Lending money to a Thai

[RobMuir]

I am going to lend 2 million baht to a Thai I know.

 

She offered to pay me interest until she sells her hotel. (The land value is many times more than the loan)

 

She has a smaller resort that I will either jumnong จำนอง or kaifaak ขายฟาก.

Once again, the land value is a lot more than 2 million baht.

 

She prefers the jumnong way but I think I will go the kaifaag way as i understand it to be stronger.

 

Can anyone here clearly explain the difference between the two and pros and cons of each.

And the procedures at the land office etc.

And anything else.

 

I want to ensure that if she doesn't pay me then I gain more than the 2 million. (The resort is on 80 Rai, worth at least 80 million)

 

If she does not pay for some reason what is the procedure for removing her from the property? 

 

Her cash flow has been devasted by covid. Lending against her bigger resort isn't an option as a bank already has that mortgaged.

 

I am after factual information specificly about these two procedures, not about lending Thais unsecured loans which I won't be doing.

[Tagged]

When she already have values for 80 million, why she need a private loan from you? 

 

Most likely she have already past her limits with the banks, family and other possibillities.

 

 

[4MyEgo]

4 minutes ago, Tagged said:

why she need a private loan from you? 

 

Anyone needing a loan, is long past their use by date in my opinion.

 

NO should be the reply, and it's ok to say NO, if that person cannot accept that, then that is their problem, not yours and you should not feel guilt for saying NO, the person asking should be the one feeling guilty for putting you in this situation of making you feel guilty, i.e. if you feel guilty.

 

People who lend money (non banks) expose themselves to these types of people and 99% of the times, don't get the money back, that is why banks require security in the form of an asset before lending money, and if you say she has values of 80 million baht, I would say, start walking away, sounds like a scammer because someone with that kind of money doesn't ask friends for a loan, they have reserves and money readily available, trust me, I know a lot of wealthy people and they have never asked me for one baht.

 

It appears you have met your female BS artist.

 

[Tagged]

Jumnong is when you get to keep the paper of the land until she pays, kaifaak is when land paper is transfered to you, but she can buy back. Thats what my gf says. 

 

What kind of land title she have. 

 

 

[Poet]

20 minutes ago, RobMuir said:

She prefers the jumnong way but I think I will go the kaifaag way as i understand it to be stronger.

 

Can anyone here clearly explain the difference between the two and pros and cons of each.

As clearly as I can explain it:

Jumnong จำนอง - You will lose 2 million baht.

Kaifaak ขายฟาก - You will lose 2 million baht.
 

23 minutes ago, RobMuir said:

If she does not pay for some reason what is the procedure for removing her from the property?

The more efficient and likely procedure would be for a member of her family, or the boyfriend she told you she doesn't have, to remove you from this mortal coil.
 

[alocmrlj]

Something to look at. How would kaifaak or jumnong  work when farang can't legally own land in Thailand. 

[RobMuir]

18 minutes ago, 4MyEgo said:

 

Anyone needing a loan, is long past their use by date in my opinion.

 

NO should be the reply, and it's ok to say NO, if that person cannot accept that, then that is their problem, not yours and you should not feel guilt for saying NO, the person asking should be the one feeling guilty for putting you in this situation of making you feel guilty, i.e. if you feel guilty.

 

People who lend money (non banks) expose themselves to these types of people and 99% of the times, don't get the money back, that is why banks require security in the form of an asset before lending money, and if you say she has values of 80 million baht, I would say, start walking away, sounds like a scammer because someone with that kind of money doesn't ask friends for a loan, they have reserves and money readily available, trust me, I know a lot of wealthy people and they have never asked me for one baht.

 

It appears you have met your female BS artist.

 

So you have no knowledge of jumnong or Kai faag.

Thankyou for that contribution.

[Ian3005]

From my experience I would not give the loan as the chances of repayment is slim.

That is unless it is done legally and you have some form of security.

[RobMuir]

15 minutes ago, alocmrlj said:

Something to look at. How would kaifaak or jumnong  work when farang can't legally own land in Thailand. 

Yes, good point.

 

Will be in my trusted Thai business partners name. We have a company together (he funded his share, not just a nominee). We might even put it through the company.

 

I was hoping to get some real life info from someone experienced with that also.

[Ian3005]

Just now, RobMuir said:

So you have no knowledge of jumnong or Kai faag.

Thankyou for that contribution.

 

Just now, Ian3005 said:

From my experience I would not give the loan as the chances of repayment is slim.

That is unless it is done legally and you have some form of security.

 

Just now, RobMuir said:

So you have no knowledge of jumnong or Kai faag.

Thankyou for that contribution.

I agree 110% with 4MyEgo. Be prepared to be dropped like a hot coal when you refuse.

[sanuk711]

30 minutes ago, RobMuir said:

jumnong way but I think I will go the kaifaag

With kaifaag RobMuir there is a lot of added expense, Tax for changing property into your GF name, then tax on changing it back if she does pay you. Its the safest and fastest option if you are not paid . But the tax alone would whipe out the loan you are quoting--you also have to be aware of the law of  "Usury" What rate are you lending at. ?

 

Because "Legally" you are not going to get more then 1.3% a month (16% a year for a secured loan---18.86%  for unsecured)

I have friends who formed a consortium to lend on construction sites at 13%--which is a good income if all is going well. (certainly better than my bank interest rate) But they do it properly with a law firm etc.

With removing someone from the property--you have to take a step back and put it into the hands of an agency.

 

jumnong for a farng involved is definitely not an option.

[Ian3005]

A Thai woman asking for a loan should set off alarm bells and warning sirens.

Look at the lifestyle of the person asking for the loan.

If you see brand label clothing and high end accessories like Louis Vuitton, Chanel, Ferragamo etc. run like the wind.

[RobMuir]

38 minutes ago, Tagged said:

When she already have values for 80 million, why she need a private loan from you? 

 

Most likely she have already past her limits with the banks, family and other possibillities.

 

 

They have a buyer (but no deposit paid yet) for the bigger resort. That has loans against it.

Expected to settle in 3 months. But being Thailand it will probably take longer as everything does.

 

Banks want her to lend for a minimum of 3 years. She doesn't want it or need it. I am charging her the maximum legal interest rate plus a bonus. Win win.

 

The smaller resort already has 800;000 jumnong against it. She will use the 2 million to pay that off, a couple of other smaller personal debts and survive on the rest until the big sale comes through.

 

She also has other land she has jumnonged.

 

Obviously been hit hard by the tourist covid situation.

 

I will only lend it against a clean land title on the smaller resort at the land office. And I believe if I jumnong her I have to go to court to take her resort, whereas if I kaifaag it I simply just kick her out and can legally sell it straight away. That actually is my main question here.

 

[KannikaP]

6 minutes ago, RobMuir said:

Banks want her to lend for a minimum of 3 years

.....borrow............

[RobMuir]

10 minutes ago, sanuk711 said:

With kaifaag RobMuir there is a lot of added expense, Tax for changing property into your GF name, then tax on changing it back if she does pay you. Its the safest and fastest option if you are not paid . But the tax alone would whipe out the loan you are quoting--you also have to be aware of the law of  "Usury" What rate are you lending at. ?

 

Because "Legally" you are not going to get more then 1.3% a month (16% a year for a secured loan---18.86%  for unsecured)

I have friends who formed a consortium to lend on construction sites at 13%--which is a good income if all is going well. (certainly better than my bank interest rate) But they do it properly with a law firm etc.

With removing someone from the property--you have to take a step back and put it into the hands of an agency.

 

jumnong for a farng involved is definitely not an option.

Thankyou for your intelligent, informed reply.

 

Yes I was aware of the extra expense for her which is why she wants jumnong over kaifaag. Her smaller resort is on a few different chanotes.

 

I could take one for say worth 10 million that includes the private road to her resort valued at say 10 million, which would reduce her taxes but still secure my loan.

 

I am pretty sure I won't be jumronging it. And will go for the fool proof kaifaag way.

 

Up to me.

[zombie nights]

"Can anyone here clearly explain the difference between the two and pros and cons of each.

And the procedures at the land office etc.

And anything else."

 

-There are some decent and astute Thai lawyers  who speak good English that can answer all your questions and can advise you properly.

 

 

 

[RobMuir]

15 minutes ago, Ian3005 said:

A Thai woman asking for a loan should set off alarm bells and warning sirens.

Look at the lifestyle of the person asking for the loan.

If you see brand label clothing and high end accessories like Louis Vuitton, Chanel, Ferragamo etc. run like the wind.

She is actually wealthy but you wouldn't pick it. Quite the opposite of what you describe. She is in her 50's. 

Built up her wealth steadily over many years, just screwed now because of covid. She will be cashing in big time if the bigger resort sells which is why I don't feel guilty about taking the high interest.

[RobMuir]

Just now, zombie nights said:

"Can anyone here clearly explain the difference between the two and pros and cons of each.

And the procedures at the land office etc.

And anything else."

 

-There are some decent and astute Thai lawyers  who speak good English that can answer all your questions and can advise you properly.

 

 

 

I will be seeking legal advice, was hoping to get a heads up here.

 

Thankyou

[RobMuir]

53 minutes ago, Tagged said:

Jumnong is when you get to keep the paper of the land until she pays, kaifaak is when land paper is transfered to you, but she can buy back. Thats what my gf says. 

 

What kind of land title she have. 

 

 

Chanotes

[sanuk711]

27 minutes ago, RobMuir said:

And I believe if I jumnong her I have to go to court to take her resort, whereas if I kaifaag it I simply just kick her out and can legally sell it straight away. That actually is my main question here.

Yes basically that is correct--I see now-- you have a Thai partner which makes everything a lot easier (but not to easy) You talk about taking the Max rate + a bonus , be careful about that. It should be shown (like a bank) as set up fees, and paid when taking out the loan like the bank does not added on with interest to paid on it not allowed--its a loan or its a fee. The time factor has also changed since the Army done their raid a few years ago on illegal loans. You would have to grant her "adequate"  time for repayment. The minimum now being 1 year written into the contract.

 

In the contract, look at this as something she is not going to pay back---therefor fixtures Air-conditioners etc should all be listed as part of it.

As its a resort you may want to list everything in the contract--tables beds etc...

Edited April 30, 2021 by sanuk711

[ICELANDMAN]

18 minutes ago, RobMuir said:

Chanotes

 

What kind of chanot ?

Edited April 30, 2021 by ICELANDMAN

[Gecko123]

You seem to be laboring under the misperception that there is a reliable legal and civil law-enforcement infrastructure in place to enforce your rights in the event of default. There isn't. Going to court can take years, and even if you win a judgement, there will almost certainly be no help available to enforce the verdict. Your ability to enforce any financial interest you have in land will be severely undermined, if not crippled, by Thailand's land laws which prohibit ownership in land by foreigners. There is a very high probability that you have been approached for a loan largely because you are naively unaware of these realities.

[thasoss]

the questions you ask are quite technical,would n't a lawyer be the best person to ask.

 

Only loan if you are ok with the possibility of losing your money.I know you did n't ask for this kind of advice but it surely applies.

[BritManToo]

1 hour ago, RobMuir said:

I want to ensure that if she doesn't pay me then I gain more than the 2 million. (The resort is on 80 Rai, worth at least 80 million) If she does not pay for some reason what is the procedure for removing her from the property?

Assume a bank already has first lien on the land.

You'll get nothing.

[Tagged]

I still do not understand why she do not want to take a bank loan, and sell the properties involved with the bank loan included. That is perfectly normal, or? 

[Johnny Mac]

What a vile, incencitive post. At a time when many can't even pay their bills and put food on the table for their kids you decide to come on here and tell a bunch of strangers you have a load of dough to chuck around. They say you can't buy class, and you don't have any old bean. I hope you lend it to her and don't get t back.

[Tagged]

1 minute ago, BritManToo said:

Assume a bank already has first lien on the land.

You'll get nothing.

Then she have no legal paper to give to him if so. 

Edited April 30, 2021 by Tagged

[BritManToo]

32 minutes ago, RobMuir said:

She is actually wealthy but you wouldn't pick it. Quite the opposite of what you describe. She is in her 50's. 

Built up her wealth steadily over many years, just screwed now because of covid. 

Not that wealthy if she needs a 2M loan and can't get it from a bank.

[Fromas]

43 minutes ago, RobMuir said:

I will be seeking legal advice, was hoping to get a heads up here.

 

It would be nice if you could share how your lawyer wants to structure this transaction.

 

 

Edited April 30, 2021 by Fromas

[WineOh]

Never have a never will.

 

You want me to wire you my bank details mate?

bet I can spend it better than she can ????