My Big Problem From Riots

[peter2076]

This July, I was planning to leave Bangkok and I had just placed by condo up for sale for 1,000,000 baht less than its value when the riots broke out. Foreign investment has dried up. All I was looking to do was pay off my bank loan on the condo that my Thai wife too out in her name.

Now we are stuck. All this because of the riots. Terrible.

What do I do now?

[123ace]

Reduce the price further if you absolutely need the cash now, or just wait until you get a buyer at an acceptable price. I can't see the problem. Sell to a Thai maybe?

[Deez]

Rent it out to cover the bank until the market picks up.

[mjperry]

Rent it out to cover the bank loan payments and look for a buyer when the market picks up again?

Martin

[moe666]

Donot panic

[wasabi]

Your only choice is either to take a huge loss since the market is terrible right now or find a way to delay selling til it improves. As others have said renting is one option. If at all possible do everything you can to delay selling it. People have short memories and I think the market will recover quickly but it's not going to recover this close to the unrest.

[phetaroi]

Your only choice is either to take a huge loss since the market is terrible right now or find a way to delay selling til it improves. As others have said renting is one option. If at all possible do everything you can to delay selling it. People have short memories and I think the market will recover quickly but it's not going to recover this close to the unrest.

I can't help but point out that so many posters on this forum (not necessarily you) (along with the PM) say Thailand is already back to normal. Guess it isn't.

I'm not sure what quality condo you have, but if its like those here on Soi 24, I'd be very pessimistic. Even before the riots, many of the buildings here were less than 50% occupied. One very nice condo across the street from us is probably less than 30% occupied. I rent, and I'm getting out...Thursday...back home to America...because I'm convinced it's not over by a long shot. But, our apartment complex here is older but very nice with very large 3 beds/2.5 baths/full kitchen. Virtually always 100% occupancy. Until the days since the riots. Now a 17% vacancy.

I wish you the best. I'm guessing this is another Thai illusion that's evaporating.

[khundon]

I think you have already done it.

People looking at your post will know that the apartment is going for 1 mill less than you paid.

Sit back and wait for the PM's to pour in with offers.

[mmushr00m]

heheh well Im a vulture...

where, how big, how much?

remember, there are opportunities in chaos....

[gotlost]

Pick a number and stand in line. You are not the only one in this pickle. Moral to this story is DO NOT BUY ANY PROPERTY IN THAILAND.

[Ulysses G.]

I can't help but point out that so many posters on this forum (not necessarily you) (along with the PM) say Thailand is already back to normal. Guess it isn't.

Thanks for the insight, but most of us realize that the PM was not speaking literally.

[london]

Having some small experience in Thai property and real estate in general, these are the questions I think you need to ask:

1) can I afford to hold the property with NO rental ?

2) can I afford to make a loss ?

These two are the most crucial to your situation now.

Frankly, I can't see that you are going to find it easy to rent (sorry, but thats what I see in this environment) and therefore, this is the most important question.

If you can't afford to hold it without having rental income, then your option is simple, you have to sell.

The next question is: how much loss are you prepared or able to take?

It may be that your borrowings will exceed the actual selling price of the unit. Are you prepared to accept this ? Can you AFFORD to accept this ?

If you are in a situation where you HAVE to sell, bite the bullet and do it.

You can always, depending on your age of course, recover from losses.....even a substantial one.

I don't see the market in Bangkok recovering any time soon, particularly near the epicentre of all the tensions.

There will be "investors" for want of a better word, circling the marketplace looking for bargains.....but there will too be more realistic buyers who for whatever reason need to buy a condo.

Be realistic, based NOT on what you NEED to get for your property but on what your property is NOW worth in the market.

Once you have done that, and made a decision either way, stick with it.

If you decide to keep it, it will recover eventually.

If you decide that you HAVE to sell, sell it....and then forget about it. The past is past.

Good luck !

[johnnyk]

Try renting it to cover some costs. People always need a place to live and all 12 million in BKK can't get on a plane and leave.

[jackdawson]

for 1,000,000 baht less

sell (if u can even find a buyer) at a loss ?

how can that be possible ?

i saw a post once or twice w/ percentages re: return on investment/equity and thought thai real estate was bulletproof .

que pasa ?

[witold]

I think you're being a little melodramatic. Real Estate never sells over night unless it is prices very attractively.

"1,000,000 baht less than its value " - nine times out of ten this is a euphemism for 'I think my condo is worth much more than rest of the market thinks." In other words, probably overpriced to begin with...

[ExpatJ]

I'm looking to buy a condo in Bangkok- can you give me more information- location, cost, etc etc.

[peter2076]

I'm looking to buy a condo in Bangkok- can you give me more information- location, cost, etc etc.

the condo is located close to Samitivet Srinakarin Hospital between Ramkhamhaeng and Rama 9. It is close to a new sky train station and the highway. 2 bedrooms, 2 bathrooms, 106 sq. meter. Top floor, fully furnished, mint condition, new building.

[rixalex]

I'm looking to buy a condo in Bangkok- can you give me more information- location, cost, etc etc.

the condo is located close to Samitivet Srinakarin Hospital between Ramkhamhaeng and Rama 9. It is close to a new sky train station and the highway. 2 bedrooms, 2 bathrooms, 106 sq. meter. Top floor, fully furnished, mint condition, new building.

Did you start this thread purely to advertise?

[pkrv]

Having some small experience in Thai property and real estate in general, these are the questions I think you need to ask:

1) can I afford to hold the property with NO rental ?

2) can I afford to make a loss ?

These two are the most crucial to your situation now.

Frankly, I can't see that you are going to find it easy to rent (sorry, but thats what I see in this environment) and therefore, this is the most important question.

If you can't afford to hold it without having rental income, then your option is simple, you have to sell.

The next question is: how much loss are you prepared or able to take?

It may be that your borrowings will exceed the actual selling price of the unit. Are you prepared to accept this ? Can you AFFORD to accept this ?

If you are in a situation where you HAVE to sell, bite the bullet and do it.

You can always, depending on your age of course, recover from losses.....even a substantial one.

I don't see the market in Bangkok recovering any time soon, particularly near the epicentre of all the tensions.

There will be "investors" for want of a better word, circling the marketplace looking for bargains.....but there will too be more realistic buyers who for whatever reason need to buy a condo.

Be realistic, based NOT on what you NEED to get for your property but on what your property is NOW worth in the market.

Once you have done that, and made a decision either way, stick with it.

If you decide to keep it, it will recover eventually.

If you decide that you HAVE to sell, sell it....and then forget about it. The past is past.

Good luck !

IMO - Excellent advise London - ohh and the word you were looking for was - vultures - PKRV

Edited June 3, 2010 by pkrv

[trogers]

There is a retirement housing development in Arizona that is virtually empty. Houses that were selling there for $500,000 now are up for sale at $200,000....and there are no buyers even at that price. The developers (the company) was counting on sales to help them finance the infrastructure of the development. Now they are broke, because no buyers means no money to finance things like shopping malls and access roads to the retirement village. At present the nearest access road is unfinished and an unpaved dirt road for the last two miles is the only approach road.

This developer forgot to count the cost, or, more probable, got too greedy by expecting financing resources on the future value of the development before it has been realised.

I wonder if there is any firm who will finance my stock investment based on my expected 200% increase in the prices of the stocks I am looking at....

[london]

Many thanks PKRV.

Hope that wherever you are in the world, life is treating you well.

[rgs2001uk]

I'm looking to buy a condo in Bangkok- can you give me more information- location, cost, etc etc.

the condo is located close to Samitivet Srinakarin Hospital between Ramkhamhaeng and Rama 9. It is close to a new sky train station and the highway. 2 bedrooms, 2 bathrooms, 106 sq. meter. Top floor, fully furnished, mint condition, new building.

It may well be close to a new sky train station, however is the sky train station actually open and operational?

What is the name of this sky train station?

[Bakseedaa]

where is your condo and do you have any pics of the inside..?

[LivinLOS]

I'm looking to buy a condo in Bangkok- can you give me more information- location, cost, etc etc.

the condo is located close to Samitivet Srinakarin Hospital between Ramkhamhaeng and Rama 9. It is close to a new sky train station and the highway. 2 bedrooms, 2 bathrooms, 106 sq. meter. Top floor, fully furnished, mint condition, new building.

And the vital.. Price ??

The way I see it is, Thailand is, in the next couple of years, going to go through the unmentionable event.. When that happens the chaos that happens through the power grab, will be interesting to say the least.

If you think theres blood on the streets now.. It aint nothing compared to the immediate aftermath of that.

[SamuiHomemadeFood]

heheh well Im a vulture...

where, how big, how much?

remember, there are opportunities in chaos....

I agree, As Warren Buffet says the time to buy is when everybody is panicking and selling. You just need the nerve. A friend has reduced his place from 49.5 million to 38 and is throwing in his twin engined speedboat and 2 year old Fortuna as well. Just wish I had 38 million as I would snap his hand off

[witold]

This developer forgot to count the cost, or, more probable, got too greedy by expecting financing resources on the future value of the development before it has been realised.

I wonder if there is any firm who will finance my stock investment based on my expected 200% increase in the prices of the stocks I am looking at....

Most - if not all - developments are financed on a rolling basis and even when they are started by big development firms with billions in assets, the projects are structured to work independently from the big firm. (for liability and financing reasons.) As such, many projects in the US halted construction in the last 2-3 years because of financing constraints and market conditions. Parent companies will not dump more money into losing propositions - the walk away just like home owners walk away when they are "under water". Chances are that the AZ developer mentioned above could easily finish the project - but it would make no sense because they would just increase the amount of money they lose. They will finish things off if things improve and they still have control of the property. If they lost control to the lenders, the lender will sell to another developer to finish things off when it makes financial sense to finish the project. It is not unusual to see projects started in 2004-5 that halted construction and only in the last year resumed construction.

[trogers]

This developer forgot to count the cost, or, more probable, got too greedy by expecting financing resources on the future value of the development before it has been realised.

I wonder if there is any firm who will finance my stock investment based on my expected 200% increase in the prices of the stocks I am looking at....

Most - if not all - developments are financed on a rolling basis and even when they are started by big development firms with billions in assets, the projects are structured to work independently from the big firm. (for liability and financing reasons.) As such, many projects in the US halted construction in the last 2-3 years because of financing constraints and market conditions. Parent companies will not dump more money into losing propositions - the walk away just like home owners walk away when they are "under water". Chances are that the AZ developer mentioned above could easily finish the project - but it would make no sense because they would just increase the amount of money they lose. They will finish things off if things improve and they still have control of the property. If they lost control to the lenders, the lender will sell to another developer to finish things off when it makes financial sense to finish the project. It is not unusual to see projects started in 2004-5 that halted construction and only in the last year resumed construction.

Developing landed properties differ from high-rise projects. In Thailand, the infra-structure will be the first portion of the project that will be built, and the houses follow, after they have been sold. If a development is large, say over a 100 rai, it will be developed and sold in phases. This will allow realised profits to be used to finance later phases.

Thus I am surprised that a landed property development in the US is built such that even an access road is uncompleted to the completed houses...

Edited June 4, 2010 by trogers

[gregb]

heheh well Im a vulture...

where, how big, how much?

remember, there are opportunities in chaos....

I agree, As Warren Buffet says the time to buy is when everybody is panicking and selling. You just need the nerve. A friend has reduced his place from 49.5 million to 38 and is throwing in his twin engined speedboat and 2 year old Fortuna as well. Just wish I had 38 million as I would snap his hand off

We're not even close to a Warren Buffet blood in the streets moment yet.

Purchasing real estate right now, to use another metaphor, is trying to catch a falling knife.

Wait until hyperinflation starts, then buy. That will be the bottom. And my guess is it will be at least 60% below where it is today. Historically, there is always a deflationary dip before an economy explodes into hyperinflation. Thailand itself may be able to escape the global hyperinflationary collapse by judicious use of currency controls, but the effects of the global collapse on things of real value such as gold and real estate will not be spared.

Watch Europe for clues. The disease will start there, then America and finally Asia.

If you truly need money today and can't hold on for at least a decade or two, get out now at any price the market will bear. Things are going to get much, much worse before they get better, and getting better is still a long time away.

I've noticed people who are in the real estate business don't like my opinions very much, so do your own diligence. But from where I sit, anyone who thinks there will be a quick recovery from here is clearly smoking some really good weed.

[LivinLOS]

We're not even close to a Warren Buffet blood in the streets moment yet.

Purchasing real estate right now, to use another metaphor, is trying to catch a falling knife.

Wait until hyperinflation starts, then buy. That will be the bottom. And my guess is it will be at least 60% below where it is today. Historically, there is always a deflationary dip before an economy explodes into hyperinflation. Thailand itself may be able to escape the global hyperinflationary collapse by judicious use of currency controls, but the effects of the global collapse on things of real value such as gold and real estate will not be spared.

Watch Europe for clues. The disease will start there, then America and finally Asia.

If you truly need money today and can't hold on for at least a decade or two, get out now at any price the market will bear. Things are going to get much, much worse before they get better, and getting better is still a long time away.

I've noticed people who are in the real estate business don't like my opinions very much, so do your own diligence. But from where I sit, anyone who thinks there will be a quick recovery from here is clearly smoking some really good weed.

I agree with this assessment, and have made a fair amount following my views on the last few years (silver gold miners etc) but want to point out..

If we do reach a hyper inflationary period, and its looking at least possible, then owning things will protect against fiat destruction. Sure they may get killed in nominal terms, and you also need to own things with a very different eye to security IMO, but selling a home to cash and sitting on it would be frying pan to fire IMO.

[eggomaniac]

QUOTE (wasabi @ 2010-05-31 11:39:02) Your only choice is either to take a huge loss since the market is terrible right now or find a way to delay selling til it improves. As others have said renting is one option. If at all possible do everything you can to delay selling it. People have short memories and I think the market will recover quickly but it's not going to recover this close to the unrest.

I can't help but point out that so many posters on this forum (not necessarily you) (along with the PM) say Thailand is already back to normal. Guess it isn't.

I'm not sure what quality condo you have, but if its like those here on Soi 24, I'd be very pessimistic. Even before the riots, many of the buildings here were less than 50% occupied. One very nice condo across the street from us is probably less than 30% occupied. I rent, and I'm getting out...Thursday...back home to America...because I'm convinced it's not over by a long shot. But, our apartment complex here is older but very nice with very large 3 beds/2.5 baths/full kitchen. Virtually always 100% occupancy. Until the days since the riots. Now a 17% vacancy.

I wish you the best. I'm guessing this is another Thai illusion that's evaporating.

I was trying to telling my friend who has one of those places in a gated community Huahin, swimming pool and all, to divest. He's one of these people who is so glad everything is back to ABnormal

and 'believes' things are going to be smooth sailing now.

If Phetaroi is correct, and I strongly believe he is, that' it's not over by a long shot', you should get whatever you can, before the value drops even more.

if is the biggest word in the dictionary........... I am going to wait for the chaos to reach it's peak, then invest, there could quite possibly be 3 different countries to choose from, as well, and international rebuilding programs.

Getting out, now, V history may show you were one of the smart ones. good thing you are hanging on cerebral.

but what the hey HURRAH things are back to abnormal!