Three weeks ago, I met up with a prospect-cum-good friend, and to protect his privacy, let’s call this person Mr. C. It’s has been over a year since we first met in the CBD. Things changed and he has moved on to another company and is doing very well. His career has taken off big time and he updated his recent events to me.

Some years ago, he was lured into acquiring a student type accommodation with promise of good yield from a local agent representing a developer from Australia. Believing he would be able to obtain finance of up to 70%, he signed the contracts and they have gone unconditional. Let’s call this investment property IP#1. Lately he bought a residential unit from another agent. Let’s call this second investment property #IP2.

He reversed his decision to hold on to both properties and he sold both securities prior to settlements. The respective agents that sold him these two investment properties managed to sell them for him, IP#1 being sold at the original price and #IP2 higher than what he has originally bought.

It was quite refreshing to me. In my opinion, I felt he ‘lost out’ on a very good opportunity in disposing #IP2. Some months ago, he told the valuation for #IP2 is higher than the purchase price and to be honest, that kind of price cannot be replaced especially at the location where he has bought. If he has settled it, he would have ‘instant equity’ created in his portfolio.

Not to mention if he is to refinance and uplift his equity next year or the year after, it would be quite comfortable and easy for him. By on selling his property, he lost money in agents’ commission, and some other fees (he still manage to reap some profits in the end) that he otherwise would not have incurred if he didn’t sell. When I was talking to him, I was trying ‘tracking his chain of thoughts’. Then I realized he had a very strong trading mindset. He was obviously trying to ‘get out’ and consolidate his position when there was an opportunity to. And the thought of getting into ‘debt’ was obviously too trying for him.

I said to him that if I were him, I wouldn’t have sold it because in 10 or 20 years’ time, it would be 4 times the value of what’s it worth now. I guess I was just being frank, and if that offends him, too bad. I was just being frank and straightforward. At the end of the day, the decision was his. He has spent a great deal of time researching on properties he had acquired only to on sell them before settlement for a profit that’s not worth mentioning. How does that work…?