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      Check your foreign currency exchange rates against the Thai Baht with Bangkok Bank.

 

It is a good time to buy property in Thailand IF YOU HAVE EXPENDABLE CAPITAL ONLY. Bangkok Bank will lend only to elligilble business owners & property prices are now dropping due to the insecurity of the present economic situation; the US sub primen which hasn't really kicked in in Thailand as yet. This will mean even better bargains as people need to service loans and interest rates are climbing around 7.5% now. Not only this the cost of oil, fares, food to utilies is also climbing so its a buyers market or will be for foreigners who have that cash to buy. However only if you have the spare cash OK but don't look at condos as a cash earning venture unless you get a bargain from an outgoing expat etc. The worse hightmare will be the Management themselves in Thailand as many condo complexes have bad management and sinking funds are not used appropriately. Don't allow Estate managers to hold your titles as they change the circumstances not to your benefit anytime as well as use your titles for further collateral. When buying check out and talk to other owners in the building and especially about maintenance & other project\s the owner has. He/she may have over committed?? Thailand SET index has also been dropping as foreign investment is tending to shift to other countries. The situation with The Baht, and the USA and Japan's firm belief in defending the Yen,  won't change much from what it is. If anything perhaps few Baht swing only.  LAND AREAS: 1 rai = 4 ngarn = 400 wah2 = 1600 m2; 1 talang wah = wah2 = 4 m2; 1 acre = 2.53 rai & 1 ha = 6.25 rai 

To date foreigners may own

  - a unit in a registered Condominium

  - a building (as distinct from its land)

  - a registered leasehold of up to 30 years for all types of titled land (and/or buildings).

  - a company can purchase land and buildings 49% foreign shareholding but must carry out business as well.

  - more than 49% of a condominium unless done in Company form.

  - 49% max of land/ buildings in a company

  - 1 Rai of land if they invest 40m baht in Thailand.

  - Usufract Interest or (sidhikepkin)  allows a foreigner to have temporary ownership to certain things in Thailand. Its really limited to 30 years but can be renewed just like a lease.


However, a 30-year lease can be a good idea with right to renewal to a freehold purchase, or a Thai company (7 PARTNERS) can be established with Thai majority shareholders. Foreigners own 49% shares in the company buying land but we can assist you to make sure your company is safeguarded. Remember if you need advice check first before you commit yourself.

 



INVESTING IN CONDOS IN THAILAND

At the moment the Baht is back to 34 baht = $US1 is a good time to buy condos in Thailand for living only not renting. Be careful and check the background of where you are buying and if they have an effective Juristic Managemement Committee in place & the complex owners have good credentials; and the building are satisfactory. Some companies like a Japanese Company we know ( now partly owned by the large Saha Group but has no connection to this issue) have failed in their attempts to satisfy their buyers. The Japanese Thai company who owns Twin Peaks in Chiangmai will not assist owners of their newly built complex. This is perhaps the best developement in Chiangmai yet some of those investors (foreigners) have had little satisfaction in having problems remedied by the owner & remains the same. Problems like plumbing and not finishing the condos or abiding by the contract are some fo the issues and we understand some realties have not been paid their comissions.

The problem will be like many finance companies will find out, the customer or investor getting a bad deal from the owner or Company of the complex & subsequently goes into liquidity mode, cannot service payments to contractors & suppliers or changes its status as in the case of this Company selling shares out to another to overcome their problems. However the case has no changed at all and they are building more. Even contracts are not adhered to and to litigate can take 6-12 months at the very least. Now Condominium complexes must hard sell and look at the building costs going up monthly to cut even or to make a profit but don't listen to sales pitches thats there only 2 left etc-- if the complex stops you lose your money or most of it as by the time you take it to a Thai Court you may find the payments you made are taken up by Court costs and appearances plus legal fees. A case on the superhighway 2 condos were sold to Thai buyers under the impression that foreigners would flock to the new CBD new ofiice district. Many bought on this assumption & within 6 months 2 floors of owners could not service their payments & the condos are hard to even rent. To date there is no CBD office complex.

Stearns USA analysts triggered a huge market downturn by admitting that market conditions were worse than they admitted.

Now is an excellent time to buy Thailand,'' says Doug Barnett, managing director at Bangkok-based Quest Management Inc., which runs the $350 million Thai Focused Equity Fund in which billionaires Julian Robertson and John Templeton invested. ``It's so cheap it would take a 40 percent rally just to catch up with the average for the rest of Asia.''

LISTING OF FINANCE COMPANIES WHO HAVE GONE BUST DUE TO PROPERTY SPECULATION AROUND THE WORLD. THE SAME CAN HAPPEN IN THAILAND IF YOU CHOOSE THE WRONG COMPANY TO INVEST IN


 

THE PROBLEM WILL BE CAN THAILAND STAY ON THE SAME WAVELENGTH OR WILL FINANCE COMPANIES CRASH ONCE AGAIN. BANKS ARE MUCH BETTER IN BORROWING BUT THE RAMPANT CORRUPTION BY THE EX GOVERNMENT IS STILL APPARENT AND SOME BUIILDING AND INVESTMENT COMPANIES HAVE OVER BORROWED.

 

 

Bridgecorp NZ & Australian investors CRASH

5:00AM Wednesday August 01, 2007  by Adam Bennet By Roger Armstrong
Monday 1st April 2002 Bridgecorp Holdings fancies itself as a fast growing, low-risk finance company that's unfairly blocked from listing on the NZSE's mainboard. But the NZSE could be right.
"Minimise the risk", exhorts a TV ad for Bridgecorp Holdings, seeking investors for its secured debentures. Good slogan and great ad campaign, too. My favourite is the one with William Tell shooting the apple off his son's head - only the apple is about five times bigger than the kid and Tell senior is standing at point blank range. The point, like Tell's target, is hard to miss: Bridgecorp is saying it offers one heck of a low-risk investment strategy.

It started in 2006 Three finance companies have been placed in receivership, with the future of $300 million of investors' funds uncertain. Provincial Finance Limited and its subsidiaries Consumer Credit Limited and South Auckland Cars Limited crashed.PricewaterhouseCoopers were also appointed receivers for Auckland-based finance company National Finance 2000 Ltd last month.More than 2,000 investors has invested about $25.5 million in NFL.

 
IN AUGUST 2007 BRIDGECORP WENT BUST:

Investors in Rod Petricevic's failed Bridgecorp might recover 25c in the dollar and wait 6-12 months to receive anything back. John Waller and Colin McCloy's the receiver's initial review of Bridgecorp's finances has revealed it was in worse shape than initially thought which is typical of Enron etc. They also uncovered potential breaches of the Securities Act. They said investors may get 25c to 74c in the dollar of their investment but who knows. That money would be paid out as Bridgecorp's 69 loans, worth $393 million, were recovered."As a result it would be prudent to assume that they will not obtain any recoveries in the next six months."Pensioner Don Jefferies, who sank $5000 in the company days before its fall, said: "There must be a number of people who feel aggrieved that their money was taken [by Bridgecorp] at the 11th hour. UP TO 18,000 INVESTORS ARE AFFECTED.

"Alex Tee, who had $60,000 in Bridgecorp, said he was pleased he would get something back. He was prepared to wait longer to recoup as much money as possible.The review acknowledged the wide range of potential returns but said there remained "considerable risks and uncertainties relating to the recoverability of significant loans and receivables".Bridgecorp, in receivership since July 6, lent mostly to property developers but struck trouble after some projects, including one in Fiji, defaulted on repayments.Many of Bridgecorp's better-quality loans had been sold to cover payments to investors, who are owed $458 million, "leaving a loan book which is much more difficult to recover".The wide range also reflected Bridgecorp's $151.7 million in overseas loans, mostly to Fijian and Australian developers.If fully recovered, those loans would represent 34c of the 74c upper payout range.

However, "the level of recoverability is subject to a number of issues, including political uncertainties", said Mr Waller and Mr McCloy, of PricewaterhouseCoopers.They said their analysis showed the company's exposure to bad loans was much worse than indicated in management's June 30 balance sheet.The Herald understands the possible breaches of the Securities Act referred to the Securities Commission relate to the company's prospectus not being a true representation of its financial position as it continued to accept funds in the months leading up to its collapse.It also has about $30 million in unsecured capital notes on issue.The receivers will contact debenture stock investors this week. Receiver John Waller says he does not like giving such a wide range for the amount likely to be recovered on behalf of Bridgecorp's 18,000 small investors but there are a number of difficult loans which have to be recovered, including $157 million lent in Australia, Fiji and other countries. The outstanding amounts include a $50 million loan for a development in Fiji. He says it will take time to recover funds, particularly amid political and other uncertainties.

The crisis still has a long way to go, according to investment guru Jim Rogers, a New York-based fund manager and former partner of George Soros

According to the REINZ July NZ property price report, the national median house price dropped 0.7% to NZ$345,000.

ANOTHER NZ FINANCE COMPANY CRASH

Another finance company, Nathans Finance, CRASHED taking its parent company with it. The New Zealand Stock Exchange has suspended trading in listed vending technology company VTL Group, after it announced it was insolvent due to a Companies Office investigation of Nathans. Nathans Finance, investors stand to lose $NZ150 million ($A131.4 million) from debenture investors, & lends the bulk of its debenture money to VTL. "We don't have a sub-prime mortgage market like the US but what we do have is a consumer finance sector on steroids." This latest collapse will make it harder to raise money from investors, at least in the short term.VTL was due to repay Nathans almost $80 million at the end of June.Nathans also lent $53.4 million to VTL's franchisees to buy the vending machine franchise and equipment in New Zealand, Australia, the United States, Britain and Europe.As well, it provided commercial finance worth $13.4 million to a range of unrelated companies. Its the 5th finance company in the past year, with the risk that more may follow.

The growing role of unregulated finance companies in the property market, the advent of sophisticated hedge funds in currency markets and globalisation have helped change beyond recognition the environment for monetary policy since the Act was written in 1989.

USA 2007:PROPERTY INVESTMENT

A further example of the crisis in the market came yesterday when American Home Mortgage, the 10th largest lender in the US, said it had been forced to close almost all its operations and lay off close to 7,000 workers immediately. Chief executive Michael Strauss said: "Unfortunately, the market conditions in both the secondary mortgage market as well as the national real estate market have deteriorated to the point that we have no realistic alternative."

Bear Stearns had a hedge fund, that they are now bailing out $3 billion in cash. This hedge fund in turn threatened to blow out the CDO market, which is the "insurance" for the MBS and ABS (Mortgage- and Asset- Backed Security). Real estate get rich quick buyers beware.

The CDOs are about to hit the market. That, plus the housing market collapse is going to be another headache for the financial system. Peter Schiff, president of the Connecticut-based Euro Pacific Capital, warned about a potential "catastrophe" in the CDO (collatoralized debt obligations) markets, due to the Bear Stearns hedge funds collapse. "As long as these CDO bonds stay off the market, as they universally have, asset managers have the luxury of 'marking them to market,'" "Not surprisingly, using this method the vast majority of these bonds are valued at par or greater." But if the Bear Stearns bonds were auctioned in the open market, their real values would be exposed. "This would force other hedge funds to similarly mark down the value of their holdings and they are not worth much

Australians have heavily over borrowed. They borrowed 10 times as much in the last 9 months as NZ'ers did! (That's the equivalent of NZ's TOTAL mortgage debt in just the last 9 months! i.e.$90 Billion). Australians now owe over $570 Billion in mortgages, that's nearly 6.5 x NZ's $90 Billion. (Aust population is only 5 x NZ's) NZers only borrowed $9 Billion in the last 9 months. UK borrowings are increasing by around 9 Billion Pounds per month) The UK owes 800 Billion pounds.

BUYING A CONDO IN THAILAND & PROPERTY:

OUR ADVISE IS DO A STUDY ON THE COMPLEX BEFORE YOU BUY AS AT 2007 AND DO NOT BUY PROPERTY (House and Land) UNLESS YOU HAVE A THAI COMPANY AND BUSINESS IN GOOD PROFIT MODE. MANY THAILAND PROPERTY COMPLEXES ARE FEELING THE PINCH FROM 1/. Increased mortgage rates 2/. Over spending by the consumers buying in anticipation 3/. Increased oil and material prices 4/. Under budegting & relying on sales volumes to cover outlay expenses

A foreigner can ONLY own a condo in his/her name. You cannot own a house and land in your name unless you invest 40m baht  = 1 Rai of land. Bank's do not lend to foreigners; only Thais or Companies. We can not assist you with any mortgages so please ask your Bank.

Just a note about buying Condos. ---Find out what the monthly maintenance costs are from the managers and if a management program is in place; ALSO THE SINKING FUND. Never give a deposit for a condo before you do your preliminary checks. Get it in writing signed by 2 witnesses as this holds up in Court. Avoid unfinished projects as they may run out of money or be under capitalized and be careful of projects that have started then stopped then resumed again . If the steel construction has gone rusty then chances are the additional concrete added will not be to safety specs and the condo is unsafe. If very few condos have been sold in a building with good amenities like landscaped grounds, security Guards and a receptionist and office have the title searched but most of all someone has to pay for all this, plus the electricity for lighting and lifts. Try and check if the downpipes are sealed in concrete as if so stress and tension will crack your lines-- now a common fault in concrete constructed complexes. Has the complex got a dry fire riser on each floor and what about extinguishers & smoke stop doors on each floor. If not and you have now bought your condo it may pay to invest in a parachute or drop ladder?? All piping from floor to floor should be self alone with easy access to maintain and not built into the concrete..

The total cost (often inflated) has to be divided up among the condo owners, which can be a lot if only a few units have been sold. Ask for an exact statement of maintenance costs and how they are paid. If the project has different size condos in the same building, large units will pay more towards maintenance costs than small units. If you are a legal resident you can obtain a mortgage but you need to check with your bank and credit arting. The best idea though is pay cash as you can negotiate. In Bangkok look at around 48,000 -100,000 baht per sq m. A foreigner can only buy max 40% of a condo unit so if that 40% has been taken up and you are the 42% person you may find you are buying a lemon so to speak. If the developer owns a majority of units you may not like his manager but if the owners have majority votes than they can remove him. Check title before you buy --maintenance clauses --- and payment funds as well as 49/51% ownership on titles in the condo. Check rubbish, security, office staff, cleanliness, maintenance before you buy etc.

The Condominium Act has recently been amended. Now 49% of units in all condominiums and  100% of units in condominiums in a total development area under 5 rai located in Bangkok, all municipal districts and such other areas as shall hereafter be announced by the Minister of the Interior (which is expected to include rural Phuket) can be foreign owned, provided that the funds for the purchase have been remitted from aboard (which is the already the norm).

THAIS BUYING CONDOS

The main risk is borrowing from the bank and can one service the mortage of the condo they wish to buy. Low deposits and 30 years to pay is a long time to pay back a loan especially when many and forget the sales talk of high rental returns and fantastic capital gains -- this is total rubbish. I have seen Thais scramble to buy a condo complex in Chiangmai near Carrefoure and the sales pitch was this area will be the CBD of Chiangmai and foriegners will flock to the area. Oversubcribed within 6 months 2 floors had Thai owners who had second thoughts and started to deaault on repayments. To date 2 years later nothing has changed let alone no CBD has been created??? Remember Thais have credit cards; a car on finance and other monies to pay before you look at the basic cost of living. Telephone marketing by bank staff on commission today allowing Thais access to money for cars, bikes, businesses etc is on a high to get even more Thais into debt. Yes bedt as thats what Taksin Shinawatra has done to the majority poor people in Thailand. Think about it. Marcos (Phillippines) Suharto ( Indonesia) used the strategies is you give plenty opf money to the poor you indebt them fast. They then become pawns for the ruling party. Shinawatra did exactly the same and look what is now happening in Thailand. Remember gasoline has tripled in 10 years and the cost of utilities increased by the same amount.

Here is a simple rule immaterial of the interest rates: When you borrow 1m baht heres what you will pay back: you X it by 2 which is now 2m baht and halve it again ie 50% of the loan = 2.5m baht you will pay back over the loan term. This is a safe rule of thumb as you must look at interest rate rises; changes in your income; utility and cost of living rises; inflation etc. Its now a lot of money to pay back and can you service this loan??? Think about it. It so easy to borrow and once you get your loan you are on a high but 30 years is a long time to wait --- in fact a lifetime of paying back money ---- can or will you be able to do it; what happens if you have an accident or injury or your life changes --- "Once your mortgage goes up, for the first couple of months you might manage, but then you start getting behind,"or you want to buy a new car or find out you have used your credit card too many times. This is when you start to stress as you have budgeted from the start using your income to pay back when suddenly these cnages in your life make repayments. Do not listen to sales pitches from Realty staff as they are only interested in their commission not your ability to repay your loan. Only buy if you need to buy and have the spare cash. Do not buy because you feel its a good deal. and you think in 20 years time you will have a bargain as it will not match your repayments. Better to only have what you need.

WHY INVEST YOUR MONEY IN A FINANCE COMPANY

TO A PERSON YOU DON'T KNOW THEN LOSE IT ALL

As more finance companies are going against the wall why are you investing and entrusting your life savings to a finance company. Finance companies undermine monetary policy with a cost advantage gained by attracting deposits from "illusionary" investors who do not realise they are lending money at rates too low for the risk they are taking. If this sector were subject to the same continuous disclosure obligations as listed companies the flow of discounted money into the property market would reduce, and cool that market.

Our advise don't invest in Finance Companies at all --buy some gold & silver instead or wait as a bubble is starting to grow & control your money yourself. Buy the gold but put into your own bank at home (don' trust banks as they can fold too) & definitely not the sellers. Do not buy Gold certificates either.. Safeguard your fund yourself and do not entrust in a finance company who SAYS they have a portfolio too good to be true.

WHY USE OUR SERVICES: 

  • We work for you (Both Thai & foreign consultants )
  • No hidden charges-everything is up front.
  • Guaranteed conveyancy help &  Company, work permit & land  setup for foreigners
  • We will sell your Commercial property, houses, businesses, bars and Guest Houses
  • Because you have the benefit of foreign help with our Thai lawyers and expat consultants
  • We offer: Full house onsite appraisals. Cost is 3000 baht for a house under 2 years old & 6000 baht for older houses ( plus travel if out of town ). This 5-6 page report is a must if you want to know what your house is really like which includes pics of repair work needed and we even do a air con survey (extra).

WHY USE OUR SERVICES: 

  • We work for you (Both Thai & foreign consultants )
  • No hidden charges-everything is up front.
  • Guaranteed conveyancy help &  Company, work permit & land  setup for foreigners
  • We will sell your Commercial property, houses, businesses, bars and Guest Houses
  • Because you have the benefit of foreign help with our Thai lawyers and expat consultants
  • We offer: Full house onsite appraisals. Cost is 5000 baht for a house under 2 years old & 6000 baht for older houses ( plus travel if out of town ). This 5-6 page report is a must if you want to know what your house is really like which includes pics of repair work needed and we even do a air con survey (extra).

BANGKOK REAL ESTATE Please go to : www.bangkokrealty.biz

[ THAI LAW HELP SERVICE ]:  We have many more properties. Just ask us. Let us broker your business or property. If we don't sell we don't charge you.  Selling or wanting to Buy a Guest House, Restaurant, Business, Bar or Office then just ask us. We do not charge you to find your business. We even guide you to the best deal & help you form a company, partnership, year visa, agreements, leases, accounting services, taxation etc right to offering you FREE hardcopy promotions if you use our services.

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