Flipping Houses

[Suradit69]

On 4/24/2017 at 0:07 PM, digibum said:

This feels a bit like we're playing a game.

Primarily because you're discussing this (in this forum) with just a couple of people and all of you are trying to out-score the other.

 

Obviously flipping homes in Thailand is not the same as flipping houses or condos in the US (which ended pretty badly for a lot of people not too long ago), just as flipping homes in North Dakota or Louisiana wouldn't be the same as flipping homes in Arizona or NYC. And arguing the issue with one or two random people on a forum isn't going to suddenly make all the factors to consider crystal clear or evident.

 

Presumably you think doing this is going to be a more profitable use of your time and money than other more liquid, traditional investments. Accept the fact that you would be taking on considerable risk and it's at least a possibility that you will lose money and probably add a lot of stress to your life. If flipping here was the gold mine you think it is, it would have attracted more people, especially people with very deep pockets.

 

 One the biggest mistakes some people make in investing is assuming that they alone have stumbled across a sure thing that has escaped the attention of anyone else. It happens from time to time, but not that often.

 

To use a very trite but nonetheless valid expression: If you want to make a small fortune (in Thailand), start out with a large fortune. Farang tend to think they innately posses a business sense far superior to anyone else. Thailand usually has the last laugh. 

[digibum]

2 hours ago, trogers said:

Flipping - buy low sell high, in the shortest possible time.

 

Would work near the bottom of a property cycle, like 2009 to 2011 in the US. Why not continue flipping now in the US during the present upswing?

 

And is Thailand now near the bottom of a downswing?

 

Wow, every time you post, it's like you're going out of your way to completely ignore everything said previously.  :-)  

 

I am flipping houses right now.  I have deals going on right this moment.   I don't have any plans to stop doing it anytime soon.  But in 2 - 5 years, we're looking to do an early semi-retirement.  I need something better to do than post on ThaiVisa or wait until the local bar opens. I have no desire to teach.  I am not going to plunk down some cash to open a bar, restaurant, hotel, etc.  So, I'm trying to think of something that would keep me from going loopy.  

 

My first choice was not Thailand.  My vote is for Central or South America.  Foreigners can own land.  There are foreigners down there flipping houses.  Many places are a quick six hour flight away so I can still partner with people on deals back in the US and fly up and back over a weekend.  

 

But, you know, the wife . . . she obviously prefers being closer to her family.  Ironically, she's not even sure about Thailand either.  She's more open to Vietnam than she is Thailand.  At least it's close and she can be back in Thailand in an hour or two by plane.  

 

Just doing some due diligence.  

[digibum]

49 minutes ago, Peterw42 said:

I think people are missing the fundamental aspect of Thai's and second hand property.

 

NEWS FLASH: THAI PEOPLE BELIEVE IN GHOSTS

 

Not sure if anyone has noticed the "spirit houses" in the front yard of every house in Thailand. This is not only acknowledgment that they believe in ghosts, they build special houses for them to live in. 

 

A spirit house is for the spirits to live in, there are usually two houses, the bigger higher up one is for bad or lost spirits to live in, the smaller lower down house is for the former occupants to live in. 

 

A spirit house is a permanent structure and stays with the property. I have seen a house demolished in the middle of Bangkok and replaced with a 10 story building "BUT" the spirit house remains.

 

This belief system has a huge impact on the 2nd hand house market, its a bit like buying a house in the west and it comes with a granny flat and a granny living in it, and you have to take care of her and sell her with the house in the future.

 

How can you flip houses when, so far as Thais are concerned, uncle somchai still lives there. Not to mention a couple of bad ones that may have moved in.

 

 

Explain the robust rental market then.  Do ghosts only live in houses you own or do they honor rental agreements and give you your space?  

[digibum]

34 minutes ago, Destiny1990 said:

U need to stop talk about your USA property buying scheme as it not relates to Thailand!By the way u can not even own house with land here just so u know!

Why are you even commenting?  You are adding zero value to the conversation.  Zero.  Please just go back to your barstool and lecture everyone on what the "real" Thailand is like.  

 

If you bothered to even read anything prior, I have said that I have a Thai wife.  I have a Thai wife who is currently living with me in the US and helps on many of my flips here in the US.  She can more than handle the vast majority of the tasks associated with flipping a house if we were back in Thailand.  

 

So, yes, she can own land.  Now <deleted>.  

[Destiny1990]

3 minutes ago, digibum said:

 

Explain the robust rental market then.  Do ghosts only live in houses you own or do they honor rental agreements and give you your space?  

You know what really is popular in Thailand?

Flip flops!

[Peterw42]

7 minutes ago, digibum said:

 

Explain the robust rental market then.  Do ghosts only live in houses you own or do they honor rental agreements and give you your space?  

What robust rental market ? Thailand has one of the highest home ownership rates in the world, around 80%. The same principles apply, Thais prefer to rent new rather than old.  

[digibum]

10 minutes ago, Suradit69 said:

Primarily because you're discussing this (in this forum) with just a couple of people and all of you are trying to out-score the other.

 

Obviously flipping homes in Thailand is not the same as flipping houses or condos in the US (which ended pretty badly for a lot of people not too long ago), just as flipping homes in North Dakota or Louisiana wouldn't be the same as flipping homes in Arizona or NYC. And arguing the issue with one or two random people on a forum isn't going to suddenly make all the factors to consider crystal clear or evident.

 

Presumably you think doing this is going to be a more profitable use of your time and money than other more liquid, traditional investments. Accept the fact that you would be taking on considerable risk and it's at least a possibility that you will lose money and probably add a lot of stress to your life. If flipping here was the gold mine you think it is, it would have attracted more people, especially people with very deep pockets.

 

 One the biggest mistakes some people make in investing is assuming that they alone have stumbled across a sure thing that has escaped the attention of anyone else. It happens from time to time, but not that often.

 

To use a very trite but nonetheless valid expression: If you want to make a small fortune (in Thailand), start out with a large fortune. Farang tend to think they innately posses a business sense far superior to anyone else. Thailand usually has the last laugh. 

 

Actually, I think your opening sentence couldn't be farther from the truth.  Right up front, twice, I asked to hear from people who have experience flipping in Thailand.  And a few people with experience have been kind enough to share.  Some have had bad experiences.  Some seem to have at least done okay with it.  Some haven't flipped but they've made various other types of real estate investments in Thailand and have shared some valuable insights as well.  

 

The problem is, as usual in forms like TV, is people who have no clue what they're talking about, how flips even work, have decided to jump in and just spout BS.  

 

The folks who have actually been there and done that are providing some valuable information.  I appreciate that and that was exactly what I asked about in the OP.  

 

And as much as I appreciate what you've said, and there is some truth in what you've said, I think you're making the same mistake that people make far too often on TV which is the kneejerk reaction.  They read one little piece, ignore everything else what was said, and then give some "let me tell you how Thailand works" speech.  

 

Please, read what I wrote in the OP.  I tried to be very clear about what my objectives are.  I don't see Thailand as some untapped goldmine of wealth.  I've told my wife, I will NEVER buy a primary residence in Thailand.  I would never want my money sitting around that long in Thailand.  I don't trust the government.  I don't trust the rule of law.  

 

That's why flipping appealed to me and landlording doesn't.  I don't want to own Thai real estate a second longer than I have to.  I never want to own anything in Thailand that I wouldn't be willing to walk away from on a moment's notice.  

 

Some guys move here and buy a bar and they sit around and drink themselves into an early grave.  Consider my interest in flipping in Thailand to be on par with the bar owner.  

 

I'm the type of person who needs a purpose to get out of bed in the morning.  I figure flipping houses is easier on my liver than owning a bar but I still get some satisfaction out of taking shit and turning it into something people can appreciate.  

 

However, unlike the bar owner, and despite the fact that I would not be doing this as a primary source of retirement income, I'm not prepared to do it if there's no money to be made.  I'm not going to lose money on my hobby.  Hell, I know enough guys I can joint venture with here in the US and have done deals with in the past that I can make 10% - 20% on my money just wiring them money for deals. I can make 10% all day long doing hard money loans to flippers.  

 

So, I simply came here to ask if it sounds like a viable option.  Because if it's not, I gotta tell the wife, the chances of us moving back to Thailand don't look good.  I would much rather be doing deals in Mexico or Panama where there are expats doing it and making money than move back to Thailand and have nothing to do except for finding threads on TV and commenting on topics I know nothing about.  

 

[giddyup]

21 minutes ago, digibum said:

Why are you even commenting?  You are adding zero value to the conversation.  Zero.  Please just go back to your barstool and lecture everyone on what the "real" Thailand is like.  

 

If you bothered to even read anything prior, I have said that I have a Thai wife.  I have a Thai wife who is currently living with me in the US and helps on many of my flips here in the US.  She can more than handle the vast majority of the tasks associated with flipping a house if we were back in Thailand.  

 

So, yes, she can own land.  Now <deleted>.  

It seems to me that you have been given all the advice necessary to form an opinion, and if it was anything other than flipping houses in Thailand is not a viable proposition, I'd be surprised. All other comments/responses are bordering on being purely argumentative..

[digibum]

Just now, giddyup said:

It seems to me that you have been given all the advice necessary to form an opinion, and if it was anything other than flipping houses in Thailand is not a viable proposition, I'd be surprised. All other comments/responses are bordering on being purely argumentative..

 

Agreed, I think I came to that conclusion back on page 2 or 3 of this discussion.  Though I did ask some follow up questions to a few of the people who actually have experience flipping in Thailand and have been waiting to learn a little more about their perspective on things. 

[giddyup]

3 minutes ago, digibum said:

 

Agreed, I think I came to that conclusion back on page 2 or 3 of this discussion.  Though I did ask some follow up questions to a few of the people who actually have experience flipping in Thailand and have been waiting to learn a little more about their perspective on things. 

I have no experience, but to me "flipping" suggests quick turnover, and if the local market (Pattaya) is anything to go by, that's far from the reality. There was a building boom of gated villages when I first bought here, that has all ground to a halt, and owners of existing properties are taking 12 months and longer to move houses, sometimes at a substantial loss.

[newnative]

20 minutes ago, Destiny1990 said:

Okay so than these (new)units that u buy of the developers they barely need any renovation i guess just some curtains and a tv at the most.How is it you can find a buyer who pays u significant more and the develop can't find them?

Don't want to get into details but, basically, we offer a superior product.  That appeals to some buyers.  Maybe not a lot, but some.   'Just some curtains and a tv at the most' is not what we do.

[Destiny1990]

24 minutes ago, newnative said:

Don't want to get into details but, basically, we offer a superior product.  That appeals to some buyers.  Maybe not a lot, but some.   'Just some curtains and a tv at the most' is not what we do.

Okay and after all taxes are paid there is still is some profit left?Maybe u better start a renovating company to avoid your seller and buyer taxes and less risk for u whrn unable to sell it off.i remain somewhat skeptical that after u lay new tiles and break away some wall etc and paying ur buyer and seller taxes that there still a profit?.Developers will give discounts to any buyer on completed developments with units left so prospect buyers can go directly to the developer negotiate a price than upgrade the flat same as yours and that price should be way lower than urs imho? 

Edited April 26, 2017 by Destiny1990

[trogers]

1 hour ago, digibum said:

 

Wow, every time you post, it's like you're going out of your way to completely ignore everything said previously.  :-)  

 

I am flipping houses right now.  I have deals going on right this moment.   I don't have any plans to stop doing it anytime soon.  But in 2 - 5 years, we're looking to do an early semi-retirement.  I need something better to do than post on ThaiVisa or wait until the local bar opens. I have no desire to teach.  I am not going to plunk down some cash to open a bar, restaurant, hotel, etc.  So, I'm trying to think of something that would keep me from going loopy.  

 

My first choice was not Thailand.  My vote is for Central or South America.  Foreigners can own land.  There are foreigners down there flipping houses.  Many places are a quick six hour flight away so I can still partner with people on deals back in the US and fly up and back over a weekend.  

 

But, you know, the wife . . . she obviously prefers being closer to her family.  Ironically, she's not even sure about Thailand either.  She's more open to Vietnam than she is Thailand.  At least it's close and she can be back in Thailand in an hour or two by plane.  

 

Just doing some due diligence.  

Yes, my blinkered view comes from a warning I gave a friend who set up a company in 2001 to flip condos in downtown Bangkok. My warning proofed true and they had to change their business model to development in 2005 (See Resort in Town). 

 

http://www.bangkokproperty88.com/c-and-m-bangkok-luxury-homes.html

 

Like you, they offered instant cash to distressed condo owners, refurbished the properties and then looked for foreign buyers. They even set up a subsidiary to do their own refurbishment using craftsmen from China.

 

They faced difficulty selling when the 2nd wave of new developments, by the big boys and their bankers, came into the market.

 

I was invited to be part of their team, but I declined, preferring just to be a consultant to new projects.

Edited April 26, 2017 by trogers

[newnative]

15 minutes ago, Destiny1990 said:

Okay and after all taxes are paid there is still is some profit left?Maybe u better start a renovating company to avoid the seller and buyer taxes and less risk for unable to sell it off.

Yes, some profit left, though not a huge amount.  Average is around 650,000 Baht net after everybody's paid. Latest hasn't gone to closing yet but should come in right around 600,000 Baht net depending on the taxes at the Land Office.  For some of the small 1 bedrooms we're happy if we net 500,000 Baht.  Small potatoes but we do it mostly for the enjoyment of creating something special--same as when we did them in America.

[Suradit69]

1 hour ago, giddyup said:

All other comments/responses are bordering on being purely argumentative..

I agree. If the O/P tries to deal with officialdom, banks and property owners or buyers in Thailand with such a belligerent, argumentative, know-it-all attitude, he's doomed from the outset. 

 

 

[funandsuninbangkok]

3 hours ago, trogers said:

Yes, my blinkered view comes from a warning I gave a friend who set up a company in 2001 to flip condos in downtown Bangkok. My warning proofed true and they had to change their business model to development in 2005 (See Resort in Town). 

 

http://www.bangkokproperty88.com/c-and-m-bangkok-luxury-homes.html

 

Like you, they offered instant cash to distressed condo owners, refurbished the properties and then looked for foreign buyers. They even set up a subsidiary to do their own refurbishment using craftsmen from China.

 

They faced difficulty selling when the 2nd wave of new developments, by the big boys and their bankers, came into the market.

 

I was invited to be part of their team, but I declined, preferring just to be a consultant to new projects.

These guys have been trying to sell these properties since I've lived in Thailand(over 10 years). Amazing. Must be a bitch having your cash tied up during the greatest stock bull market of all time!

 

bummer

[Don Mega]

Plenty of unfinished Condo builds around here, maybe the OP should go in balls deep and take over one of the unfinished projects.

[Destiny1990]

2 hours ago, Don Mega said:

Plenty of unfinished Condo builds around here, maybe the OP should go in balls deep and take over one of the unfinished projects.

The pattaya Waterfront any bargains there to flip flop?Talking about balls deep ??.

 

[rickudon]

Ok, haven't read ALL the replies but just a few observations.

 

I live on the edge of a moderately large provincial city. The older houses are mainly part wood. If sold, most older houses are demolished and a new one built instead. I think i am the only person who has actually tried to renovate an older house. Generally speaking this is a MAJOR task. By the time i will have finished, 75% of the house will have been replaced ..... just we do not have another house to live in or the funds to do all at once. Also it is family land and Thais hate to sell it.

 

Houses do often sit empty for years. They are seen as assets even if they produce no income. And the only time they will discount to sell is if their debts are liable to exceed the value of the property. Usually by then the house is only fit for demolition. And it is true that very little major maintenance is done on any house unless it is like because the roof blew off ....

 

More modern houses do come up for sale, but usually at inflated prices. No one wants to sell at a loss, but as savings rates are so low, they will just wait until some one pays the price. But that can take time, it is common for houses to be up for sale for years without a buyer (house next door is about 5 years old, has been up for sale for three years ). Many shop houses are empty for years as well, but they still build more.

 

Outside of the town centre, where prices and rents are much higher, rents are not that high. A gross return of 5% per annum on current purchase prices would be typical, but you have to take into account periods of having no tenants, tenants who do not pay all the time, and maintenance, so real return over a longer period will be lower.

 

In tourist areas or Bangkok may be different.

 

[trogers]

13 hours ago, rickudon said:

Ok, haven't read ALL the replies but just a few observations.

 

I live on the edge of a moderately large provincial city. The older houses are mainly part wood. If sold, most older houses are demolished and a new one built instead. I think i am the only person who has actually tried to renovate an older house. Generally speaking this is a MAJOR task. By the time i will have finished, 75% of the house will have been replaced ..... just we do not have another house to live in or the funds to do all at once. Also it is family land and Thais hate to sell it.

 

Houses do often sit empty for years. They are seen as assets even if they produce no income. And the only time they will discount to sell is if their debts are liable to exceed the value of the property. Usually by then the house is only fit for demolition. And it is true that very little major maintenance is done on any house unless it is like because the roof blew off ....

 

More modern houses do come up for sale, but usually at inflated prices. No one wants to sell at a loss, but as savings rates are so low, they will just wait until some one pays the price. But that can take time, it is common for houses to be up for sale for years without a buyer (house next door is about 5 years old, has been up for sale for three years ). Many shop houses are empty for years as well, but they still build more.

 

Outside of the town centre, where prices and rents are much higher, rents are not that high. A gross return of 5% per annum on current purchase prices would be typical, but you have to take into account periods of having no tenants, tenants who do not pay all the time, and maintenance, so real return over a longer period will be lower.

 

In tourist areas or Bangkok may be different.

 

You have just listed what economists termed the inefficiency of the market, eg. shophouses left empty and they still build more.

 

The reason is that the holder of such properties, using his cash, feels no direct pain to do so. In developed countries, property tax is the pain when leaving the properties vacant.

 

Distressed properties here are only those that are being foreclosed by lenders.

[funandsuninbangkok]

On 4/26/2017 at 5:39 PM, trogers said:

You have just listed what economists termed the inefficiency of the market, eg. shophouses left empty and they still build more.

 

The reason is that the holder of such properties, using his cash, feels no direct pain to do so. In developed countries, property tax is the pain when leaving the properties vacant.

 

Distressed properties here are only those that are being foreclosed by lenders.

Yes but Thailand has just passed a new property tax. Now it will cost to keep empty property. I think lots will come on the market once the first bills get sent out in 2018

[trogers]

1 hour ago, funandsuninbangkok said:

Yes but Thailand has just passed a new property tax. Now it will cost to keep empty property. I think lots will come on the market once the first bills get sent out in 2018

Tax amount would be miniscule if applicable. Most people do not own properties over 10m baht anyway.

[trogers]

Rising NPLs, more foreclosures, and more supply into the market due to coming property tax...

 

http://www.ddproperty.com/ข่าวอสังหาริมทรัพย์-บทความ/2017/4/151535/second-hand-homes-suit-consumers-with-a-limited-bu