Advice And Feedback On Real Estate Opportunity

[SiamOrchids]

I know that there are many successful intelligent members of Thaivisa and we're looking for ON TOPIC feedback, comments and advice. We are not looking for information about Thai Law, that's what lawyers are for. We've already done the appropriate research on ownership, etc. So please limit your comments to the topic.

We have entered into a 30 year lease with a 30 year option to develop a piece of property in Ban Mai, right on the River, about 20 kms from Kanchanaburi Muang. The rent is 20,000 baht per month, with a 5% increase every 10 years. The actual space is about one rai, but all river frontage.

We live up here and we have a business here so we know the pros and cons of the idea, as far as the location's relationship to the Kanchanaburi Tourist sites, the traffic pattern from Bangkok, the competition, etc, etc.

Our intention is to build a small exclusive hotel. By small, I mean 30 to 60 rooms, depending on the results of the survey and engineering report. There are no "good" hotels in a 25 km radius. The Felix is the best in the area but if you have a Platinum Amex card, you know the Felix is "adequate". We want to build about 4 or 5 steps above adequate.

We have local connections so we're getting actual rights to the riverfront and the Orbator is going to sign off on a Master Plan for the site which shows the buildings, boat docks and possibly a floating restaurant and sand beach.

We just completed construction of a nursery, (we're brokers, exporters and growers of plants and orchids for the past 35 years) and we're in the process of building our home. We're lucky, the nursery builder was a dishonest disaster of a contractor, but since I knew more than he did, we didn't get screwed too badly and we were able to find a really good builder for our house and that project is a pleasure. It's going along quickly and efficiently and so far, way under budget. My wifes uncle is a C-11 Engineer for Egat, in charge of one of the provinces and he is acting as a construction manager for our project as well. He comes up once a week, looks around, busts their balls, and leaves. Any questions, when he's not here, we call and get an immediate answer. So, so far so good.

We're pretty confident as to this next project. I've done some RE development in the US and this is not foreign to me.

My questions are very simple:

If we want to sell the approved deal to the eventual operator, in other words, we develop it and presell the completed project, what's it worth ? Do we assume an ROI from a proforma and work backwards ?

Do we look for investors ? It's about a 1 million US$ project. That is too small for the big boys. But perfect for about 3 or 4 individuals with deep pockets.

We do not want to own the project or run it. We put the package together, we want to develop it and then we want to turn it over to a management group that is responsible for the day to day operations.

I'm thinking that upcountry Thailand can handle a small chain of US/EU quality hotels. I've travelled around the country and most hotels outside of the big cities are not even close to those standards. There are a few secondary cities in Thailand that will support 30 or 40 rooms with a pretty high occupancy rate thanks to the Internet, ie: marketing, reservations, deposits, website etc. Do we try to obtain funding for the eventual development of a small chain of 3.5 - 4 star hotels catering to semi-affluent travelers?

Comments, advice, feedback please.

I'm sure there are some people out there involved with Real Estate, Hotel Management, Finance, etc. No consultants, please. Unless you have a tremendous track record and will take equity in lieu of any fee. PM's are welcome.

Thanks

[billaaa777]

I am a CPA whom happens to specialize in business plans for the purpose of raising capital. I am also a successful real estate investor in Pattaya presently. You really don’t supply enough information to give a detailed answer. But, I will try to answer some of your questions very quickly.

In the US or Europe if you were entering into an agreement with say “Holiday Inn” to run your hotel there would be extensive research done before starting the project. Some of this would include traffic counts of potential customers, growth of the area, competition comparisons, determining what your market is, etc. It does not seem you have done this market research required to ensure the success of the project.

So what’s it worth, it is worth nothing now. Just an idea from your personal observations of the market, which if you’re an astute businessman are often the important factors in business development. But, for an investor they would need to see the research, business plan, marketing plan and financials.

What is worth in the future will be determined by what you’re making or what you will be making in the future. All you have now is an idea and from your post it does not seem you have the capital or knowledge in the industry to carry out the idea. If you are truly sincere in building this business you are going to need to hire professional market researchers that are experienced in the hotel industry and conduct the necessary feasibility study to determine in you concept has validly.

If their response is positive the next step is to develop a comprehensive business plan. Then and only then if you have the capital to build the project yourself can you approach selective hotel chains and ask them about some type of management agreement if you were to build the project. You would enter into those meetings looking professional and would be well received as somebody that has done their homework, regardless of their decision.

If you don’t have the funds to build the project the next step would be to contact venture capital groups and show them the information you have collected and attempt to gain their interest.

Sorry if that was not what you wanted to hear, but the fact of the matter right now you have nothing but an idea. It might be a very good one, but you will need to do quite a bit of work and research to accomplish your goal. Good Luck!

[torrenova]

Let me come at this from someone who runs small businesses in and around Pattaya.

I see many many people each year who make this trip. Most do so on day trips as that is how most agents portray the place. They do not sell the location, they sell the "River Kwai" experience. So from that side, I think you have to get involved in the marketing before you plough on with construction. You cannot operate on a "if we build it, they will come" principle.

I note your comments about Amex Platinum. Perhaps you should speak to Amex Centurian. Have you worked out what the market will bear for short stays ? Will they stay longer, perhaps a week ? Is there sufficient infrastructure in the locality ?

Have you asked yourselves the question why no upmarket developer or management company has developed the idea with a boutique hotel, spa etc. ?

I like the idea but I don't get your reasons for doing it. If it is to make money, then secure the rights, cost the construction and sell the idea at that stage with minimal risk or at least bring in professional partners who know the hotel business.

Notwithstanding the other business plans and maths crunching which we could get into here, tell me how much you want to charge, what percentage occupancy you envisage projected down 5 years and when do you anticipate breakeven point ?

Hope you stick with the replies and post some additional information.

[SiamOrchids]

I am a CPA whom happens to specialize in business plans for the purpose of raising capital. I am also a successful real estate investor in Pattaya presently. You really don’t supply enough information to give a detailed answer. But, I will try to answer some of your questions very quickly.

In the US or Europe if you were entering into an agreement with say “Holiday Inn” to run your hotel there would be extensive research done before starting the project. Some of this would include traffic counts of potential customers, growth of the area, competition comparisons, determining what your market is, etc. It does not seem you have done this market research required to ensure the success of the project.

So what’s it worth, it is worth nothing now. Just an idea from your personal observations of the market, which if you’re an astute businessman are often the important factors in business development. But, for an investor they would need to see the research, business plan, marketing plan and financials.

What is worth in the future will be determined by what you’re making or what you will be making in the future. All you have now is an idea and from your post it does not seem you have the capital or knowledge in the industry to carry out the idea. If you are truly sincere in building this business you are going to need to hire professional market researchers that are experienced in the hotel industry and conduct the necessary feasibility study to determine in you concept has validly.

If their response is positive the next step is to develop a comprehensive business plan. Then and only then if you have the capital to build the project yourself can you approach selective hotel chains and ask them about some type of management agreement if you were to build the project. You would enter into those meetings looking professional and would be well received as somebody that has done their homework, regardless of their decision.

If you don’t have the funds to build the project the next step would be to contact venture capital groups and show them the information you have collected and attempt to gain their interest.

Sorry if that was not what you wanted to hear, but the fact of the matter right now you have nothing but an idea. It might be a very good one, but you will need to do quite a bit of work and research to accomplish your goal. Good Luck!

Pretty condescending non-response. Not worth my time.

When I sold my business in the US for $8,000,000 I didn't go to the closing "looking professional". I wore jeans and a clean shirt.

Keep writing business plans.

[qualtrough]

I am a CPA whom happens to specialize in business plans for the purpose of raising capital. I am also a successful real estate investor in Pattaya presently. You really don’t supply enough information to give a detailed answer. But, I will try to answer some of your questions very quickly.

In the US or Europe if you were entering into an agreement with say “Holiday Inn” to run your hotel there would be extensive research done before starting the project. Some of this would include traffic counts of potential customers, growth of the area, competition comparisons, determining what your market is, etc. It does not seem you have done this market research required to ensure the success of the project.

So what’s it worth, it is worth nothing now. Just an idea from your personal observations of the market, which if you’re an astute businessman are often the important factors in business development. But, for an investor they would need to see the research, business plan, marketing plan and financials.

What is worth in the future will be determined by what you’re making or what you will be making in the future. All you have now is an idea and from your post it does not seem you have the capital or knowledge in the industry to carry out the idea. If you are truly sincere in building this business you are going to need to hire professional market researchers that are experienced in the hotel industry and conduct the necessary feasibility study to determine in you concept has validly.

If their response is positive the next step is to develop a comprehensive business plan. Then and only then if you have the capital to build the project yourself can you approach selective hotel chains and ask them about some type of management agreement if you were to build the project. You would enter into those meetings looking professional and would be well received as somebody that has done their homework, regardless of their decision.

If you don’t have the funds to build the project the next step would be to contact venture capital groups and show them the information you have collected and attempt to gain their interest.

Sorry if that was not what you wanted to hear, but the fact of the matter right now you have nothing but an idea. It might be a very good one, but you will need to do quite a bit of work and research to accomplish your goal. Good Luck!

Pretty condescending non-response. Not worth my time.

When I sold my business in the US for $8,000,000 I didn't go to the closing "looking professional". I wore jeans and a clean shirt.

Keep writing business plans.

Wow, just wow! Someone takes the time to write a thoughtful reply that contains information that is not what you want to hear and you dismiss it as condescending and 'not worth my time'. You seem to know the answers to the questions you posed already, so why did you post in the first place? Do you want someone to rubber stamp your ideas, and if they don't do that you are not interested? Sounds to me like the answer hit pretty close to the bone.

By the way, when the person who wrote this reply wrote that 'You would enter into those meetings looking professional' he clearly wasn't referring to the way you would be dressed. He means you would enter the meeting looking professional because you did your homework. Nothing at all to do with whether or not you wore a suit or jeans and a clean shirt. If you don't understand that I wonder if you even understood the rest of the post?

[lannarebirth]

I am a CPA whom happens to specialize in business plans for the purpose of raising capital. I am also a successful real estate investor in Pattaya presently. You really don't supply enough information to give a detailed answer. But, I will try to answer some of your questions very quickly.

In the US or Europe if you were entering into an agreement with say "Holiday Inn" to run your hotel there would be extensive research done before starting the project. Some of this would include traffic counts of potential customers, growth of the area, competition comparisons, determining what your market is, etc. It does not seem you have done this market research required to ensure the success of the project.

So what's it worth, it is worth nothing now. Just an idea from your personal observations of the market, which if you're an astute businessman are often the important factors in business development. But, for an investor they would need to see the research, business plan, marketing plan and financials.

What is worth in the future will be determined by what you're making or what you will be making in the future. All you have now is an idea and from your post it does not seem you have the capital or knowledge in the industry to carry out the idea. If you are truly sincere in building this business you are going to need to hire professional market researchers that are experienced in the hotel industry and conduct the necessary feasibility study to determine in you concept has validly.

If their response is positive the next step is to develop a comprehensive business plan. Then and only then if you have the capital to build the project yourself can you approach selective hotel chains and ask them about some type of management agreement if you were to build the project. You would enter into those meetings looking professional and would be well received as somebody that has done their homework, regardless of their decision.

If you don't have the funds to build the project the next step would be to contact venture capital groups and show them the information you have collected and attempt to gain their interest.

Sorry if that was not what you wanted to hear, but the fact of the matter right now you have nothing but an idea. It might be a very good one, but you will need to do quite a bit of work and research to accomplish your goal. Good Luck!

Pretty condescending non-response. Not worth my time.

When I sold my business in the US for $8,000,000 I didn't go to the closing "looking professional". I wore jeans and a clean shirt.

Keep writing business plans.

I think you've received 2 very good replies given the limited information you offered. A "thank you", together with more details might have been a better response from you. The only thing I noted in your post is that your room density seemed very high for only one rai of land. As far as "looking professional", that requirement varies by whether or not you're the one that wants something, or you're the one that has something someone else wants.

edit: PS: I ownwd a couple of mobile home parks in the states. I must have looked at over 500 prospectus' before buying thiose two. The sifting was made easier by all the prospectus' that used "pro forma" projections. Those went automatically in the trash.

Edited May 6, 2007 by lannarebirth

[SiamOrchids]

Let me come at this from someone who runs small businesses in and around Pattaya.

That's the type of response that I can respect. From someone who is in business, not some guy pushing a mouse over business plan software who thinks he's Donald Trump because he flipped a condo or two in a strong market.

I see many many people each year who make this trip. Most do so on day trips as that is how most agents portray the place. They do not sell the location, they sell the "River Kwai" experience. So from that side, I think you have to get involved in the marketing before you plough on with construction. You cannot operate on a "if we build it, they will come" principle.

After I sold my business and moved here in 1994, I got involved with an idea that eventually became a "dot com". I raised about 2 million in VC money and I was the CEO until I sold that business to an investment group in Singapore a few months before the bubble burst. The reason that I'm saying this is because marketing today is a piece of cake. There is so much that can be done via the Internet, especially in a business like travel.

I note your comments about Amex Platinum. Perhaps you should speak to Amex Centurian. Have you worked out what the market will bear for short stays ? Will they stay longer, perhaps a week ? Is there sufficient infrastructure in the locality ?

Not much going on there. I see it as a one or two night stay.

Have you asked yourselves the question why no upmarket developer or management company has developed the idea with a boutique hotel, spa etc. ?

The Kanchanaburi Muang near the river and bridge is loaded with hotels, none very good. I know, I've stayed at what they consider to be the best. But 30 or 60 rooms is a different animal, with a different market than a 300 room hotel on 50 rai. There are some new ones going up and there are also a couple for sale. The ones that are for sale are priced very high because of the land involved but that also precludes foreigners from buying them. This project, on land leased for 60 years makes it do-able for a foreigner.

I like the idea but I don't get your reasons for doing it. If it is to make money, then secure the rights, cost the construction and sell the idea at that stage with minimal risk or at least bring in professional partners who know the hotel business.

The lease is signed, the engineer is creating the site plan and when it's done (next week) we will submit it to the orbitor to sign off. At that point the project is going up for sale. That's my original question, what's it worth ?

Notwithstanding the other business plans and maths crunching which we could get into here, tell me how much you want to charge, what percentage occupancy you envisage projected down 5 years and when do you anticipate breakeven point ?

I've already done the business plan and had it critiqued by a friend in America who does financing deals in the hundreds of millions of dollars, I've also done all of the spreadsheets and actually I'm just waiting now for the final room count so I can fine tune all of the numbers. By the way, I used $100 per night and a 50% occupancy rate for my calculations.

Hope you stick with the replies and post some additional information.

Again, thanks for your post. You showed me that I am on the right track.

[SiamOrchids]

Wow, just wow! Someone takes the time to write a thoughtful reply that contains information that is not what you want to hear and you dismiss it as condescending and 'not worth my time'. You seem to know the answers to the questions you posed already, so why did you post in the first place? Do you want someone to rubber stamp your ideas, and if they don't do that you are not interested? Sounds to me like the answer hit pretty close to the bone.

By the way, when the person who wrote this reply wrote that 'You would enter into those meetings looking professional' he clearly wasn't referring to the way you would be dressed. He means you would enter the meeting looking professional because you did your homework. Nothing at all to do with whether or not you wore a suit or jeans and a clean shirt. If you don't understand that I wonder if you even understood the rest of the post?

If I was out of line, I apologize. But I still think the whole direction of that response was condescending. I happen to be an astute businessman and I've done 2 years of research into this project. I've got a signed 60 year lease with favorable terms, a site plan in process and once the site plan is complete, an approval from the orbator, I'm just trying to see what it's worth if I want to sell that package.

A 30 room or 60 room hotel is not a "Holiday Inn" or Ramada type of project. It's too small. This is a good retirement business for someone to run or a passive investor.

I asked a couple of simple questions:

If we want to sell the approved deal to the eventual operator, in other words, we develop it and presell the completed project, what's it worth ? Do we assume an ROI from a proforma and work backwards ?

Do we look for investors ? It's about a 1 million US$ project. That is too small for the big boys. But perfect for about 3 or 4 individuals with deep pockets.

Edited May 6, 2007 by samran
because sometimes even astute businessmen who have sold their businesses for $8m wearing jeans need help with the quote function

[LoveDaBlues]

I think you'll need actual figures from at least 1 year of operation before anyone would touch this. It's difficult selling a business in Thailand based on projections. Perhaps I'm wrong on this count......anyone else?

[solo siam]

Wow, just wow! Someone takes the time to write a thoughtful reply that contains information that is not what you want to hear and you dismiss it as condescending and 'not worth my time'. You seem to know the answers to the questions you posed already, so why did you post in the first place? Do you want someone to rubber stamp your ideas, and if they don't do that you are not interested? Sounds to me like the answer hit pretty close to the bone.

By the way, when the person who wrote this reply wrote that 'You would enter into those meetings looking professional' he clearly wasn't referring to the way you would be dressed. He means you would enter the meeting looking professional because you did your homework. Nothing at all to do with whether or not you wore a suit or jeans and a clean shirt. If you don't understand that I wonder if you even understood the rest of the post?

If I was out of line, I apologize. But I still think the whole direction of that response was condescending. I happen to be an astute businessman and I've done 2 years of research into this project. I've got a signed 60 year lease with favorable terms, a site plan in process and once the site plan is complete, an approval from the orbator, I'm just trying to see what it's worth if I want to sell that package.

A 30 room or 60 room hotel is not a "Holiday Inn" or Ramada type of project. It's too small. This is a good retirement business for someone to run or a passive investor.

I asked a couple of simple questions:

If we want to sell the approved deal to the eventual operator, in other words, we develop it and presell the completed project, what's it worth ? Do we assume an ROI from a proforma and work backwards ?

Do we look for investors ? It's about a 1 million US$ project. That is too small for the big boys. But perfect for about 3 or 4 individuals with deep pockets.

How have you got a 60 year lease? I thought a 30 year lease was the maximum allowed by law.

$100 US a night is VERY expensive for a hotel in Thailand, especially out in the sticks and when you are allocating less than 15-20,000 US$ per room for building/fitout.

[LoveDaBlues]

Wow, just wow! Someone takes the time to write a thoughtful reply that contains information that is not what you want to hear and you dismiss it as condescending and 'not worth my time'. You seem to know the answers to the questions you posed already, so why did you post in the first place? Do you want someone to rubber stamp your ideas, and if they don't do that you are not interested? Sounds to me like the answer hit pretty close to the bone.

By the way, when the person who wrote this reply wrote that 'You would enter into those meetings looking professional' he clearly wasn't referring to the way you would be dressed. He means you would enter the meeting looking professional because you did your homework. Nothing at all to do with whether or not you wore a suit or jeans and a clean shirt. If you don't understand that I wonder if you even understood the rest of the post?

If I was out of line, I apologize. But I still think the whole direction of that response was condescending. I happen to be an astute businessman and I've done 2 years of research into this project. I've got a signed 60 year lease with favorable terms, a site plan in process and once the site plan is complete, an approval from the orbator, I'm just trying to see what it's worth if I want to sell that package.

A 30 room or 60 room hotel is not a "Holiday Inn" or Ramada type of project. It's too small. This is a good retirement business for someone to run or a passive investor.

I asked a couple of simple questions:

If we want to sell the approved deal to the eventual operator, in other words, we develop it and presell the completed project, what's it worth ? Do we assume an ROI from a proforma and work backwards ?

Do we look for investors ? It's about a 1 million US$ project. That is too small for the big boys. But perfect for about 3 or 4 individuals with deep pockets.

How have you got a 60 year lease? I thought a 30 year lease was the maximum allowed by law.

$100 US a night is VERY expensive for a hotel in Thailand, especially out in the sticks and when you are allocating less than 15-20,000 US$ per room for building/fitout.

After reading the law myself and talking with a lawyer I believe the 30+30 lease to be allowed by law. My lawyer told me if the complete terms of the 30 year option are stated then the lessee has the option for an additional 30. Also, why would the 30 year option even be mentioned in the lease law if it weren't allowed?

As far as the $100 USD a night I agree completely.......expensive for the location.

[Naam]

I've got a signed 60 year lease with favorable terms...

= a small flaw in your projections as to the best of my knowledge no land office has ever entered a 60 year lease on a chanote.

[SiamOrchids]

30 and 30 is allowed. BUT you can only register 30 years at a time at the Land Office. Then you re-register again at the time of renewal and we had the owners heirs sign the lease now to avoid any problems later.

I figured 1 mill based on 30 rooms: 33,000 per room, the 60 number came up later because we found that we may be able to recover some property that the owner gave to the Orbator for drainage. Actually, I'm much more inclined to keep it at the original 30 rooms right on the river.

I don't feel that $100 per night is very high. It is on the high end for the middle of nowhere, I agree. But If a visitor is staying at a 5 star hotel in Bangkok, paying $200 to $2000 per night which many people do, then $100 a night for a good quality boutique hotel is not a bad price. Also, the affluent traveller that I'm looking for is not going to visit Kan because they are NOT going to spend 6-8 hours on a bus travelling and sightseeing, so maybe, if they can come up, look around, stay in a nice place and then go back to BKK the next day, it may increase the visitors to Kan.

Listen, I don't know. I'm the first to admit that I'm not in the hotel or travel business but as I think about it, it makes sense. A good hotel in Kan may bring people up to visit that wouldn't come up here, otherwise.

[LoveDaBlues]

I've got a signed 60 year lease with favorable terms...

= a small flaw in your projections as to the best of my knowledge no land office has ever entered a 60 year lease on a chanote.

I think he mean's he's got a 30 + 30 option which is what I have. This is not what he wrote I know but the end result is the same.

[blizzard]

why not put a mini mart with a gas station there. we did the numbers..... profit $35 a day , only $400,000 initial investment rerquired

you want investors give wolfman jack and da blues a ring.

Edited May 6, 2007 by blizzard

[blizzard]

seriously though this project is too small for individuals with deep pockets. people who need investors for a $1 million project are usually flaky.

you sold a business for $8 million in usa. where is that money. investors want your money at risk right alongside theirs.

you got to lub guys who want to invest other peoples money . and one where he bases things on what may happen. maybe well to do travelers stay here at 100$ a night.

Edited May 6, 2007 by blizzard

[Abrak]

A 30 room hotel, average occupancy 50%, spread over 60 years, US$100 room rate rising with inflation should give you an NPV of over US$2m. If the hotel could be built for US$1m and the room rate achieved it should be an attractive investment.

However (1) I do not think you can build a decent - say 4 star - 30 bedroom hotel for US$1m (I would estimate closer to US$100,000 per room) (2) 1 Rai is an awfully small plot on which to build a boutique hotel (3) management groups are not typically interested in running small hotels as they are notoriously difficult to make money off.

[meom]

I asked a couple of simple questions:

If we want to sell the approved deal to the eventual operator, in other words, we develop it and presell the completed project, what's it worth ? Do we assume an ROI from a proforma and work backwards ?

Nobody knows what it's worth. It depends the ROI a potential buyer is looking for and expected profits.

At 10% ROI you're looking at a capitalization rate of about 7. Multiply that times the expected annual profits and you got your value I suppose.

50% occupancy at 100 a night for 30 rooms works out to 547500 a year. Assuming all costs will paid for by selling food & drinks total value of your business would be 3-4 million.

I think you'll have a hard time flipping it over for this amount though.

[torrenova]

Siam Orchids,

Thanks for taking the time to read throu my reply and add your comments.

OK, at USD 100 you're now looking at Bt3400 whereas 2 years ago you'd have got Bt4300. Quite a difference when you're paying the vast majority of your bills in THB.

When I worked in the "real world", I vacationed in 5* and boutique hotels ranging from La Residencia in Mallorca, to the Shangri-La in Bangkok, the Grang Hyatt in Hong Kong and the Park Hyatt in Tokyo. All of these are way over USD 100 per night and some nearer USD 1000 per night. Paying USD100 per room per night is nothing if you get away from the crap of bottom end "subsistace" tourism where all money is for beer and / or sex.

However, I never made this trip ? why ? because of the travelling distance and travel options from Bangkok. Now I know that a meter taxi could get me to Don Muang for Bt200 or so plus tolls from the JW Marriott in Bangkok Sukhumvit Soi 2. The problem is that the hotel wants Bt1000 or whatever for a baby Mercedes or older larger Mercedes. That is a rip off, not the USD 150-200 per night nor the USD125 dinner or the USD100 bar bill, the USD 15 extra for the car pisses me off so I dont use them even though I've spent close on USD 500 in the last 24 hours.'

I'll throw in an example here from Queensland, Australia. One of my favourite places is Silky Oaks http://www.silkyoakslodge.com.au/facilities/ This place does packages and pickups from Cairns, Port Douglas or the airport which is about 2 hours away. I would use that option as an all inclusive. Buy decent Nissan Teanas (about Bt1.2m each) or other impressive large 4 door saloon and hire drivers to bring people from Bangkok and other places. Check your nearest airport for people flying in from other LOS destinations.

If you'd offered me a boutique experience coupled with the historical significance of the area and coupled that with secure quality transportation (cold drinks, cold towels, newspapers etc.), I'd have signed up for sure. What would I have paid ? Say you include breakfast and dinner one night (to keep people in the hotel) and perhaps a spa day to relax afterwards, I see no problem in USD 500 ro two or thereabouts including transfers.

Keep with it and even if you drop this thread, drop me a PM to keep me up to date.

[lingling]

We have entered into a 30 year lease with a 30 year option to develop a piece of property in Ban Mai, right on the River, about 20 kms from Kanchanaburi Muang. The rent is 20,000 baht per month, with a 5% increase every 10 years. The actual space is about one rai, but all river frontage.

Ban Mai, Tha Muang? Where the river banks are 20m high and half the year the village is soaked in a rotten stench of stagnant water? If so, I'd reconsider the location. Also, can come up with some attractions to keep visitors busy? There is nothing around there that may be interesting to visitors except the river, rice fields and a couple of temples. Watching the river and walking around a 1 rai plot may be a bit boring to some. Also, the rent sounds a bit high for the area.

Our intention is to build a small exclusive hotel. By small, I mean 30 to 60 rooms, depending on the results of the survey and engineering report. There are no "good" hotels in a 25 km radius. The Felix is the best in the area but if you have a Platinum Amex card, you know the Felix is "adequate". We want to build about 4 or 5 steps above adequate.

There are plenty of hotels in Kanchanaburi, in and around amphur muang that are better than Felix; hotels with a bit of service that serve good food etc. Really, Felix is a two star rat hole with crappy food, at least it was last time I bothered to visit it. I would recommend you to do a bit of more research. Start with the stretch of road between the railway bridge and the drivers license office; there are a couple of nice hotels there. Next, check out a place called "The Lake" a bit off the bypass road.

Btw, is your orchid farm the one where they are building a large concrete building a little bit east of the big TRT house? (Along one of the irrigation canals from the Mae Klong dam..?)

[JimsKnight]

A bold proposal from the OP but a factor in the now muddied waters is the fact that many folk visit Kan. province on a day trip from BKK and not even stay overnight.

Also you riding on the fact that tourism will increase, this is seriously riding your luck, kan. province see's the lower end of the Thailand tourism spectrum, not the lowest, but still low enough.

Having said all that there are a few expats who believe that the beachfront areas like Pattaya and Phuket etc will lose there appeal and an 'inland exodus' may take hold on new visitors. Its all in the air on where the ball lands.

The investment IMHO sounds medium to high risk, by your own admission you are new to the hotel industry so count me out.

[soundman]

I don't know about the rest of your plan - but I do know this.

My 9 room house takes up 1 rai (1600m2) of land (including balconies, walkways sitting areas etc.).

I don't for the life of me see how you could get 30 rooms on to it with other requirements such as restauarants, reception areas, sitting areas, staff quaters, kitchens, public toilets, car parking etc without making the building 8 - 10 stories tall, or the rooms the size of dog boxes. Highly unlikely a building of that height could be built for even 2 million dollars & I'm not sure Or Bor Tor will approve plans for such.

30 odd kms's from the main attraction (reason for travelling to Kan) is too far. Rent of 20,000B per month for one rai of land in the middle of nowhere sounds a little high to me - even with river frontage. River frontage land where I live goes for about 2000 - 3000B per rai per year (close to town). Granted there are not that many tourist attractions where I live, people still like to build houses & whatnot near the river.

All in all your proposal sounds a little goofy to me. You can go on about your credentials & previous successes, but it really does sound like a sales pitch for the mom & pop investor, the type that usually gets into the market at the top of a boom & then bemoans as to why they have lost all their money.

Soundman.

[Edonista]

I wonder why a guy who cashed 8 million $ selling his previous business should now look for investors for a 1 million $ business

[LoveDaBlues]

I wonder why a guy who cashed 8 million $ selling his previous business should now look for investors for a 1 million $ business

good question. and although he claims to have done a lot of homework some things he says just lack common sense.

[SiamOrchids]

I guess a few of the people posting regarding this topic are slow in the spelling and reading comprehension department.

"My questions are very simple:

If we want to sell the approved deal to the eventual operator, in other words, we develop it and presell the completed project, what's it worth ? Do we assume an ROI from a proforma and work backwards ?

Do we look for investors ? It's about a 1 million US$ project. That is too small for the big boys. But perfect for about 3 or 4 individuals with deep pockets.

We do not want to own the project or run it. We put the package together, we want to develop it and then we want to turn it over to a management group that is responsible for the day to day operations".

I'm not looking for investors, nor do I need any.

I was looking for some intelligent feedback. I did get some helpful information. Thanks to those people.

I figured that maybe there were some upper level hotel executives that could offer some advice or some well travelled affluent people who had some helpful observations, but what I got was a few really stupid comments, a lot of mis-spelled words and some people who had nothing to say but said it anyway.

Actually after reading some of the ridiculous responses, I'm sorry that I ever posted this.

[Edonista]

Actually after reading some of the ridiculous responses, I'm sorry that I ever posted this.

Poor guy....may I lend you my handkerchief to wipe off tears ?

[JimsKnight]

Oh cry me a river! Sorry to burst you bubble siam but the forum isn't for the dreamers, its for realists.

Alright you can get off the stage now, Tax. 'ave you got the hook to pull him down...

*whooosh*

[solo siam]

The way I see it is you are simply selling an idea, one that you have now already given away for free on the internet.

It just all seems a bit wishy washy to me, 40-60 rooms on a rai for a million dollars, doesn't sound like 5 star to me - You would also be the most expensive hotel in around 250 miles, with the smallest piece of land.

You say you have a 60 year lease when only a 30 year is allowed, the extension can be nulled by simple sale of the land from the owner and leaseholder to his sister, brother etc... You also ask the question "Do we look for investors?" and then in your next post state "I'm not looking for investors, nor do I need any".

[blizzard]

not to mention , but this guy must be a b i t c h to work with.

hey soundman can i use goofy when i tell the next guy his project s u c k s........lol.

Edited May 11, 2007 by blizzard

[soundman]

not to mention , but this guy must be a b i t c h to work with.

hey soundman can i use goofy when i tell the next guy his project s u c k s........lol.

No copyright on that one. But, come to think of it, I might apply for one!!

Cheers,

Soundman.