Interesting eh? Last week's column featured a guy who owned stocks but no property (for investment). This week it's a guy who owns property but no equities! Just goes to show there are so many different paths to Rome.....
But wow, he bought 2 expensive properties this year alone, so I think the leverage used must be fairly substantial. And he also seems to be a man who likes fast cars, judging from his purchase of the S$400,000 white Porsche Panamera. All in all, I think I can still relate better to last week's interviewee Mr. Brennan Pak!
Nov 28, 2010
me & my money
Entrepreneur has a finger in every pie
Property sales, event management, fish farming... Eric Cheng's into these and more
By Lorna Tan, Senior Correspondent
Former air steward turned property guru Eric Cheng earned a feather in his cap when he won the Entrepreneur of the Year Award in October.
The award, given by the Association of Small and Medium Enterprises, recognises people for their business acumen.
Mr Cheng, chief executive of real estate agency ECG Property, certainly has business acumen. He owns several businesses, mainly in property sales and development and events management.
In a recent interview with The Sunday Times, the 35-year-old recalled being passionate about being his own boss, even when he was younger, and about his love of real estate.
Besides his businesses, he owns five residential properties and is insured to the hilt.
After leaving Singapore Airlines in 2002, his employer for eight years, he ventured into property sales at PropNex and made his first million in 2004 from sales commissions and management fees. Back then, he had 1,600 agents.
In 2007, he joined property agency HSR, where he was the agency executive director looking after 5,000 agents.
Meanwhile, he began building his business empire, starting with programming and software firm SG1Stop in 2004. A year later, he set up property development firm ECG Development with $7 million, of which $3 million came from him.
In 2007, he set up SGYacht, a licensed yacht charter firm. The following year, he set up ECG Events and Lifestyle and interior design and construction firm SG Concept.
Last year, after leaving HSR, he set up ECG Property. The firm has 1,500 agents.
He also acquired a fish farm in Pasir Ris, which cost nearly $1 million. It specialises in high-value tiger garoupa and lobsters.
Last year, his ECG group pulled in an impressive $61 million. Moving forward, he is eyeing a listing of one of his firms in Kuala Lumpur soon.
Mr Cheng obtained an international diploma in computer studies from the Informatics Computer School in 1994.
His wife Lena Tang, 35, is ECG's finance director. They have two sons, Ethan, four, and Edgar, two.
His book, Get Rich Through Property Investment, which was published last year, has sold more than 10,000 copies.
This month, he launched his second book Get Rich Through Business Leadership.
Q Are you a spender or saver?
I maintain a good balance between saving and spending. I save 25 per cent to 35 per cent of my income.
Q How much do you charge to your credit cards every month?
I have two credit cards. One is for work while the other is for personal use. On average, I charge $8,000 to $12,000 to my cards. I have always paid my credit card bills on time as I believe that if you delay paying once, you will develop a habit of repeating it. I withdraw about $500 a week and whenever necessary.
Q What financial planning have you done for yourself?
Besides my businesses, I own several properties.
I have a thing for property and cars. Since my army days, I have enjoyed reading classified advertisements to keep myself updated on market trends and the prices of properties and cars.
The potential returns from property investments come from their capital appreciation or rental yield. When I buy a property, I make sure I have 12 months' worth of instalments in cash set aside as a back- up, in case the market dives and I have no rental. This means I have 12 months to re-strategise my plan for that property.
I also believe in insurance. I have almost US$5 million (S$6.5 million) in life cover. I also have a critical illness cover of US$1 million and endowment plans.
I do not own stocks as I have no time to monitor them.
Q Moneywise, what were your growing-up years like?
I am the eldest of four children and am from a middle-income family.
My father was a manager in the entertainment industry, running pubs and discos.
My mother inherited two outlets selling Nonya food but she gave up the business in 2006 when my first child was born.
We lived in a three-room Housing Board flat in Chinatown.
My parents used a reward system to encourage me to study hard. I would get a toy if I achieved good marks above 90.
Growing up, I wanted to live a more comfortable life.
Q How did you get interested in investing?
My first investment was a Housing Board executive apartment which I bought in 1998 for $350,000, before I ventured into the real estate industry.
The investment broke even - I sold it for $380,000 in 2003.
After gaining more knowledge in real estate, I invested in a two-storey, 2,800 sq ft terrace house in Telok Kurau which cost $850,000. In less than five years, the property was sold for $1.4 million in 2008.
Q What property do you own?
I have five properties.
In 2006, I bought a 3,900 sq ft terrace house in the East Coast for $690,000. It was refurbished for another $500,000 and its current value is about $2.3 million. My family and I live in it.
A year later, I bought a two-bedroom, 936 sq ft condominium unit in Orchard for $940,000. It is currently valued at $1.5 million.
I bought a 1,600 sq ft condo in the same area for $1.7 million in 2008. It is valued at $2.3 million now. The two condos are generating rental yields of 4.3 per cent and 3.9 per cent, respectively.
This year, I bought two properties. One is a single-storey semi-detached house of 4,000 sq ft in the East Coast costing $2 million. The other is a 630 sq ft condo unit in Newton that cost $800,000. Construction will be completed in 2013.
Q What's the most extravagant thing you have bought?
It would be the white Porsche Panamera that I bought for my wife's birthday last month, for almost $400,000. We're collecting it next month.
Q What's your retirement plan?
My goal is to list my firm, ensure it is sustainable profit-wise and bring it to greater heights.
I intend to fully pay for the five properties that I have and retire before 45.
Good rental yields from the properties I own would contribute an additional passive income stream to our nest egg of $5 million. I also expect yearly dividends of $2 million from my businesses.
I would like to spend quality time with my family after that.
Q Home is now....
The terrace house in the East Coast.
Q I drive....
A metallic grey BMW 7 series.
lorna@sph.com.sg
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BEST & WORST BETS
Q My worst investment to date...
I made an investment of close to $800,000 in an events management firm in 2008. It is still unprofitable and I have lost nearly all of my investment as I am a sleeping partner and have no control over the running of the firm.
Q My best investment to date...
My best assets are my family. They have supported me in my business.
My other best investment is my company, the ECG Group of Companies, of which I hold more than 70 per cent.
It was formed in 2002 with a turnover of only $3 million.
Our turnover was $61 million as of end-December last year. My investments in the businesses have paid off handsomely.
We are now getting takeover and acquisition offers and I am in the midst of exploring options which may include listing one of the businesses on the Malaysian stock exchange.
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