Believed to be a first in Malaysia ,DCS private Trust Fund is backed by properties worth RM50 mil and guarantees a dividend of 8% pa.
1st Mortgage Consistent Top Performer
First Mortgage Hotline has consistently won awards from banks for being the top-performing outsource mortgage brokers. They have been working with banks like OCBC, Hong Leong, Ambank , Manybank, RHB and Alliance Bank. “We know their criteria and can fast track your loan approvals legally within 3-6 months. We also have our own accountants and lawyers to help in the process,” Yap points out.
The company is also a mortgage consultant for developers handling buyers whose loans were rejected by banks. “For every purchaser whom we managed to get loans for, we charge the developers.”Some of their developer clients include Mah Sing Group, SYF Resources Bhd, Ireka , Guocoland and Tropicana.
The also collaborate with property and financial advisers to solve the loan issues of the latter’s clients. Consultants they partner include Dato Sri Tee, Adrian Wee and Tony Yap.
How can you get 8% p.a. dividend on a minimum of RM30,000 deposit? “It can be done and we guarantee both your capital and the dividend for as long as your money is with us,” declares First Mortgage hotline Sdn Bhd MD Kenneth Yap Kian Hoong.
The finance professional has been entrusted by a client to use properties worth Rm50 mil to set up a private trust fund for the purpose of being used as collateral. The assets will be used to back a private trust fund that’s targeting 8% p.a. dividend. In other words, if for any reason, the target dividend cannot be achieved, they will sell off some of the properties to make up the 8% dividend back to clients.
How does Yap plan to achieve the target given that the returns on sale and rental of properties are subdued during this prolonged property slump in Malaysia?
Explains Yap: “We don’t just depend on sale and rental of the properties. We use the assets as collateral to gel loans to buy more properties. And the properties v/e buy are always at 25-30 % below market value as most of them are auction properties. So, in effect, we already made money when we buy as the property is worth 30% or more in the market. We then sell these properties (after refurbishment) in the open market for a profit.”
Based on the market value of RM50 mil for the assets, the fund can in theory obtain loans of up to 80 or 90% margin, hence the entire fund can be valued at RM80 mil.
“From this amount, we can get another RM30 mil from the market. This allows us room to explore other income-generating activities such as venturing into property development,” Yap lays out the fund’s near – term goals.
En-route to listing?
The award-winning entrepreneur has recently acquired a property development company which is in the early stages of building 36 mid-priced shop lots within 500-meter radius from Senai International Airport, Johor. “Our profit margin for property development is 30 to 40%, which is more than sufficient to give a dividend of 8% to our depositors,” says Yap.
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And if the property market were to recover in the next few years, the net worth of the fund would rise correspondingly, he adds. Yap is a core partner of DCS Private Trust Funds. Response since the launch in September 2019 has been notable. It has already collected approximately RM10 mil so far with some clients depositing 20 lots in value, he reveals.
“We foresee that after 3 to 5 years, we could be big enough to go for a public listing in SGX or HKEX,” Yap shares his vision, adding, “Once we are a billion dollar company, we could even set up a bank.” As if in preparation for that ,they have also recently acquired a money -lending license in Malaysia.
There are immediate plans to buy out a property development company which has been in business for the last 13 years and which has completed more than 4 development projects. Through DCS project, Yap and his team will also be involved in more second- and third- line property development mainly in the outskirts to promote affordable housing and improve the living standards of rural folks.
Private Trust Fund’s Benefits
Yap started out doing loan processing, eventually progressing to starting his own company to process loans from borrowers on behalf of banks. His customers range from the ordinary man on the street to multimillionaires. Many of his high net worth clients refinance their properties but many complain that the refinancing amount is not sufficient.
So the enterprising young man did some research and came up with three options:
- REIT
- Crowdfunding
- Private Trust Fund
Out of the three, they decided on using private trust funds in order to generate returns. That’s how DCS Private Trust Funds got started.
“It’s the first trust fund in the market to be backed by unencumbered property with a mandate to get 8% guaranteed dividend through various activities like buying below market value or auction property and reselling them,” says Yap.
Traditionally, private trust funds are used by High Net Worth Individuals to manage their wealth, maintain control of their assets even after death, avoid the cost of probate and protect their assets from creditors and lawsuits. Private trust funds are widely used in the United States, Japan, Europe and Singapore.
Many famous families, such as the Rockefeller family and the Kennedy family, have set up family trusts to manage their wealth.
For the DCS Private Trust Fund, they have appointed Global Asset Trustee to be the fund custodian and executor. Global Asset Trustee is a registered trust company in Malaysia which has in its portfolio several private trust clients and schemes with an asset valuation of about RM 3bil.
The only caveat is that subscribers must lock in their deposit for 2 years, however, they can still exit before the 2 years is up by paying a penalty.