Investing In An Island Beach Resort

[~G~]

I was contacted by a group of foreign investors, interested to invest between $50,000 - $500,000 in an Island beach resort

Interested to find:

- A real-estate broker that can help Identify a beach resort that is interesting in terms of location, true market value and ROI.

- A law firm that can help with regard to foreign investment and any other legal issues.

- A hotel owner who will operate (or continue operating) the resort

The idea is to act as silent partners and receive their share of the profits.

Any suggestions will be appreciated.

[Tornado]

If $500 k is their limit, I think they should be looking for a couple of wooden bungalows on a desterted beach. It will be hard to find a Resort on the beach in the price range theyre looking for IMHO.

Good Luck, I would like to offer you something, but I do not have anything under 200 mil Baht.

[~G~]

If $500 k is their limit, I think they should be looking for a couple of wooden bungalows on a desterted beach. It will be hard to find a Resort on the beach in the price range theyre looking for IMHO.

Good Luck, I would like to offer you something, but I do not have anything under 200 mil Baht.

<{POST_SNAPBACK}>

Thanks for the feedback, Tornado.

First, one possibility (even preferred) is to join other investors.

Second, if $500K is a very unrealistic figure, that's a useful input as well. They might need to consider allocating more funds for this project. Could you say, in very general terms, what kind of property you know for 200M baht?

[monty]

~G~,

go to Sunbelt asia's website

http://www.sunbeltasia.com/

and in the right hand corner search box type: "resort beach"

It will return some 36 listings of resorts on beaches in Thailand, and on a first glance several would fall in the financial criteria your investors require.

Working with Sunbelt Asia also has the advantage of the having a full legal department, so they could advise you through the acquisition from the due diligence stage up to the actual buyout...

Seems they have a good track record and on top of it they are sponsors of this forum

Edited May 12, 2005 by monty

[~G~]

~G~,

go to Sunbelt asia's website

http://www.sunbeltasia.com/

and in the right hand corner search box type: "resort beach"

It will return some 36 listings of resorts on beaches in Thailand, and on a first glance several would fall in the financial criteria your investors require.

Working with Sunbelt Asia also has the advantage of the having a full legal department, so they could advise you through the acquisition from the due diligence stage up to the actual buyout...

Seems they have a good track record and on top of it they are sponsors of this forum 

<{POST_SNAPBACK}>

Thanks, monty, their site is very helpful.

Regarding legal advice, don't you think there might be a conflict of interest in case the business broker also supplies the legal advice and the due diligence??

[monty]

The due dilligence is something the client has to do himself, maybe with help from knowledgable local people!

It would be indeed a conflict of interest when the broker would do this.

The legal advice I guess is to be trusted, if anything goes wrong, the broker won't get their commision, so they have every interest to get the proceedings as smooth and correct as possible...

[~G~]

The due dilligence is something the client has to do himself, maybe with help from knowledgable local people!

It would be indeed a conflict of interest when the broker would do this.

The legal advice I guess is to be trusted, if anything goes wrong, the broker won't get their commision, so they have every interest to get the proceedings as smooth and correct as possible...

<{POST_SNAPBACK}>

Unless it goes wrong after the transaction has been made... Legal problems don't usually appear right after you sign a contract, but rather later...

In any way, almost all of these listings are properties for sale; almost none are by someone seeking business partners, investors, to expand the business. These businesses obviously cannot function without the owners, and my investors are not interested to actively manage the place themselves. I assume that finding a good reliable manager to run the place is not at all an easy task.

[monty]

Well, I guess not many businesses are seeking silent partners, because they simply would be very difficult to find!

Thailand does not have a very good reputation, especially in the hospitality and nightlife areas. Stories abound where businesses have partners with combined shareholdings of a couple of hundred %'s

I did see one in the listings where a guy was offering either a 40 or 80% share in his Samui resort with as reason stated he wanted to welcome some fresh idea's and has such good omens about the place that he would never sell the full 100%... The ROI seemed a bit low though...

In all honesty I would never advice a friend to become a silent partner in whatever business over here except when he is planning to live here fulltime and be able to monitor the ongoings on a daily base.

I haven't much seen venture capital investment companies over here, which it seems is what your friends are trying to do. High risks, but if it works out there might be big gains to be made...

I think the risk in Thailand is just to high...

In my opinion such investments would only be relatively safe in BOI sponsored and supervised businesses, but I guess we're in a different investment level then!

[~G~]

Good points; my first question to them was - will you have someone on your behalf, staying on-site on a regular basis - if not managing, at least supervising the finances? The answer is that there will be someone coming from time to time, or a permanent resident supervisor in case of a large investment.

Edited May 13, 2005 by ~G~

[KronbergTH]

I was contacted by a group of foreign investors, interested to invest between $50,000 - $500,000 in an Island beach resort

<{POST_SNAPBACK}>

Not possible! This kind of investment is too small. If a foreign investor wants to make money on a hotel in Thailand (with the heavy competition), he must to invest in a four or five star hotel. Small investments, even 20 mil baht, are for retirement investors only or small business. Or for investors, who want to make fun.

[~G~]

I was contacted by a group of foreign investors, interested to invest between $50,000 - $500,000 in an Island beach resort

<{POST_SNAPBACK}>

Not possible! This kind of investment is too small. If a foreign investor wants to make money on a hotel in Thailand (with the heavy competition), he must to invest in a four or five star hotel. Small investments, even 20 mil baht, are for retirement investors only or small business. Or for investors, who want to make fun.

<{POST_SNAPBACK}>

Why? Because of the larger profit margins in 4-5 star hotels?

What kind of yield will you expect then, from a smaller resort?

[thaistick]

I was contacted by a group of foreign investors, interested to invest between $50,000 - $500,000 in an Island beach resort

<{POST_SNAPBACK}>

Not possible! This kind of investment is too small. If a foreign investor wants to make money on a hotel in Thailand (with the heavy competition), he must to invest in a four or five star hotel. Small investments, even 20 mil baht, are for retirement investors only or small business. Or for investors, who want to make fun.

<{POST_SNAPBACK}>

Many years ago I managed a large luxury hotel and have also owned small motels.Guess which business had a greater net profit per investment dollar and after expenses?Bigger isn't always better and the vacancy rate with the large hotel was always higher than the motels. Motels on a busy highway or vacation area are cash machines where one is basically just renting bedrooms by the night or week and where half the receipts were in cash unlike the hotel which was mostly on credit cards.Having 10 motels costing $1,000,000 each in good locations will make more than one ten million dollar hotel.

[KronbergTH]

I was contacted by a group of foreign investors, interested to invest between $50,000 - $500,000 in an Island beach resort

<{POST_SNAPBACK}>

Not possible! This kind of investment is too small. If a foreign investor wants to make money on a hotel in Thailand (with the heavy competition), he must to invest in a four or five star hotel. Small investments, even 20 mil baht, are for retirement investors only or small business. Or for investors, who want to make fun.

<{POST_SNAPBACK}>

Many years ago I managed a large luxury hotel and have also owned small motels.Guess which business had a greater net profit per investment dollar and after expenses?Bigger isn't always better and the vacancy rate with the large hotel was always higher than the motels. Motels on a busy highway or vacation area are cash machines where one is basically just renting bedrooms by the night or week and where half the receipts were in cash unlike the hotel which was mostly on credit cards.Having 10 motels costing $1,000,000 each in good locations will make more than one ten million dollar hotel.

<{POST_SNAPBACK}>

Yes, because if you owns and runs a small hotel by yourself, you will have small expenses, BUT if a group of investors, who want dividend and what so ever, and GM, MD, directors, etc, are responsible to them, everybody wants bigger salary... Keep is simple is good, but then you have to run without investors, otherwise it is not simple.

[Indo-Siam]

Beware of an African-based 419-style scam group presently active, but using the approach that they are an investment group looking to invest in resort properties in Thailand. All they are really looking for is access to your bank account details.

The operate under the name "Global Capital xxx," among others.

Good luck!

Cheers!

Steve

Indo-Siam

[dr_Pat_Pong]

What's happened Steve. Did the Nigerians lose the franchise ?

[Gary A]

Maybe

I know an elderly Thai woman who has at least four farang equal 50% partners in her hotel/bar.

What's happened Steve. Did the Nigerians lose the franchise ? 

<{POST_SNAPBACK}>

[~G~]

Beware of an African-based 419-style scam group presently active, but using the approach that they are an investment group looking to invest in resort properties in Thailand.  All they are really looking for is access to your bank account details.

The operate under the name "Global Capital xxx," among others.

Good luck!

Cheers!

Steve

Indo-Siam

<{POST_SNAPBACK}>

Thanks for the warning. This is not this group (unless these africans can speak fluent hebrew).

[Indo-Siam]

I just threw up the advisory as a general warning.

Doc - the scammers are definitely getting more creative.

I run another technology-oriented business, involved with rather obscure technology (www.thermoelectricsupplier.com), but even though this activity is in a very isolated niche of commerce, I have had two Nigerian outfits contact me looking to buy bulk quantities, plus one "British" gentleman contact me looking to invest millions in a thermoelectric business such as mine. The fact that they tracked me down in this unknown field really surprised me.

So - the old adage holds true - if it sounds too good to be true ....... RUN (don't walk) in the opposite direction.

Cheers!

Steve

Indo-Siam

[sadman]

Just to reiterate the problems with 419 fraud (so called because 419 is the article in the Nigerian penal code that deals with such fraud): if anyone in the UK HASN'T been contacted by someone offering them 10% for allowing them to launder millions of dollars through their bank account, then they must have a really low credit rating!

I deal with such matters all the time in the UK, and the scammers are not only on e-mail, but are sending letters through the posr as well. It is a truly global enterprise (we come across it in South Africa, USA, UK and all over Europe) and operates from many countries. It is unbelievable how many people get caught - and it is not just fraud, but has descended into the darker areas of blackmail as well. And you will have no idea of who is doing it, or even from which country.

Be assured - it is organised crime like you would not believe. These people have access to our e-mails, home and business addresses and so on. Let's not make it any easier by giving them our bank details as well.

[~G~]

Yes, because if you owns and runs a small hotel by yourself, you will have small expenses, BUT if a group of investors, who want dividend and what so ever, and GM, MD, directors, etc, are responsible to them, everybody wants bigger salary... Keep is simple is good, but then you have to run without investors, otherwise it is not simple.

<{POST_SNAPBACK}>

Ok, good to get this clarification. What you're basically saying is that the key for it to succeed is to have an effective yet cheap supervision system.

[KronbergTH]

Ok, good to get this clarification. What you're basically saying is that the key for it to succeed is to have an effective yet cheap supervision system.

<{POST_SNAPBACK}>

Yes; and the next key for a smaller hotel is to found a way to keep salary reasonable for experienced employees without they are resigning. Thai hotel employees are often looking for job possibilities at hotels with more stars. Only a strong phu jay MD/GM is able to keep staff. An employed GM at a smaller hotel may have some problems, I think.