FLIPPING dilapidated houses is not just a hobby for property agent Shahrezad Musa but also helps low-income earners struggling to own their own homes.

Shahrezad, 31, who works in Negri Sembilan and has been in the property business since 2012, said he starts by looking for abandoned houses, most overgrown with weeds.

Flipping houses refers to investors buying real estate at a discount before upgrading and renovating the property to sell at a higher price.

However, Shahrezad’s aim is not just to make a quick buck but to help those struggling financially to buy an affordable home.

He has flipped 17 houses and in 2017, banded together with six friends to form a group called the Seremban Investment Team.

“Our focus is to provide homes for less than RM200,000,” he told The Malaysian Insight.

“We have been able to sell refurbished homes for less than RM200,000 while still making a small profit. In particular, we want to help the low-income group,” said Shahrezad, who is also the director of his own company, SP Property and Management.

Bank Negara said last year that housing prices in Malaysia were “seriously unaffordable” with the median at RM313,000 being beyond the means of many households, in relation to the median household monthly income of RM5,228.

The central bank also said there was an undersupply of affordable homes, with top-end affordable houses priced around RM282,000.

On one of his projects, Shahrezad said his team bought an abandoned house in Senawang for RM80,000 and remodelled and renovated it with financial assistance from his wife, a doctor.

They then sold the house for RM160,000, a figure he said was easier for low-income earners to get a full loan.

“They only needed to wash their feet to walk into their new house. There was no need to renovate anything. Everything was complete and ready for them,” Shahrezad said of the new owners.

“We aim to sell below the valuation after renovation so that the buyer can take out a full loan. Our ultimate aim is for people to own their own homes instead of renting one.”

His team has set a goal of helping between three and four families buy a home every year.

As long as his team can buy properties at low prices, Shahrezad said they could ensure that each house sold generates a return of about RM30,000. If they sell at least four units a year, they could make RM120,000 annually.

“But what is important is that we have helped three or four families own their own homes.”

Shahrezad said his team only looked for properties under RM150,000. The unit must also be “really dilapidated, as we don’t want to be accused of taking advantage of people”.

Most of the abandoned homes he has flipped have involved owners facing financial difficulties or family disputes.

There were also homes that belonged to civil servants who did not realise they owned the property, as they were unaware of the automatic deductions from their salaries for housing loan instalments, Shahrezad said.

The team must also flip the house within a year to ensure the viability of their business model, he said, adding that strict conditions are also imposed on buyers to curb speculation.

Shahrezad said they looked for clients with a household income of less than RM2,000, who are married and with children.

“We also do a financial check on them to see whether they have been blacklisted or not, if they own other properties, how long they have been working and how long they have been married.

“This is to ensure they are genuine house buyers who won’t rent out the house or keep it for investment.”

One recent buyer, Mohamad Akmal Shafie, said owning his own home at the age of 28 on a take-home pay of RM2,000 to RM2,500 a month was nothing short of a dream come true. 

“The advantages were the price and strategic location in an area with various amenities,” said Akmal.

The private sector worker now lives in a single-storey terrace house in Rembau refurbished by Shahrezad, which he bought in May for RM160,000. – September 10, 2019.