{"id":38354,"date":"2025-01-20T17:23:46","date_gmt":"2025-01-20T17:23:46","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/300k-invested-in-reits-why-did-i-buy-how-was-i-sure\/"},"modified":"2025-01-20T17:23:46","modified_gmt":"2025-01-20T17:23:46","slug":"300k-invested-in-reits-why-did-i-buy-how-was-i-sure","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=38354","title":{"rendered":"$300K invested in REITs? Why did I buy? How was I sure?"},"content":{"rendered":"


\n<\/p>\n

\n

\nI spend a lot of time thinking.<\/span><\/p>\n

Some say I am a thoughtful person.<\/span><\/p>\n

However, some say I think too much.<\/span><\/p>\n

We are all wired differently, right?<\/span><\/p>\n

During “Evening With AK And Friends 2025,” something that kept popping up could be explained as such.<\/span><\/p>\n

I said having money to invest with was not enough.<\/span><\/p>\n

We must have the right mindset and the right framework for what we want to achieve financially.<\/span><\/p>\n

Our methods and our motivation must match.<\/span><\/p>\n

So, I shared the pyramid which I use to help ensure portfolio stability, and at the very least make sure it does not sink to the bottom of the ocean and is lost forever.<\/span><\/p>\n

\n
<\/a><\/div>\n

<\/p>\n

<\/a><\/div>\n


<\/span><\/div>\n


<\/span> <\/p>\n


<\/span> <\/p>\n

Having the right mindset is also very important.<\/span><\/p>\n

Being prudent with money is the first and most important step as we need capital to invest with.<\/span><\/p>\n

Being patient and pragmatic is useless if we don’t have the capital to begin with.<\/span><\/p>\n

Patiently waiting for opportunities.<\/span><\/p>\n

Being pragmatic to know how much we should be investing in something.<\/span><\/p>\n

Someone asked what gave me the courage and conviction to buy into REITs big time during the GFC.<\/span><\/p>\n

I remember in reply to another question, I said we must know what we are buying.<\/span><\/p>\n

If we didn’t know what we were buying, then, we wouldn’t know if we should buy more or if we should sell.<\/span><\/p>\n

We could panic and sell when the price plunged instead of buying more, for example.<\/span><\/p>\n

I used the example of Saizen REIT and said I was sure their portfolio of assets was worth more and that there was a strong demand for them.<\/span><\/p>\n

When they sold some of the buildings to pay down debt as required by their lenders then, they were able to sell them at a big premium to book value.<\/span><\/p>\n

Mr. Market was feeling very pessimistic about the REIT and turned a blind eye to that.<\/span><\/p>\n


<\/span>
\n
<\/span> <\/p>\n

The GFC was really a credit crisis.<\/span><\/p>\n

Some REITs like AA REIT could not get their hands on loans.<\/span><\/p>\n

In the case of AA REIT, a white knight came along to recapitalize the REIT.\u00a0<\/span><\/p>\n

It was controversial and very ugly but it was the only practical way for the REIT to survive.<\/span><\/p>\n

The white knight was not altruistic, for sure.<\/span><\/p>\n

It was all about making money and with so much money involved, they would try to make sure the REIT delivered.<\/span><\/p>\n

So, what did I do?<\/span><\/p>\n

I got on the boat with them.<\/span><\/p>\n

Be pragmatic.<\/span><\/p>\n

I also mentioned Lippo REIT during the event and how I was able to get a 25% distribution yield back then.<\/span><\/p>\n

Indonesia was one of the very few countries that did not go into a recession during the GFC and the Rupiah was relatively strong then.<\/span><\/p>\n

Indonesia didn’t rely on external trade much.<\/span><\/p>\n

Their domestic economy was 60% of their economy if I remember correctly.<\/span><\/p>\n

The country’s urban population still went to malls and they didn’t have as many big malls back then.<\/span><\/p>\n

The malls weren’t going to shut down with demand that high.<\/span><\/p>\n

With a 25% yield, I would have gotten back my money in 4 years.<\/span><\/p>\n

Of course, some older readers might remember I sold more than half of my investment later for a 200% capital gain when Mr Market recovered from its depression.<\/span><\/p>\n

That was the one year I blogged about massive capital gains from investments on top of passive income.<\/span><\/p>\n

Be pragmatic.<\/span><\/p>\n


<\/span>
\n
<\/span> <\/p>\n

I also said that I had the benefit of advice from a senior investor in real estate who said to be brave.<\/span><\/p>\n

He said the market was behaving as if the buildings were being abandoned.<\/span><\/p>\n

Still, we must do our own research to verify which I did.<\/span><\/p>\n

Be brave but don’t be foolish.<\/span><\/p>\n

Don’t borrow money to invest with.<\/span><\/p>\n

Silly to risk what we need for what we don’t need.<\/span><\/p>\n

Don’t follow “gurus” blindly.<\/span><\/p>\n

Don’t ask barbers if we need a haircut.<\/span><\/p>\n

Educate ourselves and trust ourselves more.<\/span><\/p>\n

We cannot get it right all the time, for sure.<\/span><\/p>\n

However, if we are right most of the time, we should do well enough.<\/span><\/p>\n

In the 15 years after the GFC, people got used to low interest rates.<\/span><\/p>\n

REITs got used to that too and many borrowed too much and were way too optimistic.<\/span><\/p>\n

We want to avoid being too optimistic and being too pessimistic.<\/span><\/p>\n

Be pragmatic.<\/span><\/p>\n

When some were saying buy Suntec REIT, I produced a video on Suntec REIT on how much it has changed from the time I invested in it donkey years ago.<\/span><\/p>\n

Therefore, contrary to what those influencers said, I said I wouldn’t buy Suntec REIT.<\/span><\/p>\n

A few years back, so many influencers were saying buy Eagle Hospitality Trust and I produced a series of blog posts on why I wouldn’t touch it.<\/span><\/p>\n

Do our own research.<\/span><\/p>\n


<\/span>
\n
<\/span> <\/p>\n

Someone in the audience said my blog was hard to read and he preferred my videos.<\/span><\/p>\n

I think the truth is more and more people don’t like to read.<\/span><\/p>\n

Maybe, this is why in a recent international study, Singaporeans scored so badly in composition and comprehension in the years after leaving formal education.<\/span><\/p>\n

Outsourcing isn’t always a good idea especially when it affects our personal development.<\/span><\/p>\n

We can listen to what YouTubers have to say but don’t start relying on them for directions.<\/span><\/p>\n

Alamak.<\/span><\/p>\n

Nagging again.<\/span><\/p>\n

Primary objective of this blog is to better answer a question posed during the event.<\/span><\/p>\n

As I grow older, my brain dulls.<\/span><\/p>\n

It takes more time for me to recall all things I want to recall in reply to some questions.<\/span><\/p>\n

It is quite sad when I think of how I was sharper and more articulate before.<\/span><\/p>\n

The nagging just happened unintentionally.<\/span><\/p>\n

If AK can do it, so can you. \ud83d\udcaf<\/span><\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"

I spend a lot of time thinking. Some say I am a thoughtful person. However, some say I think too much. We are all wired differently, right? During “Evening With AK And Friends 2025,” something that kept popping up could be explained as such. I said having money to invest with was not enough. We […]<\/p>\n","protected":false},"author":1,"featured_media":38355,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96],"tags":[24673,3408,11044,11157],"dealstore":[],"offerexpiration":[],"class_list":["post-38354","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-300k","tag-buy","tag-invested","tag-reits"],"yoast_head":"\n$300K invested in REITs? Why did I buy? 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