By Rosemarie Khoo Mohd Sani
KUALA LUMPUR: Real estate investment company, FAR Capital Sdn Bhd, aspires to see more people in the middle (M40) and lower income group (B40) acquire their own property with little or no capital at all, in addition to getting a discount rate.
Founder and chief executive officer Faizul Azwan Ridzuan said with the right financial education and awareness of financial products, M40 and B40 not only could finally own a property but also escape financial burdens and increase their income.
Coming from a background in the banking industry and being a property investor himself, Faizul Azwan said the company is able to offer about 20-40 per cent discount from the original sale price of the property, making it more affordable for Malaysians.
“We hope to uplift 5,000 Malaysian families financially in the next five to 10 years while at the same time, we aim to clear overhang, unsold inventory (of property) in Malaysia,” he told Bernama.
He said as a company that dealt with property transactions, it understood the need of people, especially first-time house buyers, and is also playing its role as a cross-checker between developers and property buyers to the government while balancing the equity fairly in its clientele with 65 per cent Bumiputera and the remaining are non-Bumiputeras.
Buying properties at discounted price
FAR Capital began in 2014 when several young investors and property experts had an epiphany.
Since then, the company has benefitted around 20,000 clients, mostly M40 and B40 income groups through real-estate investment.
Its investments are mainly focused on high-rise residential units, simply because it is the highest number for unsold inventory by developers.
This is also because, from a rental point of view, he said high-rise units make more sense in terms of covering the mortgage or at least the interest portion of the mortage rather than landed properties which usually are not sufficient to cover the interest portion of the mortgage.
“We want to champion lower income to manage and own property, enabling people with RM3,000 basic salary per month to own three to four properties without using capital or literally no capital,” Faizul Azwan said.
He said the company would approach developers with high-rise unsold units where it would negotiate for a significant discount rate to buy out those units compared with what developers are trying to sell to the public.
“From a developer’s point of view, they can accept the discount if they are guaranteed a certain point of sales and deposits.
“For example, Meta City, a mixed-use transit-oriented development in Seri Kembangan. The price that the developer were selling was about RM700,000 but they could not sell all and not many could afford it…we were able to negotiate and managed to get it at RM480,000 because we have the volume to purchase,” he said.
Since its inception, the company has moved over RM1 billion worth of properties.
Make renting more affordable
By buying cheaper properties, the company also wants to make it cheaper for people to rent, where it has introduced Utopia Co-Living by converting units with three bedrooms into units of four bedrooms, making it still a decent condominium or apartment with furnished units to stay affordably for young working adults, especially in cities in Klang Valley.
“When we do this, many elites or the top 20 (T20) income group were unhappy because these tenants were not up to their earnings standards and recently, with the issues on partition ban, it could be bad for young people who are looking to share, leading to 20-30 per cent of room supply to go away.
“When supply depletes, it is estimated that room rentals could go up by 40-50 per cent. Therefore, the ones that will suffer are those young adults and the low-earning individuals who need to rent,” he said.
Benefits of becoming a far capital client
To enjoy the perks, an individual needs to become a client of FAR Capital.
With a fee ranging from RM1,000 to up to RM6,000 per client, they will be able to not only buy property at a discounted price but also get educated on investment-grade assets and how they can make money through renting their assets, reduce their monthly debt of commitment and increase their income level at the same time.
“We will look through their financial statement, including CTOS (a credit reporting agency) and CCRIS (Central Credit Reference Information System) status to calculate how much loan an individual can get and advise accordingly on which property market will suit them.
“We will also guide and teach our clients how to get active, passive and hustle income,” he said.
Moving forward plans
Faizul Azwan said the company that helps Malaysia address the overhang issue by property developers obtained its cash flow from the fee imposed to clients and from developers for every unit sold.
The company then rolls back the money it made into securing consignment or underwriting for property developers to purchase properties at a discounted rate versus what a person could get if they walk into a developer’s sales gallery.
“Today we are utilising a capital of around RM10 million to RM20 million.
“But if we are able to get listed on Bursa Malaysia, which we expect in the last quarter of 2024 or first quarter of 2025, imagine if we have RM100 million or more…we can do this more aggressively with more developers and get more discounts,” he added. – BERNAMA
