Borrowing To Buy Pattaya Real Estate

[sharecropper]

I received the below suggestion from a well-established agent in Pattaya as part of a newsletter.

I can think of plenty of reasons NOT to, and I never would, but I'm just wondering has anyone actually done this - secure Thai real estate loans against UK or (elsewhere) share portfolios, and if so, how did it work out for you?

This month, our associated expatriate financial advisory company has mentioned the possibility of borrowing money, with a view to spending it on real estate in Thailand, secured against investment portfolios you may have overseas. While you would need to have a relatively safe investment portfolio to qualify, the obvious upside is that while you borrow money against it, it will continue to provide you with the same returns as normal. If you would like to discuss this with a Partner from our associated company, please just let me know.

[prefabs]

Real Estate agents getting desperate. Always some poor dupe will fall for it though.

[JMS]

Who are the 2 companies offering this as how do you define a safe portfolio. Is it the financial guy who has about as much knowledge as me in these matters or his thai wife. What a load of C@@@. Any body falling for this is off their head. Desperate comes to mind

[gk10002000]

READ what it says. It says You must have a relatively safe portfolio to qualify. That means they are going to lend you money, and you probably have to put up your portolio as collateral. I can barely imagine the fine print in the loan.

The bottom line is they will probably "legally" at some point grab your portfolio, and I bet the loan you get probably never even gets issued, or is issued in some crazy installment plan or gets called with some incredibly stiff penalty due to things beyond your control. So then you would owe them the balance of the loan plus interest, and I am sure there will be some huge early payment penalty.

This doesn't even address the possiblity of a total up front scam where they get all your portfolio information (which of course they must check and verify very thoroughly) and then just access or steal it right then.

Gosh don't do whatever it is these people are suggesting.

Just a critical and skeptical Test Engineer's opinion as he gets within about one year from retiring.

[outofoz]

Just give me your share portfolio...it'll be less complicated and cheaper for you in the end....and u can be assured that u can trust my complete honesty in my intention to give u nothing back

[Darrel]

Sounds like a real downhill path, paved with lies and landmines.

I would never put a penny into property in Thailand that I couldnt afford to lose completely.

[92302]

No one can "afford" to lose property.

[tailspin]

sounds incredibly risky.....the property itself is usually sufficient collateral(but not in LOS)....why not invite this company to post the information here in detail for perusal by the TV expert analysts...should be entertaining

[luudee]

Sounds like a real downhill path, paved with lies and landmines.

I would never put a penny into property in Thailand that I couldnt afford to lose completely.

You are a wise man Darrel !

OP, think about it if the table would be reversed, would you

lend money without the reassurance of recovering it (plus some) ???

I am sure everything is possible. Heck, I lend you money in

Thailand if you provide collateral in Europe or US !

Cheers,

rudi

[JMS]

Come on Sharecropper name them

[sharecropper]

I think you'd have to be crazy to want to risk a safe portfolio of shares (probably invested in non-Thai companies, back home, and probably paying you a dividend, with which to enjoy your retirement or life here or having built up capital gains) to throw it on the roulette table of Pattaya real estate.

Who's buying right now? Not the Indians, Arabs and Russians, in any significant numbers, when set against all the "investment" properties bought in the glory years which are still lying unsold or unlet.

Even if you are a seller at a rock bottom price, there is no guarantee the buyers will be there, given the abundance of properties on discount deals around the town. It is truly a buyer's market and will remain so for a long time, in spite of the talking up of its prospects by realtors.

Maybe a better business idea would be to buy out, at rock bottom prices, the people who own these properties, offering them safer shares in good overseas companies. There's still a risk, but less than the one Pattaya's dead real estate market offers.

The old buyers from Europe and the US and Oz, ready to uncritically pour money into Pattaya real estate market believing it was a one way bet (I mean up) have long gone, so unless you were buying to live in your dream home, I can't imagine anyone buying into Pattaya real estate as an investment right now, except perhaps with a 10 year view.

And even then your money would be better employed elsewhere for 10 years, instead of having unlet units, service charges, maintenance costs and the ever-increasing supply of new developments coming onto the market, which would see further erosion of your "investment".

Or am I being too negative? Is there a good argument to be made for investing in Pattaya with a view to making a meaningful profit on individual units/houses?

Maybe a realtor member could come on and make that case.

[sharecropper]

Come on Sharecropper name them

Let any of them come on to make the case for investment in Pattaya real estate as being a good economic investment, preferably set against what that money could do/have done for you in, say European blue-chip stocks, over the past 5 years, and I will be happy to read it.

I don't believe any realtor can make that argument, which says it all about the state of the market

I am excluding people buying to live in their own place, which I accept is not necessarily an investment decision, and not what I'm talking about here.

[Darrel]

Even if you are a seller at a rock bottom price, there is no guarantee the buyers will be there, given the abundance of properties on discount deals around the town.

Having spent some time watching resales here, I would say that if you undercut the average asking price for similar units by about 25-30% then you will find a buyer reasonably quickly, though nowhere near as quickly as I would have expected.

That said, several of such units that I have seen recently, once sold, have just gone straight back on the market at the average asking price, presumably having been bought by a "Pattaya Flipper".

[lonewolf99]

Hot of the press.......Several (I cannot name them) developers are in deep trouble and close to defaulting with the banks.

If you think Jomtien Beach has an over supply of Condos now...just watch what is about to happen down the new 2nd road...they have already started clearing jungle just past the junction of Soi 11.....where / when will the madness all end ???

Edited August 1, 2011 by lonewolf99

[englishinsiam]

I was an esate agent in Spain during the boom years and did very well until the market crashed overnight.

One day we could get Mortgages for clients the next day none.

I am going to buy in Pattaya but it will be a family home. So for us it's not about making cash although we aren't stupid enough to pay what we don't consider is a fair price.

We are probably going to buy on a nice development in East Pattaya the developers have already offered us 200K off the asking price I think there is room for another 300K then we will have real value.

There are bargains to be had you just have to walk away and let them come to you.

If you are buying property in Thailand then you have to consider all of the following before parting with your cash.

1 - Do I need to rent it out to pay for it?

If yes then don't buy

2 - If all goes wrong will I be destitute?

If yes then don't buy

3 - I want to sell in 2-3 years to make some money

If yes don't buy - You are looking at a minimum of 10 years before you can get any kind of decent return.

Also here is a tip if you are buying off a foreigner who bought at a very good exchange rate before suggest they take less for it now to sell and repatriate the funds.

i.e. British person bought at 75 Baht to £ for 3,000,000 Baht cost was £40,000 4 years ago approx.

They agree to sell to you for 2,800,000 and remit the money to UK they get £58,333 at the current 48 baht to £

The actual Baht price is irrelevant if they brought the money into Thailand and are sending it out of Thailand.

[prefabs]

Sorry for the double post.

This month, our associated expatriate financial advisory company has mentioned the possibility of borrowing money, with a view to spending it on real estate in Thailand, secured against investment portfolios you may have overseas. While you would need to have a relatively safe investment portfolio to qualify, the obvious upside is that while you borrow money against it, it will continue to provide you with the same returns as normal. If you would like to discuss this with a Partner from our associated company, please just let me know.

I think we have missed an opportunity by not taking advantage of the offer of a chat with this guy. Should be lots of fun if he ever does get contacted

[hotandhumid]

The wording "our associated expatriate financial advisory company" is enough to raise red flags. In other words,aforementioned complete BS.

Yep.

[sharecropper]

Sorry for the double post.

This month, our associated expatriate financial advisory company has mentioned the possibility of borrowing money, with a view to spending it on real estate in Thailand, secured against investment portfolios you may have overseas. While you would need to have a relatively safe investment portfolio to qualify, the obvious upside is that while you borrow money against it, it will continue to provide you with the same returns as normal. If you would like to discuss this with a Partner from our associated company, please just let me know.

I think we have missed an opportunity by not taking advantage of the offer of a chat with this guy. Should be lots of fun if he ever does get contacted

You'd have thought they would have come on here by now, and explained why Pattaya real estate investment IS a great idea, and promoted their scheme - if it was such a great idea.

As it is, I think we ars entitled to assume there are no realtors with the ability or the brains (or maybe, just maybe the dishonesty?) to put up an argument for investing here, let alone ruining yourself to do it.

Avoid.

[Darrel]

Several (I cannot name them) developers are in deep trouble........

That's easy to say but without names it's a bit pointless.

If you think Jomtien Beach has an over supply of Condos now...just watch what is about to happen down the new 2nd road..

About to happen? What about the buildings already in construction on Pratumnak and in Pattaya?

Lots of new units coming over the next 3 years, but lots of empty ones around already.

[vpi78]

No one can "afford" to lose property.

What? Any investment is a risk and every seasoned investor knows about the risks. Thailand happens to have a lot more risks. Some can tolerate them and some do not. But no big reward comes without taking risks.

If you cannot afford to take a risk, e.g., lose a property then stay away. Do you even own a property other than your own residence? Oh, you probably rent that too.

[SGD]

If you are renting and paying 20k a month, then borrowing money and paying anything less than 20k a month on a mortgage would seem very astute, if the deposit was not too large. Of course, improve the maths by factoring in the return on your deposit invested elsewhere but overall, if you need somewhere to live and you are paying rent, then the maths often works in your favour.

[Darrel]

"Where there's muck there's brass." [/i]?

Besides which, Pattaya is quite nice and fairly cheap to live in.

For try Phuket, where you cant even get around town on public transport without being ripped off.

Edited August 3, 2011 by Rimmer
quoted reply removed also text edited, sorry Darrel

[Rimmer]

Thank you for your negative and profane comments about Pattaya greystag52 which has now been deleted.

[sharecropper]

In the absence of any self-respecting Pattaya real estate agent writing to defend investing in the clearly dodgy real estate market here, this article in the Nation goes some way to advancing an argument, although I think it's rubbish, and just because a "fun-loving" snooker star is given one as a quid pro quo for being used in marketing, I am still not convinced.

From The nation.

Snooker star buys home

http://www.nationmultimedia.com/home/Snooker-star-buys-home-30160045.html

CB Richard Ellis noted that there is strong foreign demand in Pattaya [for The Palm] driven mainly by non-resident Europeans, particularly Russians who are looking to purchase affordable luxury holiday homes. There is also a significant portion of Thais who have purchased for a combination of a holiday home and as an investment, with several purchasing multiple units as the project is perceived as offering value for money.

It noted that this shows Pattaya bouncing back again to become a hot spot for condominium buyers.

"In CBRE's view, Pattaya's strategic location will continue to be a key driver for growth in tourism and its property market. It is the closest beachside town to Bangkok and is just over an hour's drive, it has all the amenities one wants - shopping, good food, quality five-star hotels and properties, golf courses, and beaches. These factors combined makes Pattaya well positioned for further growth," the consultant firm said in the statement.

This stuff writes itself, with no serious regard to how the city really is, or the state of the real estate market.

[Darrel]

sorry Darrel

No problem.

May as well delete my whole reply, and this one, as without the original deleted comment they dont make much sense.

[Darrel]

CBRE said: "In CBRE's view, Pattaya's strategic location will continue to be a key driver for growth in tourism and its property market. It is the closest beachside town to Bangkok and is just over an hour's drive, it has all the amenities one wants - shopping, good food, quality five-star hotels and properties, golf courses, and beaches. These factors combined makes Pattaya well positioned for further growth," the consultant firm said in the statement.

Given that CBRE are the sole agent for some of the upmarket condo buildings in Pattaya, one would hardly expect them to say anything less.

[SGD]

My support of borrowing to purchase property is purely mathematical and mostly based on personal occupation rather than outright investment. Were the topic to move to those selling property, I do not have a good word to say about any of them, though some are worse than others. All are liars whilst some are downright frauds.

[Rimmer]

One post discussing moderation has been removed

[TJo]

The fact that the lenders are not prepared to use the actual property as security tells you everything you need to know about the value of real estate here. There are no buyers, so it is all effectively worthless, other than as a space to park yourself in.

[prefabs]

The fact that the lenders are not prepared to use the actual property as security tells you everything you need to know about the value of real estate here. There are no buyers, so it is all effectively worthless, other than as a space to park yourself in.

Korrect