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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have not signed up yet, click here.

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

her notes quickly. Uncle Patrick pondered over Goldies
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! WellIve always assumed that property sellers would only
have the highest possible selling price in mind
Ha! Uncle Patrick interjected. Then you assume wrong! Havent
you heard of that saying.. when you assume, you make an..
nevermind! Of course you know where Im 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, theres 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 familys house being repossessed.
Then theres where the crying starts. I guess its easy to figure
out. Goldie said, as-a-matter-of-factly.
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Uncle Patrick chuckled. Okay, youre right on point with

everything. But on a serious note, my dear Goldierepossession
is a scary thing. Its not only happening in Hollywoodits
happening in real life, everywhere and all the time here in
Malaysia. Now, when a homeowners 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
Look for sellers who
loan, explained Uncle
Patrick.
Ouch, said Goldie.

want to unload their

properties before they
get repossessed.

Ouch indeed. Then, more

often than notthese
people whose houses are
put up for repossession are already drowning in debt. If their
house gets repossessed, imagine the horrorsno money in the
ATM, no house to live in, no food to eat... well probably theyd
have something to eatif you live in the US, where they have food
stamps
Food stamps! Thats 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 thisat least with the money they get from
selling their houses at a lower price, theyd be able to pay off their
existing debtswhich I assume are all at risk of gaining lucrative
interest rates.
Goldie thought a moment, and said, Well, at least with the money
theyll be getting, theyll be able to start again. Or find a place to
rent that fits their budget.

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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
Patricks 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 youve 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.
Lets see... a-ha! How about divorce?!exclaimed Goldie, obviously
excited.
Haha! You, my dearhave 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.

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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 signedso what
they do is just sell their
There are sellers who house at a much lower
price to attract buyers
just want to sell their
and get a move on with
houses quickly because their lives.

of personal issues, like

a divorce.

WellHollywood
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?! Thats still money, Uncle Patrick! said
Goldie.
I dont know where Hollywood gets those numbers, but thats
something I cant explain.
Like I said, its a personal choice. Its mostly a preference that
resulted from something rooted deeply in their personal lives. I
am not a couples therapist, nor a psychologistjust a real estate
genius. Forgive me if I cannot answer your question, said Uncle
Patrick with a light chuckle.
Haha! Im 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 Lifes 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 basicallysmaller, 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? WaitI

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

Uncle Patricks cosy and large living room.
Welllets just say the bigger, the better. More relaxing. I dont
know, Goldie. The thought hasnt hit me yet. Probably soon. Id
move out and buy a smaller house. In Puchong, maybe, so its 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.

Look for sellers who

value convenience and
ease of transaction
above price. Like senior
citizens.

Uncle
Patricks
cat,
Shadow, suddenly came
out of nowhere. She
rubbed her face on Uncle
Patricks 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 dont looktoo good? Or
have a history? Do you get what Im 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 havent been maintained for
the longest timemeaning a whole lot of repairs for the next
owner, meaning more problems and inconvenience.
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I guess its 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. Youre right. These are obviously hard to
find, but if its easy to find undervalued properties then
everyone would be doing it and those properties wont be
undervalued!
Kind of a Catch-22 situation there, I know. But if you put in the
effort to look then youll be amply rewarded, thats for sure.
Goldie nodded.

The Game Of Business

ow lets 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
Look for businesses in
of
putting
their
businesses at risk!
trouble with properties
Uncle Patrick agreed.
on fire sale.
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, Goldieeven respectable and
profitable ones. Its a gamethe economy, that isyou never
know where the ball is about to head next.
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I know, Uncle. Youre 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 Patricks leather easy
chair over the couch. She kicked her flats, raised her feet to the
table, making Uncle Patrick smile.
Seems like youve made yourself comfortable, Goldie. Its a
beautiful sight, observed Uncle Patrick.
Goldie smiled. Well, Uncle P. I am learning a lot from you. I never
thought Id 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. Youre forgetting the most
important question.
Goldie laughed before realising that she still hasnt asked Uncle
Patrick where to find
these motivated sellers
Find a good agent to
who would sell houses
help you.
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?

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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 housewhat 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 Im
looking for. I also posted on my Facebook wall to ask my friends.
Its the agents job, of course, to help me get that house for me,
right?
Uncle Patrick smiled. Right. Its their job to make lives easy for
investors and homebuyers like yourself. Howeverif you are
planning on becoming a full-time property investor, do you know
what would make
things even easier?
Establish trust and
Tell
me,
Uncle!
Goldie exclaimed.

build relationships with

an agent who will
bring you the deals.

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. Its 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 endeffortless, if I may add.
But how will I make them come to me? I mean, I cant just barge
into their offices and say Heres my number, so call me if you know
a house thats 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 its not that simple.

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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 its 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 its 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
Asking the right
Grey.

questions will
legitimize your stand
as a serious investor.

Now. You need to make

them feel that you are a
serious investorthat
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 onehaving show money is truly important. I know it
sounds very materialistic but its only businessmost real estate
agents would act accordingly whenever money is thrown in the
equation.
That makes a lot of sense. Its 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. Its just the first step in
getting the trust of these real estate agents.
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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, its 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.
Its like you being a VIP, and your mobile number is always
number 1 on the agents speed call list.
I am ready to list down all these questions that should be asked,
Uncle! said Goldie while flipping her notebook.

Patricks Three Golden Questions

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

have any property that youve been marketing for a
long time? stated Uncle Patrick.

Ah. So youre 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. Ive 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:
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Uncle Patricks Golden Questions:

One: Do you have any property that youve
been trying to sell for a long time?
Uncle Patrick peered over Goldies shoulder. He glanced at her
notes, asked Goldie if he can borrow it, and with Goldies
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. Its a good
thing that these three ones are all almost self-explanatory because
I would need a magnifying glass if youve decided to explain
everything in writing.
Uncle Patrick laughed out loud, surprising Shadow, who was
sleeping peacefully at his feet. Good thing youre a fast learner.
What exactly is a hyperactive seller, Uncle?
Well, ask the agent if theres 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.

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Goldie chuckled.
properties?

Alright,

noted.

How about

multi-agent

Uncle Patrick explained, Its what it says on the can. Those are
simply properties which are marketed by multiple agents, or even
by multiple real estate agencies. Again, thats a sign of hyper
motivation or even desperation.
Makes sense, Uncle.

Lets Kick It Old School

ne thing Ive noticed about your generation, Goldieis

that you tend to depend on the Internet too muchfar
too much, in my opinion.

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

without Google or Facebook. Its a shame, really. Why? What are
you getting at? Goldie wanted to know.
Because sometimeswell most of the timeproperties that
are selling below its fair market value are advertised in the
local paper.
Ive to say that I havent 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,
You are more likely to
Facebook or Twitter.

find undervalued

I know. Newspapers
may be a dying breed
properties in
when it comes to news,
newspapers than at
ironically. However, its
still a force to be
online portals.
reckoned with when it
comes
to
classifieds
especially in this part of the world.
While theres continued migration from offline to the online
world, you will find that typically there are more undervalued
properties advertised in the newspapers than online.

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And get this. Newspapers are just the beginning. I havent even
mentioned postcards and leaflets yet!
Really? Postcards and leaflets? Wow, I didnt know that! Goldie
answered.
Well, now you know that Mr. Internet isnt really Mr. All-That,
Uncle Patrick smiled.
Hahaha. You have that one thought summarised pretty well, said
Goldie.

Sourcing Leads From Other Buyers

inally, theres 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 finders
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.
Dont worry. You will!
You can also source
I trust that. And when
you do and decide on
leads directly from
buying a lead from an
other buyers if you
investor, all you have
to do is go to the
have got the cash to
internet and do a little
research. This is where
spare.
Mr. Internet becomes
Mr. All-That once again, because its easy, quicker, and more
convenient.

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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, dont 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 youd 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.
Ill 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. Thats why youre my favourite nephew. Youre
on your way in becoming the second-best real estate genius on
this side of town.
Second? Whos the first, then?! asked Goldie.
Wellyours truly. Come on now. You would give me that one
credit, right? answered Uncle Patrick with a laugh.

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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
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