Buying+developing 1rai On Koh Samui (1st Time..)

[ski]

I am looking to get started investing on Koh Samui. I know little about it but don't mind putting in the time to learn more and don't want to make any moves before I am ready.

I am looking into buying and developing 1-2rai near Tesco lotus and was hoping this forum could critique my logic and rough plan...

Each Rai is ~$4M-4.5M baht

This land is in a prime place in my opinion. within 5 min of tesco lotus. It is right by where I live and most people I've talked to agree that it is the best place to live on Samui. It is on a hill and can see the ocean+a lot of the island. The hill is just starting to be developed. I took a motorbike out there and there are still some dirt roads and only a few (very nice) houses there so far.

I'd be buying the property directly from the owner (not a property agency) the owner is a Thai guy that is friends with my gf's landlord.

The guy already has it listed through a land agency but the agency has not sold it and the guy still says he has the right to sell it (potential scam but I check with few lawyers). The price the agency has up is like 5mil baht/rai. I can get from the guy for ~4-4.5/rai from what my gf (who used to work in a real estate place) tells me.

I can get the land for 20% down + 80% within ~6months directly from the owner

I Checked real estate listings for completed houses in the area. I found about 3-4 lots that are ~2/7ths of a Rai w/finished houses are listed for 10mil-11mil baht.

2. Lets say I can only build 3 houses (construction costs = ~2.5-3mil per house for nice 3 bed room, right?)

3. So spending a total of ~12M I can sell for ~30M.

Minus legal fees+real estate agent fees I figure I can make 14-15M baht over the course of the few years. IF THE MARKET STAYS THE SAME...

Do these figures seem reasonable to you guys who have experience?

[Gary A]

Well ski, if you have that kind of money why would you want to invest it in property that you can't own? It sounds like a bad dream to me. Invest the money in your home country wisely and you can live in Thailand the rest of your life or until Thailand becomes the next Burma and tells you to leave.

[Mid]

Well ski, if you have that kind of money why would you want to invest it in property that you can't own? It sounds like a bad dream to me. Invest the money in your home country wisely and you can live in Thailand the rest of your life or until Thailand becomes the next Burma and tells you to leave.

said it all ..................

[churchill]

Well ski, if you have that kind of money why would you want to invest it in property that you can't own? It sounds like a bad dream to me. Invest the money in your home country wisely and you can live in Thailand the rest of your life or until Thailand becomes the next Burma and tells you to leave.

He doesn't want to own it I think he wants develop and sell - Although the land costs look too high and building costs look too low !

I am not sure that the money he is talking about would buy much of a property in Europe and as he is living in Samui it may be better to be close to his investment .

[RAZZELL]

Does he really own the land?

Are the landpapers fake?

Is it govt forest, navy, army, "coconut" land etc?

Does the slope prevent you from building? (I might be wrong, but isn't there some sort of "bye-law" in Samui about the % slope of the land and the right to build?)

If it works, great plan...But I'd rather do it in my home country

RAZZ

Edited March 7, 2007 by RAZZELL

[churchill]

Check the land title - If it is Chanode you should be ok - But also check with that your architect and the tesse bahn that you can get a building permit . There are quite a few regulations about density of building , heights and styles .

[johnnyk]

Samui has been the focus of intense government scrutiny.

There are ongoing investigations of: fraud, bribery of local officials, land encroachment and theft of both state and private property, money laundering, intimidation and on and on.

I'd be buying the property directly from the owner (not a property agency) the owner is a Thai guy that is friends with my gf's landlord.

This sounds like a very solid connection. I'm sure he is a very nice guy, but up to you.

Edited March 7, 2007 by johnnyk

[chownah]

My view is that anyone who wants to undertake a 30 million baht development in Thailand should be knowledgeable enough about this kind of undertaking to not have to come to this forum for advice.....if you think about it just how reliable is the information your going to get here? Of course if you just like to talk about lots of money because its fun to do so then this is the ideal place to come to discuss your idea....

Have fun discussing = yes!

Get reliable information to help in making a business deal = no!

Chownah