Mine is a  unique deal- which has 2 parts

 

Part 1 when  am alive i.e as  simple return on capital investment

Part 2 when I am not alive-i.e regular condo leasing out investment

 

Perhaps a good idea to write  into any contract that the condo must be maintained to the  current standard

Then include 3 monthly  inspection visits

 

With your suggestion it would be impossible for me(or my wife ) to get the money back.

In effect I would be selling the condo for a lower price -not acceptable.

 

I might be interested to buy  if the seller pays 10 years rent upfront.So that i have secured a long term tenant!

1 hour ago, Destiny1990 said:

I might be interested to buy  if the seller pays 10 years rent upfront.So that i have secured a long term tenant!

 

Give him some discount .....

 Mistake

7 hours ago, Destiny1990 said:

I might be interested to buy  if the seller pays 10 years rent upfront.So that i have secured a long term tenant!

Yup! This deal is only as good if there is a secured rental return.

 

If the seller/turn renter lives say 15 yrs he pays 2.7M in rent Plus fees and maintenance. So why would he sell now for 3M?

I don't see things the same way, a 6% yield guaranteed for x months along with a capital guarantee, point me at somewhere else in the investment markets where that is available, regardless of the duration of the yield.

9 hours ago, inThailand said:

Yup! This deal is only as good if there is a secured rental return.

 

If the seller/turn renter lives say 15 yrs he pays 2.7M in rent Plus fees and maintenance. So why would he sell now for 3M?

 There are no pockets in shrouds

A good deal in Western world. Thailand forget anything unless it is hard cash and definate ownership Maybe some mug will take  you up on it. Too many ifs buts and chances for a disaster, thats Thailand all over 

On 2/25/2018 at 5:31 PM, Delight said:

My wife does not want the condo.

Too much hassle beyond my death.

With this deal a minimum 2M Baht from the sale will end up with my wife.

What about transferring ownership of condo to your wife now and possibly mortgage the condo?

 

Main downside is that you potentially lose the foreign name ownership, which could make it harder to sell once you are no longer with her.

 

The way I see your offer is as a 3 million baht loan at 6% with your condo as security, no installments paid (only interests), and an intention to default on the loan (leaving the creditor with the condo).

 

Generally creditors would not issue a loan at 100% of the current market value of the condo because when you default, it’ll be a liability until it is sold, and it might not be possible to sell at full value, plus you have the overhead (agent fee, transfer tax, etc.).

 

That said, I have been tempted by your offer, as I would like to have a reliable income stream in THB, but the condo is too far from where I am staying (Chiang Mai), and the potential income stream is also too small (to cover my regular expenses here).

Its also a good way to not leave the wife anything if you've fallen out

On 2/27/2018 at 5:58 AM, inThailand said:

Yup! This deal is only as good if there is a secured rental return.

 

If the seller/turn renter lives say 15 yrs he pays 2.7M in rent Plus fees and maintenance. So why would he sell now for 3M?

Because he aint staying that long.

1 minute ago, Destiny1990 said:

Because he aint staying that long.

You mean as a renter? Or amongst the living?

2 minutes ago, inThailand said:

You mean as a renter? Or amongst the living?

How can i know his life span?

but as a tenant i dont see him staying long probably he only says so in order to make his unit more attractive to sell.

There is nothing guaranteed about intend to rent back. 

 

How could anyone think this is a good deal ? Condos are ten to the penny in Pattaya . What happens if you buy it then he pays 6 months up front then leaves ? That’s way cheaper then the 5% he would pay a realtor ?? there is one born every minute ! 

3 minutes ago, chrisandsu said:

How could anyone think this is a good deal ? Condos are ten to the penny in Pattaya . What happens if you buy it then he pays 6 months up front then leaves ? That’s way cheaper then the 5% he would pay a realtor ?? there is one born every minute ! 

What would be the difference to any other condo that you buy?

3 minutes ago, jackdd said:

What would be the difference to any other condo that you buy?

The difference will be trying to find another renter that will give you that 6% yield , who will pay for all maintenance and upkeep of the property . Effectively meaning you will end up with a condo you can’t sell or make a profit out of .

Just now, chrisandsu said:

The difference will be trying to find another renter that will give you that 6% yield , who will pay for all maintenance and upkeep of the property . Effectively meaning you will end up with a condo you can’t sell or make a profit out of .

This is the same with every other condo? if you expect 6% yield that's not easy to find. And why will you end up with a condo that you can't sell or make a profit out of? So again: What do you think is the difference if you buy this condo, or any other condo?

If you buy this condo here you probably have a renter who gives you 6% yield. If he makes a runner this condo is as good as any other condo (if the 3 million is the correct market value)

1 minute ago, jackdd said:

This is the same with every other condo? if you expect 6% yield that's not easy to find. And why will you end up with a condo that you can't sell or make a profit out of? So again: What do you think is the difference if you buy this condo, or any other condo?

If you buy this condo here you probably have a renter who gives you 6% yield. If he makes a runner this condo is as good as any other condo (if the 3 million is the correct market value)

So you answered your own question . Who on earth would buy it ? 

4 minutes ago, chrisandsu said:

So you answered your own question . Who on earth would buy it ? 

Somebody who wants to invest 3 million THB longterm, quite easy.

You can buy a condo that has a renter already and you don't have to find one (of course he could make a runner, so not 100% sure)

Or you can buy one without a renter and have to find one first.

1 minute ago, jackdd said:

Somebody who wants to invest 3 million THB longterm, quite easy.

Easy ?? Come on now ! How long term is it until you get your money back ? There is nothing easy about being a landlord in Thailand to earn shirt buttons . 

1 minute ago, chrisandsu said:

Easy ?? Come on now ! How long term is it until you get your money back ? There is nothing easy about being a landlord in Thailand to earn shirt buttons . 

I mean "quite easy" as to who would buy it, not that being a landlord is easy in Thailand (i wouldn't want to be either)

As one already said, pay 10 years in advance and you may get some buyers. He said he staying for life, so why is this a problem? A clause can even be added if he dies before 10 years, prorate the unused rent and return it to his estate.

 

If he's serious this is a fair deal.

I am still a bit confused at this deal.

 

If we were talking a highly liquid asset, like a gold brick, that I could easily sell, then getting 6% seems like a pretty reasonable return. Gold may go up, it may go down, but on average, all other things being equal, getting 6% would be good in today's economy and I can exit whenever I want. I bet you get a lot of takers for something like this.

 

Contrast this with the OP's offer. It seems to me he is offer the same deal, but with a Pattaya condo which is highly illiquid, and which will cost at least 4% to get rid of if you can even find a buyer. Include realtor's fees in there, and you are probably looking at greater than 10% in disposal costs.  In fact, the only way this is even remotely justifiable is if you assume the condo price will increase, but that is highly dubious in today's climate.

 

I think if the OP is serious he needs to pay all transfer fees for the purchase now and also discount the sale amount by about 15% to cover the costs of selling the condo to recover the investment when the new buyer eventually sells. Otherwise, unless 3 million is already way below market price, I am not sure how the deal is sensible. There is currently way too much risk in the Pattaya condo market to do something like this in my opinion.

 

Of course, I don't think much of the real estate market at all right now, so my expectations may be biased. Someone that actually wanted to invest in a condo may be able to find a way to justify this. But as a purely financial play, it seems very sketchy.

 

4 minutes ago, Monomial said:

unless 3 million is already way below market price

Not familiar with the Pattaya condo market per se, but another condo in the building (same size) is listed for 3.7 million and the sq. m. price on Hipflat has not been down to the ~40k/sq. m. that the OP is asking, so it does seem that he is discounting it, at least compared to list prices.

 

I remember a story about a French lawyer, he basically thought he was conning,

this old lady,she was 83 ,he said he would buy her house,(at a good discount)

and she could live in it rent free ,until she died.......he was obviously thinking sooner

than later, well she lived till 104, and he died 4 years before she did !

regards worgeordie

On 27/02/2018 at 5:01 AM, simoh1490 said:

I don't see things the same way, a 6% yield guaranteed for x months along with a capital guarantee, point me at somewhere else in the investment markets where that is available, regardless of the duration of the yield.

 

I fail to see where in the OP there is any rent guarantee beyond the first 6 months, and the capital guarantee I completely fail to see .

 

This is the same deal as the new condos that guarantee you a rental return for the first 3 years, while in fact they have added that sum already to the purchase price.

 

The reason the OP is offering this deal, without any guarantees beyond 6 months, is that he found out already that his condo can't find a buyer at the prices quoted for other units in the same building.

6 minutes ago, janclaes47 said:

 

I fail to see where in the OP there is any rent guarantee beyond the first 6 months, and the capital guarantee I completely fail to see .

 

This is the same deal as the new condos that guarantee you a rental return for the first 3 years, while in fact they have added that sum already to the purchase price.

 

The reason the OP is offering this deal, without any guarantees beyond 6 months, is that he found out already that his condo can't find a buyer at the prices quoted for other units in the same building.

The presumption on the capital guarantee is that 3 mil. is a fair market value today and that's something a would be buyer would need to assure themself of.

 

As for the rent guarantee period - sometimes in life you just have to take people on face value, other times you have to stick your neck out and take a gamble. 

6 hours ago, simoh1490 said:

The presumption on the capital guarantee is that 3 mil. is a fair market value today and that's something a would be buyer would need to assure themself of.

 

As for the rent guarantee period - sometimes in life you just have to take people on face value, other times you have to stick your neck out and take a gamble. 

Go ahead and buy it and let us know how much vaseline you used!

2 hours ago, inThailand said:

Go ahead and buy it and let us know how much vaseline you used!

My problem with the deal is that ultimately I would end up with property in Pattaya and that's not something that interests me, otherwise I just might.

The only reason to do this is someone needs the money towards the end of their life. Must be 100s of people in the same position. A smart lawyer businessman could offer this service, set up a standard contract, but probably too sleepy to do it