Buying A Guesthouse In Pattaya,Expenses ?

[actiondell4]

AND how do you work out the proper value of a business ?

I have been trying to help a friend of mine who is disabled and is looking for a guesthouse with an elevator.

He was/is trying to buy a going concern business.

Anyway,can any smart business guy/girls give me some advice on this.

I have been looking at a guesthouse/hotel that has 15 rooms .24 hours reception.

It has been on the market for over 12 months.

It has potential says the business broker who showed me the place,for example open the bottom bar into a 24 hour restaurant etc.

There is no elevator.

Rent is 90,0000 baht a month,Electrcity is around 35,000 baht a month,other expenses,Water ?,Staff, Has to have someone 24hrs -roughly 40,000 b a month

Its in a double shophouse building and a bar downstairs.There was no one in there when I arrived,seem to be more drinking beer bar.

There are guesthouses /bars all next door to it.

The owner ,this is leasehold,Its for sale at............................ 5 million baht.

Its last 12 month has only been making around 5,000 to 10,000 baht profit average because of the riots etc.

What do you think this business is worth? Do you think the rent is too much ? The Business broker told me the electrcity was around 35,000 baht a month,do you think this is too much ?

Now the owner was an older guy,very nice,his wife had a illness and they have to go back to his own Country urgently.

Lease is a 3x3 Basis,and at end of 3 years,150,000 baht key money.

There will be a new lease when someone buys ,3x3.

So Im trying to work out expenses here.

RENT-90,000 BAHT PER MONTH

STAFF-Average 40,000 plus per month,24 hour reception

Now the owner told me its quite easy for the purchaser to get a work permit as it has over 14 rooms ?

Electrcity-average 35,000 b per month

Water-we could say 10,000 b a month ?????????

Possible to make a profit ? As I said the last few months,particulary April/May the owner said he made around 5 to 10 thousand baht profit.

Edited November 21, 2010 by actiondell4

[harrry]

Your friend is better investing his money in Australia and coming over here he will get a higher retirn with more safety. If he comes here and goes into a venture like that he is putting his entire futre at risk as his payout must cover all medical and maintainance costs for life.

TO come and stay here is one thing...to throw away his fiture is another.

[TravelerEastWest]

Your friend is better investing his money in Australia and coming over here he will get a higher retirn with more safety. If he comes here and goes into a venture like that he is putting his entire futre at risk as his payout must cover all medical and maintainance costs for life.

TO come and stay here is one thing...to throw away his fiture is another.

The numbers look like the guest house is not likely to ever make a good profit unless the bar is popular - move on to something else.

[Khun Jean]

The only one that is making money is the owner of the building. The other people are just passing by. Every few years another sucker.

[SGD]

You clearly have no idea and cannot see that the numbers are just utter rubbish and lies. Avoid like the plague.

[coolhandjoe]

Its last 12 month has only been making around 5,000 to 10,000 baht profit average because of the riots etc.

If this profit is for the whole 12 months i think he has done very well

[samran]

gee, someone is desperate to live in pattaya.

why else would you bother with such a lousy set of numbers?

[coolhandjoe]

gee, someone is desperate to live in pattaya.

why else would you bother with such a lousy set of numbers?

Maybe some people are blinkered and just want to "live the dream",

Good luck to him in his future enterprises, i sincerly hope he does not invest more than he can afford to lose.

I have met a disabled man in Bangkok a few years back who had his wheelchair stolen!

Not to mention the way thais view disabled people as bad Karma.

:jap:

[TheWalkingMan]

This does not sound like a good deal.

Just ask the owner's to provide the accounting books along with the tax reports and if they stall... forget it. It means that you will be buying a total mystery.

If possible, you should name the Soi of this business.

TheWalkingMan

Edit - I removed the question about which city.

Edited February 23, 2011 by TheWalkingMan

[Bedrockguesthouse]

based on my experience running a lease hold guesthouse i would assume this place cost will work out to around 245,000

per month all in. its all about room occupancy, room rate, year round. lets just say u have 50% occupancy year round and yr room rate

is 700 baht per nite. so thats 7 rooms at around 700 baht per nite by say 30nights which give u roughly 158,000 baht p/mth. yr total cost are 245,000

per month. Revenue from the bar/restaraunt really dont make u that much.

on top of this u still have to pay for a work permit if u can get one. 5 million baht purchasing goodwill. The goodwill should

be reflected in the accounting books. Its probably based on the numbers and some quick accounting one of the worst deals

i have seen and should not go ahead.

Of course just my 10 cents worth.

cheers mark