actiondell4 Posted April 19, 2011 Share Posted April 19, 2011 I see there is a bar guesthouse advertised in one of the magazines for sale at 11.25 million baht,NOT freehold,just the business. This business is in Soi Bukcow on the main drag near oasis go go,but for the life of me I cannot remember the name,starts with a "W",winchesters? Sorry cannot rember. Its serves english breakfasts,great food ,i think even open 24 hours. Anyhow its for sale,never in my time have I saw such a price for a business in Pattaya without including the building/freehold. 11.25 million baht if anyone is interested. Who here would pay that? Link to comment Share on other sites More sharing options...
manarak Posted April 19, 2011 Share Posted April 19, 2011 do you really believe businesses get sold at the published asking price??? Link to comment Share on other sites More sharing options...
actiondell4 Posted April 19, 2011 Author Share Posted April 19, 2011 do you really believe businesses get sold at the published asking price??? If your willing to pay it,yes. Link to comment Share on other sites More sharing options...
striderman Posted April 19, 2011 Share Posted April 19, 2011 near oasis starts with a W. Witherspoons? Link to comment Share on other sites More sharing options...
actiondell4 Posted April 19, 2011 Author Share Posted April 19, 2011 Yes thanks Striderman,Witherspoons,a fantastic place for good food,good drinks. and great companionship. I dont know about buying it though. You certainly would have to have a lot of hospitality experience. Link to comment Share on other sites More sharing options...
manarak Posted April 19, 2011 Share Posted April 19, 2011 do you really believe businesses get sold at the published asking price??? If your willing to pay it,yes. *facepalm* Link to comment Share on other sites More sharing options...
LennyW Posted April 19, 2011 Share Posted April 19, 2011 Over and above that there will be a hefty monthly rent too!! Link to comment Share on other sites More sharing options...
terrychris Posted April 19, 2011 Share Posted April 19, 2011 Over and above that there will be a hefty monthly rent too!! I have a good idea and if u buy the building i think it will be around 7 million baht then kick out the tenant and its all yours ,is that good thinking????????????? Link to comment Share on other sites More sharing options...
manarak Posted April 19, 2011 Share Posted April 19, 2011 Over and above that there will be a hefty monthly rent too!! I have a good idea and if u buy the building i think it will be around 7 million baht then kick out the tenant and its all yours ,is that good thinking????????????? not really. to sell for 11 mio asking price there has to be a pretty good lease agreement in place, so you've got to wait a long time before kicking the tenant out. Link to comment Share on other sites More sharing options...
koiwaolao Posted April 19, 2011 Share Posted April 19, 2011 Over and above that there will be a hefty monthly rent too!! And maybe KEY MONEY too? Link to comment Share on other sites More sharing options...
Darrel Posted April 19, 2011 Share Posted April 19, 2011 "11.25 million baht if anyone is interested." There was a place very near Soi Buakow in one of the online classified ad sites the other day for just two to three hundred thousand. Seems more in touch with reality. Not that I would buy either at any price. Link to comment Share on other sites More sharing options...
xbusman Posted April 19, 2011 Share Posted April 19, 2011 If a careful audit of the books with due diligence indicated that it was able to net around 4 million a year, it would at least be worth looking into. Businesses are very hard to evaluate, its not like real property with comparable market values and measurable dimensions. In the end, its the ROI that matters and risk involved to make it happen. Could be worth 1 million, could be worth 100 million, no way of knowing until you crunch the numbers and determine their relative reality. I looked into some of the businesses down on Sukhumvit back in the heyday. I was surprised at how much gross revenue poured through their registers, and that was the declared bit. Sat in the bars for many days and counted the customers and drinks, then later compared it to receipts and they were only declaring about half. Not that the other half was income though, I would guess it went to the local police mainly. Books in Thailand are some of the murkiest in the world, but I was still amazed at the amount of verifiable receipts. Lets say Witherspoons has a four year lease, and all fixtures are completely paid in full. If they have been netting 3 million a year, or around 250,000 per month average after paying an owner/manager 100,000 per month, then a 11 million baht investment would return about 10% on your investment. You get your original capital back in four years and the residual has to be worth something even if the lease is not renewed. That would be a reasonable deal, not great but reasonable. Where it would really pay off is in year five if you made it there. No capital investment and steady income of 100K with a 3 million bonus when you close the books at year end. Keep it going for twenty years and it will be a brilliant life changing investment. The real question is do you want to invest in Thailand with a four to ten year time horizon when visa rules, company rules, tax rules, change like the color on a jing jok. Do you want to bet that the customer base for Witherspoons will grow over time, maintain or shrink. The one rule for any investment in Thailand is never invest more than you can walk away from and there are plenty of people around who can easily walk away from 11 million baht if things go south. Hard to say if anything is worth any price until you do careful and complete due diligence. Link to comment Share on other sites More sharing options...
ESB7 Posted April 20, 2011 Share Posted April 20, 2011 If a careful audit of the books with due diligence indicated that it was able to net around 4 million a year, it would at least be worth looking into. Businesses are very hard to evaluate, its not like real property with comparable market values and measurable dimensions. In the end, its the ROI that matters and risk involved to make it happen. Could be worth 1 million, could be worth 100 million, no way of knowing until you crunch the numbers and determine their relative reality. I looked into some of the businesses down on Sukhumvit back in the heyday. I was surprised at how much gross revenue poured through their registers, and that was the declared bit. Sat in the bars for many days and counted the customers and drinks, then later compared it to receipts and they were only declaring about half. Not that the other half was income though, I would guess it went to the local police mainly. Books in Thailand are some of the murkiest in the world, but I was still amazed at the amount of verifiable receipts. Lets say Witherspoons has a four year lease, and all fixtures are completely paid in full. If they have been netting 3 million a year, or around 250,000 per month average after paying an owner/manager 100,000 per month, then a 11 million baht investment would return about 10% on your investment. You get your original capital back in four years and the residual has to be worth something even if the lease is not renewed. That would be a reasonable deal, not great but reasonable. Where it would really pay off is in year five if you made it there. No capital investment and steady income of 100K with a 3 million bonus when you close the books at year end. Keep it going for twenty years and it will be a brilliant life changing investment. The real question is do you want to invest in Thailand with a four to ten year time horizon when visa rules, company rules, tax rules, change like the color on a jing jok. Do you want to bet that the customer base for Witherspoons will grow over time, maintain or shrink. The one rule for any investment in Thailand is never invest more than you can walk away from and there are plenty of people around who can easily walk away from 11 million baht if things go south. Hard to say if anything is worth any price until you do careful and complete due diligence. Which agent do you work for...key money or whatever is money down the drain...11mil, that could buy 2 units with complete fittings and its yours......lost count of the people think they can spin a business for millions only to find out that are the stupid one and not the people they are trying to con Link to comment Share on other sites More sharing options...
Basil B Posted April 20, 2011 Share Posted April 20, 2011 Xbusman, very good reply but I would also suggest anyone considering buying a business should conceder if the business was such a gold mine what made it tick? Remember you are buying the fixtures, fixings, stock, good will and a part used lease. The person selling may be the businesses biggest asset and the the next biggest asset may be the staff who probably will want a substantial pay rise if they have not already found other employment, probably not that far away and will take customers with them... 11mil, even in THB is a lot of money to loose, and you do not need to be a member of Mensa to work out of the non Thais who buy a bar most sink very quickly, some manage to tread water for a while, but very few survive. Link to comment Share on other sites More sharing options...
xbusman Posted April 20, 2011 Share Posted April 20, 2011 Well, first off I dont work for any agents. Only relating my experience from buying and selling businesses over the years. ESB7, you have absolutely no idea whats involved with the 11 million price until you look at the books and review the financials. Making guesses as to what a company is worth from seeing an internet price is rather specious. Yes, you could buy two units for 11 million with complete fittings but again, whats the ROI on property in Thailand. My research has led me to believe that generally property is a very poor investment here BUT given the right property at the right price and it might be great. Its all about the numbers to start with. If those work, then there are a million other questions that should be answered but seldom are. I agree with Basil that you better know why and how the numbers worked out in the financials, what made it tick. Best if you can keep the current owner around for at least a year or so to keep the continuity and learn all the details. Biggest mistakes I ever saw was the purchase of a business and complete disregard for the prior owner to the point of confrontation. Thats assuming the operation was profitable, if they were losing money it might be better to give them walking papers. I think you are right, most of the bars are money pits run by inexperienced retirees who have other things on their mind. I dont think 11 million baht is a lot of money to lose even though I dont have 11 million baht I can comfortably lose. For people experienced in buying and selling businesses it is pretty small potatoes. For the inexperienced it could be a costly course in their higher education. In any event, this is all just jawboning. Have to look at the books and see what the numbers say first. Nine times out of ten its not even worth doing due diligence and in Thailand its probably more like 99 out of 100. Link to comment Share on other sites More sharing options...
NALAK Posted April 20, 2011 Share Posted April 20, 2011 Audit of the books work out how many beers and breakfast have to sold you get that money back in one of Pattayas cheapest beer price areas. obviously not making a fortune or would not change hands so often Link to comment Share on other sites More sharing options...
Langsuan Man Posted April 21, 2011 Share Posted April 21, 2011 First question should always be WHY are they selling ? If it was / is such a gold mine, who in their right mind would sell Sort of like "financial advisers", if they knew anything they wouldn't have to work as financial advisers Link to comment Share on other sites More sharing options...
xbusman Posted April 21, 2011 Share Posted April 21, 2011 There are lots of legitimate reasons for an owner to sell a successful business. Retirement, illness, cash flow (capitalization) problems, etc. For every possible real reason, there are usually 100 dodgy ones. In my experience, a real ongoing profitable concern with good reasons for the sale seldom get to the point of being advertised. Usually people close to the owner know the real score and a deal is worked out well in advance of being advertised. Anything that needs to be advertised and actively flogged should raise the spidey senses up a few notches. Link to comment Share on other sites More sharing options...
Danlo Posted April 25, 2011 Share Posted April 25, 2011 Considering the lease was purchased for about 3 mill just over a year back the value seems to have soared ? Link to comment Share on other sites More sharing options...
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