Sign up to save your podcasts
Or
Share #142 Why Banks Are the Most Passive Investors in Your Property
Share to email
Share to Facebook
Share to X
Share to email
Share to Facebook
Share to X
Or
#142 Why Banks Are the Most Passive Investors in Your Property
In this episode of Nuggets On The Go, Melvin Lim from PropertyLimBrothers reveals the often-overlooked mechanics behind successful real estate investment—framing the bank and the tenant as your silent co-investors. Through a detailed financial walkthrough, he illustrates how leverage, structured repayments, and tenant contributions combine to create a capital-efficient strategy that multiplies returns.
Using a hypothetical $2 million property, Melvin Lim compares fully paid versus leveraged scenarios, breaking down how $500,000 in equity, paired with bank financing and rental income, can unlock over $1.1 million in value over time. The discussion also highlights the role of cash flow, principal amortisation, and risk management in maintaining healthy property investments.
For those considering a leveraged property purchase, navigating rental yield gaps, or exploring tenant-supported ownership models, this episode offers grounded perspectives.
0:00 - Introduction: The Two Investors in Your Real Estate Journey
1:07 - Leveraged vs. Non-Leveraged Investing
1:43 - Understanding 75% LTV and TDSR
2:31 - The Core Question: Better Return on Capital - Cash vs. Leverage
3:07 - The Power of Healthy Leverage and the Multiplication Formula
3:45 - Return on Capital (ROC): Fully Paid (20%) vs. Leveraged (80%) Scenario
5:04 - Summary: Leveraging vs. Non-Leveraging Approach
5:15 - Risk Factors: Sustaining Monthly Instalments and Cash Flow
5:37 - Recap: The Four Quadrants of Real Estate Analysis
6:14 - Investor 1: The Bank (Your Co-Investor)
6:32 - The Bank's Interest: Principal, Interest, and No Share in Profit
9:14 - Investor 2: The Tenant (Your Second Co-Investor)
9:25 - The Tenant's Role: Co-Investing on a Monthly Basis
11:47 - The Owner's Rights: Paying Costs for Full Profit Ownership
12:20 - Win-Win-Win Scenario: Owner, Bank, and Tenant Benefits
12:47 - Loan Balance Reduction Example over 4 Years
13:34 - Amortisation Table Breakdown: Principal vs. Interest
14:11 - How Tenant's Rent Covers P+I and Reduces Loan Balance
15:47 - Summary: The Two Investors at Work and Their Contributions
16:36 - Property Owner's Gains: Appreciation, Principal Pay down, and Initial Capital Back
17:45 - Mental Accounting: Cash Flow vs. End-Game Unlocked Profit
19:48 - Next Step: Refunding Unlocked Capital to Fund Next Property Investment
View all episodes
By Melvin Lim
5
11 ratings
In this episode of Nuggets On The Go, Melvin Lim from PropertyLimBrothers reveals the often-overlooked mechanics behind successful real estate investment—framing the bank and the tenant as your silent co-investors. Through a detailed financial walkthrough, he illustrates how leverage, structured repayments, and tenant contributions combine to create a capital-efficient strategy that multiplies returns.
Using a hypothetical $2 million property, Melvin Lim compares fully paid versus leveraged scenarios, breaking down how $500,000 in equity, paired with bank financing and rental income, can unlock over $1.1 million in value over time. The discussion also highlights the role of cash flow, principal amortisation, and risk management in maintaining healthy property investments.
For those considering a leveraged property purchase, navigating rental yield gaps, or exploring tenant-supported ownership models, this episode offers grounded perspectives.
0:00 - Introduction: The Two Investors in Your Real Estate Journey
1:07 - Leveraged vs. Non-Leveraged Investing
1:43 - Understanding 75% LTV and TDSR
2:31 - The Core Question: Better Return on Capital - Cash vs. Leverage
3:07 - The Power of Healthy Leverage and the Multiplication Formula
3:45 - Return on Capital (ROC): Fully Paid (20%) vs. Leveraged (80%) Scenario
5:04 - Summary: Leveraging vs. Non-Leveraging Approach
5:15 - Risk Factors: Sustaining Monthly Instalments and Cash Flow
5:37 - Recap: The Four Quadrants of Real Estate Analysis
6:14 - Investor 1: The Bank (Your Co-Investor)
6:32 - The Bank's Interest: Principal, Interest, and No Share in Profit
9:14 - Investor 2: The Tenant (Your Second Co-Investor)
9:25 - The Tenant's Role: Co-Investing on a Monthly Basis
11:47 - The Owner's Rights: Paying Costs for Full Profit Ownership
12:20 - Win-Win-Win Scenario: Owner, Bank, and Tenant Benefits
12:47 - Loan Balance Reduction Example over 4 Years
13:34 - Amortisation Table Breakdown: Principal vs. Interest
14:11 - How Tenant's Rent Covers P+I and Reduces Loan Balance
15:47 - Summary: The Two Investors at Work and Their Contributions
16:36 - Property Owner's Gains: Appreciation, Principal Pay down, and Initial Capital Back
17:45 - Mental Accounting: Cash Flow vs. End-Game Unlocked Profit
19:48 - Next Step: Refunding Unlocked Capital to Fund Next Property Investment
More shows like NOTG - Nuggets on the Go by PropertyLimBrothers
View all
Economist Podcasts
4,165 Listeners
Motley Fool Money
3,217 Listeners
Rule Breaker Investing
945 Listeners
Real Vision: Finance & Investing
911 Listeners
The Diary Of A CEO with Steven Bartlett
8,494 Listeners
FT News Briefing
656 Listeners
Yah Lah But
17 Listeners
The Financial Coconut Podcast
3 Listeners
從前從前
461 Listeners
劉軒的How to人生學
420 Listeners
The Daily Ketchup
6 Listeners
Money For Couples with Ramit Sethi
3,425 Listeners
HBR On Leadership
169 Listeners
Money Talks
2 Listeners
Work It
2 Listeners