In a write-up piece by Budget Babe which evaluated the authenticity of ‘The I Quadrant (TIQ)’ property course, it was concluded that the course by TIQ is not a scam as it does not extend any false promises because there is a way to do what is taught by TIQ.
However, interested individuals are not told the risks until after they have enrolled and paid for the course. Therefore, once the level of leverage and risks are known, one might feel uncomfortable and not translate whatever that is learnt at the course into action, the writer noted. Hence, it may appear that money is spent for the course without any benefits in return.
According to the author, what prompted her to write on TIQ is the fact that her good friend came to her for advice whether or not to accept TIQ’s offer of buying a property.
The part that sparked hesitation in her friend was getting a tremendous loan of over S$900,000 when the monthly income was just S$5000. Several of her other friends faced the same dilemma of having attended the course but hesitated over purchasing property due to the leverage amount and risks involved.
The writer, however, stated that for those individuals who are fully aware of the risks involved with the approaches taught in TIQ course, perhaps there is some value for those individuals.
The Methodology
The flow chart above is the simplification of the method taught by TIQ its property course which the author created. The author created the flow chart based on her summary from her printed notes, the shared knowledge from TIQ students, her existing knowledge, and information from several professionals (lawyer, banker, property agent) who understand the process.
The recommended criteria for selecting property units
The writer stated that very high occupancy buildings with a strong track record in tenants are the best bet and one should purchase the units that can get the buyer maximum loan tenure.
TIQ admits that capital appreciation for industrial properties is slow, but this is made up by rental being predictable with decent yields, the writer wrote.
Thus, according to the author, any method can work.
The Numbers
To purchase the property, one needs to pay the cash downpayment portion and if that cannot be afforded, TIQ teaches how to purchase using other people’s money such as getting family or friends to lend the money for this property investment, the author wrote.
The author notes that this not a new concept because other high-ticket “gurus” also teach it.
One more alternative taught by TIQ course is to co-invest by getting together with other people. For those short on money, they can join up with their course participants (1,500 at the time of writing) to co-purchase a property.
Risks
The author highlights that there is no guarantee that the assumptions will always remain true in real life.
According to the historical chart below, there is downward trend in the buy/sell transactions and so the author expresses doubts on whether the assumptions would hold.
The author did some calculations in the scenario where one sell at the minimum price of $796,650 and pocket the rental proceed as one’s own profits, or in the case of co-investment, this might need to be shared.
Based on the charts above, the author illustrated the best case scenario where one is fortunate to sell at the prevailing market price. Utilising the 4-year strategy taught by TIQ, the prices in Q1 2016 vs Q1 2020 was assessed by the author.
Based on the calculations, the author questions the balance between the potential money gained and the efforts because there are other steps involved such as:
- spend time researching to find undervalued properties
- take up the loan(s)
- settle all the required paperwork
- liaise with the property agent at your buy/rent/sell transaction stages
- monitoring the market situation to sell when price goes up
Theoretically, you’re taught and encouraged to purchase multiple properties by repeating the steps over and over again, so the more properties you have, the more profits you take home.
The question of leverage is again brought up by the author. The author opines that the efforts and returns are not commensurate and that she would rather invest in the Real Estate Investment Trust (REIT) which allows no leverage and less capital to start out with.
Similar to REIT?
The method is similar that of REIT’s in the sense that one will get investors to pay for the downpayment of the properties. The author highlights that operating like a REIT without having the license is a grey legal area as there is no regulations demarcating this as illegal.
Other common objections
The author then listed out several common objections regarding this method.
In the event of economic slowdown, there is the possibility of not being able to rent out the unit and it will remain vacant for some period of time, the author notes.
She also cautioned that one’s monthly mortgage payments must be made each month but the rental income is not guaranteed. Therefore this could pose some trouble if one is not able to pay up and the bank repossesses the property.
Upsells by TIQ?
Like other high-ticket courses, TIQ also has a kind of elite club called “The Right Moment Mastery” where with a payment of S$3,000 to join, TIQ will take you to other countries like Malaysia and Taiwan to purchase property.
The author highlighted another similar way: which is to hire skilled professionals in the market (which she hires) who can offer guidance at just 2 % of the property price, without them having stake in the property at all. She also notes that the competency differences between TIQ property leaders and skilled professionals may be a deciding factor for one to consider.Added to this, there is also the “Property Leader” service in which one of the former students (with at least one property purchase) or coaches can offer guidance in exchange for 10% profit in the purchased property.
According to the author, information about Property Leader services that she gleaned from her interviews with ex-students are conflicting, particularly about the 10% required stake. She asked that anyone with more information to contact her.
Verdict on TIQ
The author opines that TIQ does work but it may not be for everyone as it depends on one’s level of emergency cashflow as well as personal risk tolerance.
She points to the similarity to Marko & Friends:
The author admits that she would not spend money to attend the course, but she believes that the TIQ approach can work. However, the assumptions may not always hold true in real life and the risks involved will be different for each invidual.
Before the advent of TIQ, many individuals have navigated the property sector with aid of skilled property consultants or agents, she stressed. She advised those who want to venture into the property sector on their own to be aware of the risks and demands needed.