Retire on 2.5 million baht = $69,903 / £48,908 / $98,281 (AUS)

[Asiantravel]

on 4 July 2011 a journalist by the name of Hans Inge Ringodd wrote a disturbing article entitled “ new shattered dreams “ on Haugesund news in Norway ….

This is the Google translation

" Thailand Dreams is the twelfth investment company established by Kurt Svendheim as (general manager and director) "

https://translate.google.co.th/translate?hl=en&sl=no&u=http://www.h-avis.no/haugesund/nyheter/nyheter/nye-knuste-drommer/s/2-2.921-1.6344774&prev=search

Edited February 27, 2016 by Asiantravel

[HooHaa]

It is a perfectly reasonable statement if you have less than 2 years to live.

[metisdead]

Another post containing a link to a disallowed site has been removed as well as a reply.

[impartialobserver]

A shame those posts were removed, as they detailed the CEO of this company's troubles with banks in Norway.

[Gary A]

You have a choice of being able to buy many different condos for two and a half million baht. If you do buy yourself, at least the condo will be yours. The BIG trick would be to get 20,000 baht per month year round. I'd bet what they are selling are shoe boxes that would not possibly rent for 20,000 baht per month year round. It does indeed sound too good to be true. Possibly a pyramid scheme?

[GuestHouse]

You have a choice of being able to buy many different condos for two and a half million baht. If you do buy yourself, at least the condo will be yours. The BIG trick would be to get 20,000 baht per month year round. I'd bet what they are selling are shoe boxes that would not possibly rent for 20,000 baht per month year round. It does indeed sound too good to be true. Possibly a pyramid scheme?

And the Condo fees have to be paid every month !

[gk10002000]

The numbers itself do not look unreasonable but I would advise you to buy a condo yourself and rent it out instead.

It's essentially guaranteeing 10% returns. That's highly suspect as far as I'm concerned.

I see 6%-8% guarantee plans everywhere, it is not uncommon.

I agree that you can see these everywhere. However none of them are safe investments and the "guarantees" are worthless. US 30 year treasuries are paying 2.6% and are pretty safe (still some risk of default and a currency exposure). Anything paying more than that is more risky. The US stock market returns an average of around 7% but with swings of around +20 to -70. If they are paying 10% it is very very risky. I was in Japan when several huge insurance companies failed because they could not continue to honor guaranteed 4% returns. They may have the best intentions but in the event of a changing property market, new regulations, cash flow problems in their business etc you would be screwed.

Just think if these returns were even reasonably secure they would be getting a bank loan at much lower interest rates and keeping the difference of several percent.

You make a completely valid point. If the deal is so good, then why don't they use their own money? Now, maybe they don't have much capital, and prefer to use other people's money. Certainly possible and you will find many activities such as this that want to use other people's money for one main reason: risk avoidance. If they use other people's money, they can't lose their money. I remember years ago on NOVA, there was several hour documentary about building a skyscraper. Once the thing was ready to at least be partially occupied, the developer was able to get the proper interest rate loan, pay off the construction loan(s) and make what they said was the normal 7% profit annually which apparently is a nominal rate of return for big real estate/building projects. Anyway, 10 % on real estate in a country that has military coups frequently, where the laws are not clear and are written against foreigners oftn, and the constitution and courts are military controlled? Oh and how would the guarantee be enforced? What court of law and in what country would you sue in if things went wrong? good luck

[JanekS]

I've just read investment plan on New Nordic Group website and its all looks much different than what I see everyday.

I live on next soi and I am often passing their buildings. Project is really big and still expanding (will be 54 buildings in total!), very brave I would say in this bad times when Pratumnak in high season looks like in low season years ago and in low season you can really feel like somewhere in Scandinavia, no people on the streets at all..

How project looks:

1. They built a lot of buildings which are very close to each other, 70% of rooms has a view on other buildings which is maybe 10 or less meters away, enjoy the view Even in Bangkok is hard to find such a density with new buildings.

2. Buildings and surrounding looks tidy but nothing much more than that. Construction quality looks very average (seen building process), economy class I would say. But a lot of bright paint, flags and stands with 5 stars on them can make good impression on person which is not too literate with this subject (some investors). Generally there is much more flashy marketing than good architecture.

I was wondering for a long time what is all that idea since many new condo buildings around are max 50% occupied in high season and much less in low season and many of New Nordic buildings are finished but inhabited yet they keep building new ones...

I've just see now this whole idea about guarantee 10% return... Where is a trick?

COMPANY WILL NOT MAKE THAT MUCH MONEY ON RENTING OUT YOUR PLACE

1. On the website info: Night rate for 28sqm room 1700THB, on Agoda 1050THB (high season probably 1500THB)

2. On the website info: Hotels was 65%​– this is in the ‘middle season’. Maybe they had few days that it was like that or in just one hotel, my impression was much less than that, maybe 20% in average plus few buildings totally empty

Over the ‘high season’ they are sure to have occupancy of between 90% – 95%: again, maybe they had for few days in some buildings with Chinese tour. In average its sooo unrealistic, and just to remember that many of their bulidings are finished but staying empty.

SO HOW THEY MAKE MONEY?

Price that you pay for buying

28sqm for 2,4 milion (on their website they even have some (30,5sqm for 3,5 million!) That is very very expensive for this area and for standard and density of building and for a view (street or other buliding, no sea view!)

In this area prices of brand new condos in about similar or better standard and size are between 1,2 up to 1,7 milion. For 2,4 M you can get one high standard high rise condo with great sea view.

So you OVERPAY 1 milion baht at the start!!!

10% after 5 years New Nordic will pay you NET 1.1 Milion

It looks like New Nordic is just taking loan for 5 years for 1 milion from you paid monthly without interest

What's more they make money on renting this condo. Lets be realistic, they can get maybe 20% occupancy with 1000THB/night NET profit, for 5 years it brings 365 thousand THB

So lets say after 5 years you have a condo finally in the price that you should pay in the first place but its not that new anymore cause around 100 people slept there in the meantime.

New Nordic had your cash in moment of sale that covered their construction cost (probably less than 1 milion/unit) so it was 1,4 milion that they could invest in new projects plus they got 365 thousand THB from rent.

Of course they have costs but its still very profitable for them and I salute them for coming with such brave business model but from my point of view its not a good deal for investors.

If they keep having new investors and high room occupancy it will all work, but I doubt it. Just imagine situation that they cannot find new investors, tourists are not coming (it is like this now).

Company running out of cash and cannot keep 10% return project anymore, well you own the condo but for how much would sell it than or rent it on the market?

One more thing, maintenance fee is one of the highest I've ever seen in Thailand, 50thb/sqm, it is usually 30-35 in higher standard buildings. Means its 17K THB/year instead of 10-11.

So if anybody thinks about investing in New Nordic please think twice or negotiate buying price, in much lower price maybe it would make sense.

I rent 33sqm condo nearby New Nordic on Soi 5 with unobstructed beautiful sea view for 8000/month with 6 months contract. Market value of the flat is 1 million. Its older building but its clean. Building is occupied in 60-70% mostly by people that live here all year plus some tourists. Low price, clean, good location and beautiful view, very quiet around, that attracts me. This is just for reference

Edited February 27, 2016 by JanekS

[shirtless]

I doubt very much this investment will last , you will end up homeless if you take these people seriously

[huawei]

Best approach...educate yourself and be in control.

[chiang mai]

I'm a financial professional with clients outside of Thailand. (While I've thought about offering services in Thailand to expats/Thais, I quickly realized the headache is so not worth it.)

1. 10% P.A. guaranteed is impossible. Any return in THB guaranteed is impossible. In euros, GBP, and USD there are virtually guaranteed returns on government bonds (nothing is 100% sure--there could be a nuclear war or asteroid hit the planet, after all), but those pay more like 2% if you're lucky, and come with other problems (mark-to-market value declines, exchange rate issues, etc.)

2. Use common sense when evaluating a potential financial advisor. Someone who advertises on a web forum is probably not the best person to talk to. Someone who can't write proper English (look at the language on the site--if you're a native speaker you can quickly realize it's awful, broken English) and who won't bother to pay someone to improve their awful marketing materials is clearly a bottom feeder. You want to work with professional, established, high quality advisors, which means nice offices, sharp suits, and impeccable English on glossy prospectuses. Of course you need to do more due diligence than this, of course, such as how long they've been in business, if they're accredited/certified in a first-world country, and so on. And, yes, I know that those nice offices/sharp suits are expensive which means they're making money from fees--but the money you'll lose in advisory fees is a pittance compared to the massive capital losses you'll face if you deal with incompetent or unscrupulous people.

Please, everyone, be safe. Money is your lifeline and you shouldn't entrust it to some dodgy stranger on the internet.

"You want to work with professional, established, high quality advisors, which means nice offices, sharp suits, and impeccable English on glossy prospectuses."

No, it certainly doesn't.

"Someone who can't write proper English....is clearly a bottom feeder."

I've never come across one single financial professional, such as you claim to be, who would slag off the competition in such a manner, no matter how justified it was. Some "financial professional" you are.

"Any return in THB guaranteed is impossible."

Really? You are clearly a "financial professional" to be avoided.

I assure you there are loads of IFA's, ex IFA's and expats with sufficient financial accumen on this forum who slag off British financial advisers who operate in Thailand.

[andApples]

The part that says "retire in Thailand on 20,000 baht per month. Well, maybe you can live on that, there are plenty of posts about living ultra cheaply in Thailand, but that certainly won't qualify you for a retirement visa income method which demands 65,000 month income.

20k a month, its possible if you want to eat thai food everyday, and never go out, or never get sick. But most foreigners are not going to fit that category. Sure Thais can live on that amount, but they usually have a huge network of friends and family as well, and they know how to get around here, and they have rights here that foreigners generally doesn't have.

[Inyourendo]

I'm a financial professional with clients outside of Thailand. (While I've thought about offering services in Thailand to expats/Thais, I quickly realized the headache is so not worth it.)

1. 10% P.A. guaranteed is impossible. Any return in THB guaranteed is impossible. In euros, GBP, and USD there are virtually guaranteed returns on government bonds (nothing is 100% sure--there could be a nuclear war or asteroid hit the planet, after all), but those pay more like 2% if you're lucky, and come with other problems (mark-to-market value declines, exchange rate issues, etc.)

2. Use common sense when evaluating a potential financial advisor. Someone who advertises on a web forum is probably not the best person to talk to. Someone who can't write proper English (look at the language on the site--if you're a native speaker you can quickly realize it's awful, broken English) and who won't bother to pay someone to improve their awful marketing materials is clearly a bottom feeder. You want to work with professional, established, high quality advisors, which means nice offices, sharp suits, and impeccable English on glossy prospectuses. Of course you need to do more due diligence than this, of course, such as how long they've been in business, if they're accredited/certified in a first-world country, and so on. And, yes, I know that those nice offices/sharp suits are expensive which means they're making money from fees--but the money you'll lose in advisory fees is a pittance compared to the massive capital losses you'll face if you deal with incompetent or unscrupulous people.

Please, everyone, be safe. Money is your lifeline and you shouldn't entrust it to some dodgy stranger on the internet.

Bwahaha ....you mean like Alan Woods or Neil Robbits ?.......

Edited February 28, 2016 by Inyourendo

[Gutenberg]

The numbers itself do not look unreasonable but I would advise you to buy a condo yourself and rent it out instead.

It's essentially guaranteeing 10% returns. That's highly suspect as far as I'm concerned.

I see 6%-8% guarantee plans everywhere, it is not uncommon.

Any "guarantee" on a property investment "plan" (6-8%, or 10%, etc) is merely a scheme that overcharges you for the initial investment, and then returns a portion of your overcharge to you over a period of time. This is actually just a form of return on capital. It is not a return on investment. After the "guaranteed return" period is over, see what happens. The OP's gut instinct is correct - this is a scam.

A friend is getting 7% per year from a prime location villa with pool. What is he doing wrong?

[Ludacris]

I know someone who invested in one of these condo/hotel schemes near the Vancouver airport, and all I can say is there are a lot of risk factors that need to be taken into consideration. Many things that you've never thought about or think will never happen can happen (ie. SARS). Despite all the claims of making a great return and even holding it during the Olympics, I believe he barely broke even after many years and got out.

A guaranteed return on anything (especially 10%!) other than a fixed deposit or government bonds needs to be evaluated accordingly.

Edited February 28, 2016 by Ludacris

[55Jay]

Your instincts are correct. Moreover, $69k as an income producing lump of cash, isn't much to begin with.

Our esteemed Nordic "financial advisers" probably consider visa border runs as part of "living" in Thailand on 20,000 Baht/mo.

With a few exceptions of course, the common on-shore "long stay" visa extension paths require more than 20,000 Baht/mo income. Going the annual show money in Thai bank route would require the investor to fence off a portion of that $69k; which, of course, has a predictable impact on the monthly income figure.