Financing For Foreigners In Thailand-Asset Rich But Cash Poor

[metisdead]

A profanity post has been removed as well as the replies.

[mccw]

It's true- A grumpy face and acting a hard arse stranglely seems to get results some times in the west. In here its a sure fire tactic to get smiled all the way out of the building empty handed.

[mccw]

About 1 person buying another the land; I don't think it matters at all. What matters is the collateral on the table , not where it came from.

If you put 20 rai on the table and I lend you half that value secured against the 20, then I'd lend you at 15% pa all day long. (If I were a bank- I'm not offering a loan here) the bank can easily sell the land and recover more than the loan amount.

[lemoncake]

About 1 person buying another the land; I don't think it matters at all. What matters is the collateral on the table , not where it came from.

If you put 20 rai on the table and I lend you half that value secured against the 20, then I'd lend you at 15% pa all day long. (If I were a bank- I'm not offering a loan here) the bank can easily sell the land and recover more than the loan amount.

Actually it does matter, because not so long ago government started to crack down on such arrangements, unless wife can show proof she had the money to buy the land

[taninthai]

Sitting on all them assets and not generating income from any off it is crazy imo,reminds me of a local thai whi was asking my misses for some help tonrent his land out last week,the guy has got 20 rai nor sor sam title, i told him to sell some of it answer no want to keep it in the family, this guy lives in a wooden shack the land would sell around the 1 million per rai mark, the guy could be richer than he ever dreamed of,i then told him build house on it then and sell it to the oldest ferang you can on a 30 year lease this went way over his head,he will never sell the land cause he dont want to end off.

Sent from my GT-P7500 using Thaivisa Connect Thailand mobile app

[mccw]

About 1 person buying another the land; I don't think it matters at all. What matters is the collateral on the table , not where it came from.

If you put 20 rai on the table and I lend you half that value secured against the 20, then I'd lend you at 15% pa all day long. (If I were a bank- I'm not offering a loan here) the bank can easily sell the land and recover more than the loan amount.

Actually it does matter, because not so long ago government started to crack down on such arrangements, unless wife can show proof she had the money to buy the land

Do you know even one example of some one loosing land this way?

More like you just read the same rubbish headline put out once a year every year for about the last ten years.

[mccw]

Sitting on all them assets and not generating income from any off it is crazy imo,reminds me of a local thai whi was asking my misses for some help tonrent his land out last week,the guy has got 20 rai nor sor sam title, i told him to sell some of it answer no want to keep it in the family, this guy lives in a wooden shack the land would sell around the 1 million per rai mark, the guy could be richer than he ever dreamed of,i then told him build house on it then and sell it to the oldest ferang you can on a 30 year lease this went way over his head,he will never sell the land cause he dont want to end off.Sent from my GT-P7500 using Thaivisa Connect Thailand mobile app

He sounds like a good man.

[lemoncake]

About 1 person buying another the land; I don't think it matters at all. What matters is the collateral on the table , not where it came from.

If you put 20 rai on the table and I lend you half that value secured against the 20, then I'd lend you at 15% pa all day long. (If I were a bank- I'm not offering a loan here) the bank can easily sell the land and recover more than the loan amount.

Actually it does matter, because not so long ago government started to crack down on such arrangements, unless wife can show proof she had the money to buy the land

Do you know even one example of some one loosing land this way?

More like you just read the same rubbish headline put out once a year every year for about the last ten years.

Personally , i do not. Everyone i know keeps everything in the company name, including myself.

Yes it was a few headlines, however if government issues this orders, it would be silly for banks not to follow up on it

[mccw]

About 1 person buying another the land; I don't think it matters at all. What matters is the collateral on the table , not where it came from.

If you put 20 rai on the table and I lend you half that value secured against the 20, then I'd lend you at 15% pa all day long. (If I were a bank- I'm not offering a loan here) the bank can easily sell the land and recover more than the loan amount.

Actually it does matter, because not so long ago government started to crack down on such arrangements, unless wife can show proof she had the money to buy the land

Do you know even one example of some one loosing land this way?

More like you just read the same rubbish headline put out once a year every year for about the last ten years.

Personally , i do not. Everyone i know keeps everything in the company name, including myself.

Yes it was a few headlines, however if government issues this orders, it would be silly for banks not to follow up on it

Its illegal to use a company solely for the purpose of by passing the land ownership laws and the seed capital / legitimacy of share holders is also spoken about many times by the government. I'd be more worried about them stripping companies of land than individual Thais because companies really are foreigners not Thais holding the land so its politically and legally much easier to do. To discriminate against Thai individuals owning land due to marriage to a foreigner would be really quite hard legally - the constitution court would probably throw out such a law if ever even enacted.

[lemoncake]

Its illegal to use a company solely for the purpose of by passing the land ownership laws and the seed capital / legitimacy of share holders is also spoken about many times by the government. I'd be more worried about them stripping companies of land than individual Thais because companies really are foreigners not Thais holding the land so its politically and legally much easier to do. To discriminate against Thai individuals owning land due to marriage to a foreigner would be really quite hard legally - the constitution court would probably throw out such a law if ever even enacted.

If and its a big IF, the company sole purpose is owning the house, in OP case its also a farm and farm equipment which is also prohibited to foreigners.

But since you seem to have the desire to help OP, you are welcome to offer him an "easy term" loan with "reasonable rates"

Let us know how you go recouping your money in a year

[mccw]

Its illegal to use a company solely for the purpose of by passing the land ownership laws and the seed capital / legitimacy of share holders is also spoken about many times by the government. I'd be more worried about them stripping companies of land than individual Thais because companies really are foreigners not Thais holding the land so its politically and legally much easier to do. To discriminate against Thai individuals owning land due to marriage to a foreigner would be really quite hard legally - the constitution court would probably throw out such a law if ever even enacted.

If and its a big IF, the company sole purpose is owning the house, in OP case its also a farm and farm equipment which is also prohibited to foreigners.

But since you seem to have the desire to help OP, you are welcome to offer him an "easy term" loan with "reasonable rates"

Let us know how you go recouping your money in a year

Yes - company owning a farm should be illegal.

Wife owning a farm in her name - not illegal.

A mortgage registered on the chanort can be enforced by court order - the banks do it all the time. So long as the capital at stake is significantly more than the loan + potential enforcement costs, then it should be easy enough to do. Not me, but a bank or local wealthy individual.

[lemoncake]

Its illegal to use a company solely for the purpose of by passing the land ownership laws and the seed capital / legitimacy of share holders is also spoken about many times by the government. I'd be more worried about them stripping companies of land than individual Thais because companies really are foreigners not Thais holding the land so its politically and legally much easier to do. To discriminate against Thai individuals owning land due to marriage to a foreigner would be really quite hard legally - the constitution court would probably throw out such a law if ever even enacted.

If and its a big IF, the company sole purpose is owning the house, in OP case its also a farm and farm equipment which is also prohibited to foreigners.

But since you seem to have the desire to help OP, you are welcome to offer him an "easy term" loan with "reasonable rates"

Let us know how you go recouping your money in a year

Yes - company owning a farm should be illegal.

Wife owning a farm in her name - not illegal.

A mortgage registered on the chanort can be enforced by court order - the banks do it all the time. So long as the capital at stake is significantly more than the loan + potential enforcement costs, then it should be easy enough to do. Not me, but a bank or local wealthy individual.

It is if the money obtained to purchase the farm came from a foreigner.even more so if the foreigner is working it

[mccw]

Yes

Of course a Thai consortium would be fine even with a falang share holder so long as the money in made sense to the proportion of shares when setting it up

[lemoncake]

Yes

Of course a Thai consortium would be fine even with a falang share holder so long as the money in made sense to the proportion of shares when setting it up

We have gone wayyyy offf topic, clearly bank does not see your point of view of things and this is the only thing that matters

[rgs2001uk]

Jesus H, all the guy has to do is go to a pawn shop, he talks about assets, does he really have assets that he owns outright or do they belong to a finance company.

Whether he is paying 20% per month or per year is a moot point, if the farm aint generating income no one will lend to him.

He may find he overpaid for the actual land, what is the land really worth?

Just because someone offers me land in the middle of Nakon Nowhere for half its value doesnt mean I am interested in it, may well take years to sell it.

I dont know why so many get suckered into buying land that can be rented for about 1,000 baht per rai per year.

100 rai of land = 100k baht rent per year, what is his return per rai per year, it may well take him about 20 years just to recoup his outlay.

Thaivisa, brilliant reading.

[mccw]

Yes

Of course a Thai consortium would be fine even with a falang share holder so long as the money in made sense to the proportion of shares when setting it up

We have gone wayyyy offf topic, clearly bank does not see your point of view of things and this is the only thing that matters

I've been offered such a loan myself (I mean my wife has), with out provable income, up to 50% of the collateral value. So your wrong; its not a legal or policy issue. I expect the problem lies with either the branch manager, the OPs attitude, OPs wife's ability to talk buisiness, or a combination of any of these.

[lemoncake]

Yes

Of course a Thai consortium would be fine even with a falang share holder so long as the money in made sense to the proportion of shares when setting it up

We have gone wayyyy offf topic, clearly bank does not see your point of view of things and this is the only thing that matters

I've been offered such a loan myself (I mean my wife has), with out provable income, up to 50% of the collateral value. So your wrong; its not a legal or policy issue. I expect the problem lies with either the branch manager, the OPs attitude, OPs wife's ability to talk buisiness, or a combination of any of these.

ok

Some tv posters, even get 100% loans from the bank at the age of 87

Edited April 6, 2013 by lemoncake

[mccw]

?

[Canada]

You guys are hilarious...!! A couple of points..... 106 rai of sugarcane. 3rd year. We are producing and earning income. All our land is chanote title. All is in wifes name. Most has usufruct registered on it for the term of the remainder of my life. She farms. I relax. We own everything outright. All of what we do is completely legal in its setup and in its operation. She has been to the bank(s) with me in the background. We can get a loan but it's a complicated process. You are right, I am looking for an easy solution at a good rate. I am too busy-"relaxing". As soon as we get our house built here on the farm (tiling and painting now, I'll have some time to actually pursue the financing. I actually don't need that much money. Operating and living expenses for the remainder of this year. 3-500,000 would do us quite well and we have a house and property in Chiang Mai to secure it...worth a realistic 4,000,000. I would pay 10% for a term of one year. Kasikorn wants 11.5. 15 is stupid, The land that my wife farms has appreciated 2-3 times it's purchase price in the last 2 1/2 years. Now you all have some more info to criticise and judge and theorise about whether it is true or how long it will take for wifey to up and take it all. Knock yourselves out gents.

One poster has touched a couple of good points. I do have a bit of an attitude problem, yes. I don't kiss anyone's ass for any reason. That does not help much in some scenarios but it is good for my sense of self esteem. Part of our problem is (as you put it), wife does not talk business well. She is a good woman and a smart one, but lacks the assertiveness required for some tasks. This is probably the crux of the problem. In any case, I'll solve this problem myself as soon as I get some time freed up.

Happy to have contributed to your sense of self esteem today which seems to come from criticising or belittling other people.

[taninthai]

Wow we are only 3 months into the year and you dont have any money for your operating or living costs for the rest of the year,thats a pretty desperate situation to be in and absolutely terrible planning hope it all works out for you.cant really see why you come on the forum to let everyone know what a mess your in if kasikorn has offered 11% there is your answer

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[Canada]

OP

My in laws have taken loans against existing assets based on past farming income and asset value. Its quite common. I don't know why your facing such problems. Maybe because you are a falang. Try sending just your wife if she is the title holder. Or her and a relative who's maybe similar loans.

Or sell something.

How much do you need and for what?

To see through the gap between harvests or you have a hole that isn't easy to fill? Like on going medical problems? If the latter a serious think about total plan / situation maybe needed before running up debts and slowly loosing everything.

Living and operating expenses for the remainder of the year. We overspent. Bought a piece of land that I shouldn't have. Cleared it and planted it and the cane looks really good so we really don't want to firesale it. But the spending is almost finished. House is 90 %. All of our plots have wells and pumps and our cane is healthier than most around here. It has been very dry this year. Many plots in the area are dying from the drought. We have all our own equipment and hire labour help as needed. We expect a conservative return of 1.5 m baht between Nov and Feb.

This all started with trying to manage the farm from Chiang Mai. We gave it 2 years. It was not working well so we moved here in Nov and have been on a mission to get a house built and do the farming. There were no wells on our property(ies) when we got here. We have drilled 7 now. We have bought a tractor, all the attachments,.....etc. We have gone through about 4m baht in 5 months. We are just about at the point where we can relax and just live....soon as the rains start..... just ran out of money sooner than we expected.

There are a few solutions available to this problem. I am just looking for the least painful of them. That would be an easy, small loan at a reasonable rate with property as collateral, payment due in a year with no payments until the due date. A bit of a fantasy- yes, but I have learned that if you don't ask, you certainly won't get it.

Anyways cheers....have a good day.

[Canada]

Wow we are only 3 months into the year and you dont have any money for your operating or living costs for the rest of the year,thats a pretty desperate situation to be in and absolutely terrible planning hope it all works out for you.cant really see why you come on the forum to let everyone know what a mess your in if kasikorn has offered 11% there is your answer Sent from my GT-P7500 using Thaivisa Connect Thailand mobile app

Yes, absolutely terrible planning. You are right. As far as letting everyone know what a terrible mess I am in.....no, it hasn't got to that point yet (of being a terrible mess). In any case, I don't get my self esteem from others so it has no real effect on me what they think. It's the guy who is too embarrassed to ask for help that is the fool, not the guy who admits his errors and asks for help.

[britgent]

Sitting on all them assets and not generating income from any off it is crazy imo,reminds me of a local thai whi was asking my misses for some help tonrent his land out last week,the guy has got 20 rai nor sor sam title, i told him to sell some of it answer no want to keep it in the family, this guy lives in a wooden shack the land would sell around the 1 million per rai mark, the guy could be richer than he ever dreamed of,i then told him build house on it then and sell it to the oldest ferang you can on a 30 year lease this went way over his head,he will never sell the land cause he dont want to end off.

Sent from my GT-P7500 using Thaivisa Connect Thailand mobile app

He sounds like he is taking care of future generations the proper way and is far smarter than yourself.

Sent from my i-mobile IQ 6A using Thaivisa Connect Thailand mobile app

[billaaa777]

WOW, I just read this whole thing, I don't know why.

Being a CPA, I had to do some calculations.

You said that Kasikorn offered you a loan at 11.5%, but you want 10%.

The difference in your interest expense for a 500,000 BAHT loan, with no payments made except the final one would be less than 8,000 BAHT.

Did you know that?

If not, now you do, and you should take it.

Most loans require monthly payments for a good reason.

It signifies the borrower’s ability to fulfill their financial obligations and manage their money properly.

If the bank required monthly payments, and you are not capable of making them, that is a good reason for you not taking that loan.

However, you should also acknowledge that fact, and be more than willing to accept a much higher rate because the risk is much higher for the institution or individual providing the capital for the loan.

[NeverSure]

OP

My in laws have taken loans against existing assets based on past farming income and asset value. Its quite common. I don't know why your facing such problems. Maybe because you are a falang. Try sending just your wife if she is the title holder. Or her and a relative who's maybe similar loans.

Or sell something.

How much do you need and for what?

To see through the gap between harvests or you have a hole that isn't easy to fill? Like on going medical problems? If the latter a serious think about total plan / situation maybe needed before running up debts and slowly loosing everything.

Living and operating expenses for the remainder of the year. We overspent. Bought a piece of land that I shouldn't have. Cleared it and planted it and the cane looks really good so we really don't want to firesale it. But the spending is almost finished. House is 90 %. All of our plots have wells and pumps and our cane is healthier than most around here. It has been very dry this year. Many plots in the area are dying from the drought. We have all our own equipment and hire labour help as needed. We expect a conservative return of 1.5 m baht between Nov and Feb.

This all started with trying to manage the farm from Chiang Mai. We gave it 2 years. It was not working well so we moved here in Nov and have been on a mission to get a house built and do the farming. There were no wells on our property(ies) when we got here. We have drilled 7 now. We have bought a tractor, all the attachments,.....etc. We have gone through about 4m baht in 5 months. We are just about at the point where we can relax and just live....soon as the rains start..... just ran out of money sooner than we expected.

There are a few solutions available to this problem. I am just looking for the least painful of them. That would be an easy, small loan at a reasonable rate with property as collateral, payment due in a year with no payments until the due date. A bit of a fantasy- yes, but I have learned that if you don't ask, you certainly won't get it.

Anyways cheers....have a good day.

I can't say I agree with your business plan, but I do agree that "The answer is always 'No' until you ask."

[yoshiwara]

Assuming that the OP's forward projections are confident (percentage assessment of returns delivering?) and are assessed at a very low risk level AND a loan is available (in effect a bridging loan) then the argument is purely about the rate of interest. A 20% interest rate is not so unreasonable given that it is a bridging loan and it is not unusual for a business to have liquidity issues. Actually there are a significant number of businesses in the west which have been confronted with banks less inclined to support liquidity problems. In retrospect 20% if it available is better than a 10% loan which is not. Swallow it and get on with it.

[ThaidDown]

Most has usufruct registered on it for the term of the remainder of my life.

I would suggest that is the reason the banks are reluctant to lend.

In case of default the lender would not be able to realise the value of the land with you sitting on it for the rest of your life.

ie the wife does not have full unencumbered title to the land.

Edited April 7, 2013 by ThaidDown

[Canada]

Most has usufruct registered on it for the term of the remainder of my life.

I would suggest that is the reason the banks are reluctant to lend.

In case of default the lender would not be able to realise the value of the land with you sitting on it for the rest of your life.

ie the wife does not have full unencumbered title to the land.

You are right about that. Nobody will touch anything that has my name on it. We have a couple of pieces that I have not bothered to attach myself to..... if we went ahead with a bank loan option.

Billaaa777.....if they approved the loan....it would be at 11.5%..... requirements to get the loan are difficult for us at this time as we have no real history of sales. The last two years, we have sold to a sugar broker. Everything is cash. We hope to cut and sell direct to the factory this year although this is a difficult route to go and may be too soon for us, given our cash problems this year. We have not made this decision yet. I was not terribly interested in 11.5 because Bankok Bank suggested a rate of closer to 7% when I approached them at my home branch in Chiang Mai late last year. I have seen this problem coming for quite some time, just have not had the time to go and do something about it. We are approaching a big sigh of relief in terms of the work load diminishing (for the wife...I just relax and watch), and we will have time to address this issue.

Thanks for everyone's replies. Nobody has really offered a solution that I haven't considered already. I was really just checking for other options that I may not have thought of. For your info, I'll likely just use my visa as I need it, make payments from savings left at home, and just ride this out till we sell the sugar next year. Using visa as I need it will reduce interest rate somewhat as the principal will start small and increase with time in comparison to borrowing a lump sum and paying interest on the whole principal for the entire length of the term. This will also eliminate the need to jump through the hoops required to get a bank on board.

Edited April 7, 2013 by Canada

[Canada]

OP

My in laws have taken loans against existing assets based on past farming income and asset value. Its quite common. I don't know why your facing such problems. Maybe because you are a falang. Try sending just your wife if she is the title holder. Or her and a relative who's maybe similar loans.

Or sell something.

How much do you need and for what?

To see through the gap between harvests or you have a hole that isn't easy to fill? Like on going medical problems? If the latter a serious think about total plan / situation maybe needed before running up debts and slowly loosing everything.

Living and operating expenses for the remainder of the year. We overspent. Bought a piece of land that I shouldn't have. Cleared it and planted it and the cane looks really good so we really don't want to firesale it. But the spending is almost finished. House is 90 %. All of our plots have wells and pumps and our cane is healthier than most around here. It has been very dry this year. Many plots in the area are dying from the drought. We have all our own equipment and hire labour help as needed. We expect a conservative return of 1.5 m baht between Nov and Feb.

This all started with trying to manage the farm from Chiang Mai. We gave it 2 years. It was not working well so we moved here in Nov and have been on a mission to get a house built and do the farming. There were no wells on our property(ies) when we got here. We have drilled 7 now. We have bought a tractor, all the attachments,.....etc. We have gone through about 4m baht in 5 months. We are just about at the point where we can relax and just live....soon as the rains start..... just ran out of money sooner than we expected.

There are a few solutions available to this problem. I am just looking for the least painful of them. That would be an easy, small loan at a reasonable rate with property as collateral, payment due in a year with no payments until the due date. A bit of a fantasy- yes, but I have learned that if you don't ask, you certainly won't get it.

Anyways cheers....have a good day.

I can't say I agree with your business plan, but I do agree that "The answer is always 'No' until you ask."

Plan??

[ThaidDown]

Maybe you would get a more sympathetic hearing at BAAC. ( of course you may have already thought of that and been rejected.)