Buying a 40Mbaht hotel - Bank finance a part of it?

[inventorinthailand]

A friend (Falang) of mine have found a hotel with 45 rooms (freehold) he wants to buy. He asked me if I knew if it was possible to finance a part of it via a Thai bank. I have no clue I answered him, thereof my post here. Is it possible?

He will to pay 15Mbaht himself and finance the rest of the 25Mbaht for a period of 10 years.

Possible or not?

Edited June 7, 2016 by inventorinthailand

[bartender100]

Even if he could find a bank, i would say they would want 80% down

[stoneyboy]

I think your friend is punching above his weight a little don't you.

[JaiLai]

I think your friend is punching above his weight a little don't you.

It is always better to lose the banks money than your own..............always!

[stoneyboy]

I think your friend is punching above his weight a little don't you.

It is always better to lose the banks money than your own..............always!

Indeed,are Thai banks renowned for assisting foreign investors loans to the tune of 25 million baht with only 15 million capital.

I'd be happy to hear from any members who've borrowed amounts equal to the OPs request.

I could believe it were possible if it were the other way round whereby the OP had 25 million looking to borrow 15 million.

Edited June 7, 2016 by stoneyboy

[theguyfromanotherforum]

A friend (Falang) of mine have found a hotel with 45 rooms (freehold) he wants to buy. He asked me if I knew if it was possible to finance a part of it via a Thai bank. I have no clue I answered him, thereof my post here. Is it possible?

He will to pay 15Mbaht himself and finance the rest of the 25Mbaht for a period of 10 years.

Possible or not?

It's possible if he puts a 25 million baht collateral.

[blackcab]

Your friend needs to think a bit more. He will also need substantial working capital. He can not aquire the property and then run it on fresh air.

If the hotel has excellent profitability then he could try approaching the company's existing bankers.

One question: Has your friend ever operated a hotel before?

[inventorinthailand]

Your friend needs to think a bit more. He will also need substantial working capital. He can not aquire the property and then run it on fresh air.

If the hotel has excellent profitability then he could try approaching the company's existing bankers.

One question: Has your friend ever operated a hotel before?

He could probably fork up all the money if he wanted. He is making his money on trading stocks, oil, gold etc etc, I don't know it all. So he might need some capital for that as well He is also awesome on online marketing and putting together big parties. But running a hotel, hmm, I don't know. How difficult can it be?

[inventorinthailand]

A friend (Falang) of mine have found a hotel with 45 rooms (freehold) he wants to buy. He asked me if I knew if it was possible to finance a part of it via a Thai bank. I have no clue I answered him, thereof my post here. Is it possible?

He will to pay 15Mbaht himself and finance the rest of the 25Mbaht for a period of 10 years.

Possible or not?

It's possible if he puts a 25 million baht collateral.

Wouldn't the land and the building it self be considered as collateral?

[prestburypark]

Surely he would have his own financial advisors and lawyers to negotiate on his behalf. sounds like barstool b.s.

[inventorinthailand]

Surely he would have his own financial advisors and lawyers to negotiate on his behalf. sounds like barstool b.s.

He probably has. But I just got curious and posted the question here.

[SOTIRIOS]

...would think that he should get answers from the banks themselves....

[WishWashMan]

I rag on a guy who cant do farming in issan-its so obvious. i get called a hater.....lol.

ill try a new way here.Lets wish this guy well............................hahahahahahahahahaha. Lets encourage him to follow his dreams, be the next Bill Marriot. Even though it looks like he is going to lose a bundle.

PS never believe a guy when he says he makes money tarding stocks, gold ,oil. GS, JP morgan, merril inch kant do it.

PS2- we should be qusentioning the brain power of the FREIND-"how hard can running a profitable hotel be? " an oompa loompa level of brain power................lol.

Edited June 8, 2016 by WishWashMan

[tomwct]

The seller might accept 15 million and finance the balance himself! Bars in Pattaya are bought, repossessed, and then resold all the time. IT's a big business there. The owner takes the down payment and returns 6 months to foreclose and take back the property be resold. Amazing Thailand.

[sanukjim]

Your friend needs to think a bit more. He will also need substantial working capital. He can not aquire the property and then run it on fresh air.

If the hotel has excellent profitability then he could try approaching the company's existing bankers.

One question: Has your friend ever operated a hotel before?

And owning only 49 % there is always the factors of unknown in there.What if he is even a little bit suscessful and a rivel wants him not to be there.? One's partners can be influnced by money or intemidations. Thais are notorious of not wanting any competition or just jelalous and want to take over. your business..

Edited June 8, 2016 by sanukjim

[steelepulse]

Don't know the location, but there's a reason why there are literally hundreds of smaller hotels and guesthouses for sale in Phuket, none of them are making money.

[jaapfries]

Tell you friend to keep doing what he's doing and STAY away from the 'Service Industry'. Running a 45 Rm Hotel is an extremely arduous task, because there's no budget for the many key-roles which the larger hotel properties do have. - This means that your friend better be prepared to wear a number of different hats, such as Engineer, Accountant, HR-Expert (and that's another dramatic story !), Booking/Computer Expert, Sociologist, F&B-Expert et al. My wife & I ran a similar sized hotel for 10 years, here in Thailand. NEVER AGAIN ! ! ! This is a 24/7 involvementm, which will rob you of your Health, Sanity & Funds ! Believe me !

[Roomuck]

My advice would be DO NOT pay any deposit to the seller before the bank has actually deposited the loan into his account.

I lot of people say Thais say yes, when they mean no.

Thai banks are renowned for saying, yes, sure, no problem. But then after months of filling out endless forms, preparing endless documents, endless assurances that everything is fine, suddenly come up with some unforeseen reason to not go ahead.

[shirtless]

, You should take your time mate in the present market there are plenty of options

Edited June 8, 2016 by shirtless

[namatjira]

Your friend needs to think a bit more. He will also need substantial working capital. He can not aquire the property and then run it on fresh air.

If the hotel has excellent profitability then he could try approaching the company's existing bankers.

One question: Has your friend ever operated a hotel before?

He could probably fork up all the money if he wanted. He is making his money on trading stocks, oil, gold etc etc, I don't know it all. So he might need some capital for that as well He is also awesome on online marketing and putting together big parties. But running a hotel, hmm, I don't know. How difficult can it be?

How difficult can it be ? Looks easy from the outside bit believe it's a constant battle, if he had 10 years experience in running a successful hotel he might have a chance.....off the street with no idea ? No chance at all......sounds like he is doing ok in the stock market....stick with what you know Edited June 8, 2016 by namatjira

[theguyfromanotherforum]

Honestly, the question is beyond ridiculous.... it's downright stupid.

If you are buying a hotel in your own country the maximum you can finance is usually 50%. It's a business and you will not get more.

This supposed high roller wants to take a bank loan in Thailand by putting only 25%? Have you ever heard a foreigner getting a 75% loan on a condo let alone a business?

Sorry, I just can't get past the stupidity of this post,

[williamgeorgeallen]

so this happened to someone i know. guy went to a bank for a mortgage, got 25 year mortgage at going rate (cant remember exact rate, probably 5%) he paid the deposit on the property. the bank then changed their mind and said it would be a 10% interest rate repayable over 10 years. he is now living a sad life making payments on this loan. anyone reading this should think very hard about taking a mortgage in thailand, then decide not to.

[Thaidream]

The post is not stupid at all- there are creative ways of financing and if one can get a financial institution to finance a majority stake in a business based upon a sound financial record and business plan- go for it. However, unless the person has Thai guarantees with deep pockets- no established bank will touch it. Private financing is possible but the interest rates are very high and again you need an entree from a Thai guarantor. In addition, if this person's sole income stream is from the stock market- without a bank account far in excess of the total purchase price- it won't fly. The market goes up but also goes down. A millionaire today- a pauper tomorrow. Way too risky.

In addition t the above, any lender will want a complete history of the business ownership and their accounting records; the land owner and any records of transfer as well as a survey of the land; plus all tax records. This alone will take several months of research as well as payments of research and survey fees. If our 'friend' does not understand what all this entails- he should not even think about purchasing a business in Thailand.

Edited June 8, 2016 by Thaidream

[Apiwan2]

Your friend needs to think a bit more. He will also need substantial working capital. He can not aquire the property and then run it on fresh air.

If the hotel has excellent profitability then he could try approaching the company's existing bankers.

One question: Has your friend ever operated a hotel before?

He could probably fork up all the money if he wanted. He is making his money on trading stocks, oil, gold etc etc, I don't know it all. So he might need some capital for that as well He is also awesome on online marketing and putting together big parties. But running a hotel, hmm, I don't know. How difficult can it be?

So a gambler then.... umm

[sir charles IV]

Tell your friend sure there is. Follow these easy steps :

1) deposit 15m into Sir Charles IV bank. It's new so u won't find it online. I happen to know their bank details

2) once deposit is confirmed the bank will assess his application and will notify him

3) he will receive a welcome pack and enter into a promotion their running. I think it's all expenses paid trip to Walking Street entertainment center with minor conditions ( he must be in pattaya and able to sit on the back of a baht bus. Maximum spending money I believe is 499 tbh)

4) all done.

[sitti]

so this happened to someone i know. guy went to a bank for a mortgage, got 25 year mortgage at going rate (cant remember exact rate, probably 5%) he paid the deposit on the property. the bank then changed their mind and said it would be a 10% interest rate repayable over 10 years. he is now living a sad life making payments on this loan. anyone reading this should think very hard about taking a mortgage in thailand, then decide not to.

If that is what really happened, then this guy is not telling the whole story. I would love to hear from bank side as well. Both of a guy you know and bank signed and agreed on terms of this loan. Everything are on papers he signed. Everything bank can and will do to this loan are all in the papers he signed. It doesn't matter in what country, US, EU, Canada, etc, majority debtors always tend to blame their debt problems on banks. If this guy insist on claiming bank is the one that broke the terms of his loan, then he should be talking to a lawyer.

[poohy]

But running a hotel, hmm, I don't know. How difficult can it be?

Take it from me its hard!much harder than people ever think

I can speak personally managing one 5 star hotel start up in Laos, and one hotel in southern thailand

If you are lucky you will only get as mad as Basil Fawlty

[blackcab]

Your friend needs to think a bit more. He will also need substantial working capital. He can not aquire the property and then run it on fresh air.

If the hotel has excellent profitability then he could try approaching the company's existing bankers.

One question: Has your friend ever operated a hotel before?

He could probably fork up all the money if he wanted. He is making his money on trading stocks, oil, gold etc etc, I don't know it all. So he might need some capital for that as well He is also awesome on online marketing and putting together big parties. But running a hotel, hmm, I don't know. How difficult can it be?

For a well managed business, it's not difficult at all. In my experience, hospitality businesses generally run better without the owner present (where the owner is unqualified to run the business themselves).

His biggest problem will be due diligence before the purchase. There are very, very few people in Thailand with the ability, discretion and neutrality to undertake that job properly.

From experience, due diligence of a hospitality business of that size will cost about 500,000 baht. For that money he will get industry professionals (with work permits) assessing the business to ensure he is buying a legal and profitable business.

Or they will show him the evidence of why it's an unsound investment.

[F4UCorsair]

Any lending institution would want to see his record in running a business, preferably a hotel, before they would be prepared to lend. They don't want to have to through the mess of foreclosing, temporary management, new owner, etc

Vendor finance is quite different. He would prefer to see it fail, foreclose, run it for a few months, and repeat the exercise.

If he's making money trading, he's one of the very few who do.

[williamgeorgeallen]

so this happened to someone i know. guy went to a bank for a mortgage, got 25 year mortgage at going rate (cant remember exact rate, probably 5%) he paid the deposit on the property. the bank then changed their mind and said it would be a 10% interest rate repayable over 10 years. he is now living a sad life making payments on this loan. anyone reading this should think very hard about taking a mortgage in thailand, then decide not to.

If that is what really happened, then this guy is not telling the whole story. I would love to hear from bank side as well. Both of a guy you know and bank signed and agreed on terms of this loan. Everything are on papers he signed. Everything bank can and will do to this loan are all in the papers he signed. It doesn't matter in what country, US, EU, Canada, etc, majority debtors always tend to blame their debt problems on banks. If this guy insist on claiming bank is the one that broke the terms of his loan, then he should be talking to a lawyer.

guy was married to a thai of course. the mortgage was in both names. i suspect the bank sold him a mortgage based on the couple being thai and then changed their mind and made it a mortgage with conditions based being a foreigner. i have not seen the guy for many years. last thing i heard is that he had separated from his wife but was still staying in the same house as they could not sell it and neither could pay the mortgage on their own. the ex wife even had her new thai boyfriend move in. not sure how that all worked out. surprises me the number of people who do things in thailand without getting good legal advice. i know a group of over 20 people on facebook who have made final payments on their off plan condos but a year later have not got the titles. i asked what their lawyers had said and not a single one had gone to get legal advice before or after making the final payment.