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TONY MARTIN

Saturday, November 20, 2004

A conversation with Jedidiah Liu and Kasey Wong makes you feel like you're a guest on a Canadian version of "Regis and what's-her-name Live!" The two kibitz, excitedly add to each other's stories and, over all, make you feel like they're powered by part remarkable synergy and part extraordinary energy.

Both 29, the two have been a couple since high school and, now married, have recently left the corporate world to invest in real estate together. Ms. Liu studied accounting and had been working as a CA with a major accounting firm. Mr. Wong, who studied finance, has worked for a couple of the big banks as well as Towers Perrin analyzing pensions.

How they do it

A self-described dreamer, Mr. Wong started to envisage a new financial future -- and a very different lifestyle -- after reading the best-selling Rich Dad, Poor Dad, which emphasizes real estate. He also had seen his own parents -- immigrants from China -- move out of their old home and instead of selling, renting it out and using the cash to supplement their income.

"I thought: 'Why can't we do that,' " he recalls. "They're not stupid, but they have little English and they weren't educated here. We have educations and our English is better so we can speak with lawyers and agents."

Mr. Wong spent the next year researching the real estate world, dreaming about supporting he and his wife on rental properties, but not telling her. "I'm a dreamer, but when things are put in front of me I'm scared because, once you've lost money, which we did with some stocks, it becomes more difficult to take risks."

Meanwhile, Ms. Liu was also casting about for a different way of working -- and living.

"I wanted to spend time with my family, not getting up at seven," she says. "And for my kind of job you have to do a lot of overtime and it wasn't worth it for the money I was earning. You've got to have a vision, and for me, I didn't want to see my kids going to daycare, I wanted to raise them myself."

In the same vein, the two don't talk as if they're after mega-riches. "I don't think money is a big issue but you have to have enough every month to sustain you to do what you want to do," Ms. Liu says. For the couple, that means raising a family in the future, as well as doing charity work.

Ms. Liu ran into a like-minded fellow from Alberta who told her he wanted to retire at 35. "I'm like: 'I want that,' " and she rushed off to read the book he'd recommended, namely Mr. Wong's new bible, Rich Dad, Poor Dad. "I was so excited and said 'That's it, we're going into real estate.' "

Mr. Wong, of course, had to fess up that he'd read the book a year earlier and had the same idea. "She was angry at me and said: 'Why didn't you tell me?' "

They knew they needed some help, Ms. Liu says. "We had the basic idea, but we needed to find somebody who wasn't just going to help us buy or sell, but who knew numbers and areas, and could tell us why a certain property would be a good investment."

They took a disciplined approach, interviewing a number of agents, and quizzing them on everything from their specialty, the areas they were familiar with to the percentage of their business that was investment properties, and how many deals were repeat business.

They then field-tested the three that made their short list, and one agent was the obvious choice. The agent turned out to have another key quality -- the willingness to spend a lot of time with the two. Over the next year, they set foot in 100 different properties. "Every night I'd stay up to one or two looking over properties, and I was still working at the time," Ms. Liu says.

They had begun looking at condos, but the numbers didn't work, with the mortgage payments, condo fees, and maintenance charges exceeding what they could hope to get in rent.

Even when they switched their sights to duplexes and triplexes, the numbers didn't work, although Mr. Wong says it wasn't that prices were too high. "People weren't asking too much, that's just the market."

Then in August of 2003, they came upon a triplex for just under $200,000, which their agent soon told them was likely the last under the $200,000 mark in the Toronto market. They put $50,000 down, the majority of the money coming from Mr. Wong's parents and the remainder from their savings.

The next step was to buy another property. About the same time, the man who had recommended the Rich Dad book to Ms. Liu suggested that if they wanted to take their business "to the next level," they should get involved in the Real Estate Investors Network, a group that offers advice and networking opportunities.

Ms. Liu said the group has helped them learn a lot. For example, one strategy they use is not to make a single offer on a property.

"We've learned to make multiple offers to give the seller a lot of options," she says. They also try to flush out "motivated" sellers, dropping off flyers, keeping in touch with agents, and also perusing the Internet for properties being sold by owners.

Their second property was a townhouse in London, Ont., that they bought for $135,000. They've rented it out to four students who each pay $425 a month. The condo fees are only $115 a month, and "because it's not very old there is little maintenance," Ms. Liu says.

Another principal they follow is to look for "equity-building tenants," meaning people who will maintain the value of the priority. In a university town, that means finding serious students, which they did -- four women studying nursing with several planning graduate studies.

Early this year, they added their third property, another townhouse in London on the market for $107,500 that they got for $98,500, after the seller had turned down their offer and then came back to them. "You have to be able to just walk away and not care," Ms. Liu says.

"You do not want to be a motivated buyer."

Best move

"So far, all our properties," Ms. Liu says.

Worst move

Before their real estate days, Ms. Liu bought into Nortel Networks Corp. (NT-TSX) at $90 a share. Whether it was her decision alone or based on advice from Mr. Wong is still a matter of discussion..

Advice

"Picture yourself in 10 years and think about where you want to be. Find something you really want and then decide how to achieve that," Ms. Liu says.

The Investors

Jedidiah Liu and Kasey Wong

Ages: Both 29

Occupations: Ex-CA and finance

Investment personality: Practical

Portfolio: One triplex in Toronto, two townhouses in London, Ont.

Portfolio size: "Six figures"

Rate of return: NA

tony.martin1@sympatico.ca

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