How To Make Money In Issan 2

[doglover]

I thoroughly enjoyed reading the posts from "How to make money in rural Thailand/Issan". And I may try my hand at farming someday. I am more attracted to real estate and also enjoy doing home renovations. It seems to me the ROI in Thailand as far as apartments and single family dwellings is not near as good as in North America as far as rental units goes. The idea of Uni housing for students was discussed specifically for Thailand but my interest lies in house flipping as I am a craftsman and enjoy DIY projects. I have noticed that lack of maintenance in Thailand is not only on the farm equipment but also dwellings. So I see the possiblility of making some money from flipping not in market appreciation but in clean up and fixing up of properties. I realize the general lack of craftmanship with Thai builders and have a solution to that. Just curious what the thaivisa community has to say about this. Thanks for any input, positive or negative.

[Brandx]

I’m curious to know your solution to Thai builders lacking crafting skills, apart from sending them back to school. The only skills they seem to have are:-

How to take short cuts..

How to bodge things up.

How to misuse or break Farang tools.

There are some reasonable ones out there, but you have to watch them all the time. I wouldn’t let another Thai guy - even family – work in my house again unsupervised.

BTW please explain what you mean by "flipping"?

Sounds like something British MPs do!

[Scully]

Flipping is buying a property doing it up then selling for a profit. Thai people always prefer to buy land and build their own home to their own specification, there is no such thing as planning permission, building regs etc.

In Isaan I often see perfectly good houses knocked to the ground then rebuilt to a"slightly" higher standard, I live in an old thai house and after some TLC it's perfect ie proper gypsum ceilings, european bathroom etc etc.

I think there could be a market for flipping however the building methods in Thailand are incredibly easy and incredibly cheap, one breeze block thick skimmed with cement and electrics very basic.

[slapout]

The Thai contractor who built 3 houses for us does what you propose. Most of the flipping is on bank repo homes on which some individual has a interest. They and the contractor get together prior to auction of property, come up with a fixed price for renovation and then the interested party will will submit a bid dependent on what he thinks he will have in the property prior to putting it on the market The contractor has not gotten in to the market as you foresee due to lack of cash to put up front on repairs.

They seem to work with 1.2 + million baht houses in established moo bans. The repair cost are usually under 150,000 baht.

[cardholder]

Agree that Thais are not into refurbs. They would rather knock down and start again.

Be warned about making money in Isaan. A friend told me "If you want to make a million (Baht) in Isaan - start with 2 million" !

[doglover]

Flipping is buying a property doing it up then selling for a profit. Thai people always prefer to buy land and build their own home to their own specification, there is no such thing as planning permission, building regs etc.

In Isaan I often see perfectly good houses knocked to the ground then rebuilt to a"slightly" higher standard, I live in an old thai house and after some TLC it's perfect ie proper gypsum ceilings, european bathroom etc etc.

I think there could be a market for flipping however the building methods in Thailand are incredibly easy and incredibly cheap, one breeze block thick skimmed with cement and electrics very basic.

Makes sense what you say about Thais having a strong preference to buying raw land or knocking down the house. I guess that's why there doesn't seem to be any real estate agents up here. I wonder if that stems from the lack of curb appeal and shoddy builders..... Maybe it's the face generated buy building new similar to buying a new car which so many Issanians prefer.... Building methods are very cheap and simple here in Issan along with the lacking of building codes, (which is why flipping is attractive to me) but that doesn't stop the neglect of maintenance which runs the properties down.

[doglover]

The Thai contractor who built 3 houses for us does what you propose. Most of the flipping is on bank repo homes on which some individual has a interest. They and the contractor get together prior to auction of property, come up with a fixed price for renovation and then the interested party will will submit a bid dependent on what he thinks he will have in the property prior to putting it on the market The contractor has not gotten in to the market as you foresee due to lack of cash to put up front on repairs.

They seem to work with 1.2 + million baht houses in established moo bans. The repair cost are usually under 150,000 baht.

That is exactly what I had in mind was the bank repo's primarily in that price range. In my opinion 1 million + is where Thais seem to start caring about curb appeal and such. Thanks for the reply. I know of some people on the investor side of this scenario here in Kalasin who did well at this but it became to slow for them from what I understand. They relocated there flipping to Pattaya with success and faster turnover with all the foreigners and realators. The nice thing with so many of us migrating to Issan is that if the resale was going slow the property could always be rented out to a farang who may take care of the property better than a local along with possibly timely payments.

You have obviously found a contractor you like. May I ask? Are your 3 properties for personal use or are they rentals? I haven't crunched numbers, and am a rookie as far as property investing goes, but seems like a ballpark 40 year ROI for rental properties in Issan.

[slapout]

Of the 3 personal properties, 1 has been sold, 1 is personal residence, 1 is rental. The latter is a initial investment total of 800,000 with monthly rental of 6,000. The latter was flipped, the other two were built from the ground up.

The contractor mentioned realizes that 1,200,000+_ price homes are middle income family potential. both working, they can qualify for bank loan and he gets his cash for flipping up front. Puts nothing into the purchase price and walks away. Otherwise he lets the purchaser handle bank, etc, they just have to be capable of paying him when site is move in ready. (he works on installment payments as work progresses) It works as he has crews doing new construction, and the crews are used on an, when available basis for the flipped homes.