Breakthrough ! Issan sustainability problem finally resolved

[buffalo_bill]

Gentlemen ,

 

to make you understand my further moves I would like to make it clear that to my definite opinion a slow , educated , peaceful afternoon boom-boom is no doubt one the great achievements of the human race . Preferably within a safe ambience , hidden from hyperventilating husbands and wives appearing on scene unexpectedly. So now read further .

 

In the early hours of Wednesday the 15th of July we left Bangkok eastbound course set for Nakhon Ratchasima , lovely Nok's hometurf. Target being site inspection and purchase of 2 1500 l water tanks . One for [color:red]water rainy[/color] , one for [color:red]water come from outside[/color] . Passing along Don Muang a table and 6 chairs had been added to the list , I do not wish to elaborate any further on this matter . True love means dealing with collaterals .

 

Over the last maybe 2 years I have been researching the Isaan for anything that could be developed to support a local family including breeding cows, ostrichs, chicken , pigs, worms , frogs , you name it . A later move into the semi-industrial field of making ice or other led me to the conclusion that the Isaan citizen is simply not made to run a business , let alone overcoming the problem of the widely spread lazyness . I must admit that this journey was the last one on my list of researching local possibilities though travelling through the Isaan is generally great fun .

 

It was late afternon when we left Korat city center , Khun BuBi tired and separated form a hard life's savings when we turned away from the highway and were cruising through the local rain forest when I noted a signpost saying something in Thai with a arrow pointing awy from the road . Funnily there was red heart painted on that signpost . I asked the driver if there is a gogo in the bush and he said it is in fact a short time hotel . I said like what does a short time hotel in the middle of nowhere and he said we have a look . We found a fenced area of maybe 2 Rai with a cluster of 10 wooden sheds , all with separate carpark and a shed No. 11 , operational center of administration . 6 of the 10 carparks were occupied , due to clever design neither numberplates nor type of car could be identified .

 

I was pleased to see that apart from dreadful rice farming the Isaan citizen seem to have some sense left for entertainment left and we continued the journey . Driver explained people pay 500 Baht depending on equipment and comfort and there would be many , preferably near the main road . He did further say that they rent the rooms for travellers in the evening and they are all full . He himself would prefer to find a room for himself right now in fear of unsuccessful research later on . It was than that I asked the guy what the price was for his room and he answered 50.000 . Freudian misunderstanding as I wanted to know the overnight rental rate and not the building cost .

 

It took me almost half an hour to figure that 50.000 Baht is something close to 1000 Euros and I said to him this cannot be . Both Nok and him stated yelling at me that this was normal and I said we go and have a look . Next destination Starwood (?)Bali resort Khorat , they call these properties " Resort " . Driver booked a room ( cash in advance ! velly good system ) plus a 500 Bht deposit for losses from the fridge and we examined the room . Nowhere close to falang standards but looking nice . Price was 550 plus breakfast .

 

After dinner we travelled along the mainroad and investigated at more 6 places and all of them were fully booked . Number of rooms between 10 and 54 .

 

Rough estimation :

 

750.000 = 10 houses at 75.000 each

1.000.000 = land

500.000 = infrastructure , restaurant

--------------

2.250.000 = preliminary total cost

 

 

Selling potential 300 rooms / month , realised 200 at 450 Bht resulting in about 1.000.000 / year . Adding another 10 units will make the revenue explode . I am a lot further with detailed planning , about cash the local bank will easily finance 50 % once you show the other 50 .

 

The final trick is that a whole Isaan family could be integrated into such a setup at initially low cost for a while , that there is a lot of cash surplus to pay the bank and BuBi and that it is finally greatly entertaining .

 

What ya think fellow bretheren , kinda goldmine innit or is ze BuBi wrong again ?

 

 

[waerth]

What do the family know about running an hotel ?

 

They'll have to do maintenance etc. Cleaning the rooms. Familymembers without a home might be given one of the rooms ...

 

It definately could work though.

 

W

[shygye]

... as long as you don't have all the relatives living there for free.

 

Must need some sort of license to run a hotel. Don't forget utilities and furnishings.

[Bangkoktraveler]

Don't get me going.

 

wife is in the process of building an apartment/hotel whatever in Bangkok. She wants a small grocery store, karoke, washing machine room, hair salon, and whatever else she can think of.

 

I guess you can make money and I guess I will find out if she can.

[bust]

I can think of easier ways of doing you money.

I have always believed that the funds you would invest in LOS instead invested back home would surely provide a reasonable lifestyle.

 

I guess the trick is to remain unattached.

 

If BuBi as you say your general observation of the Isaan folk is they are lazy you will be the one running the place if you want it to survive or does that defeat the purpose of the exercise?

[rchapstick]

Some random thoughts BuBi...

 

1. This is one of those businesses where it is all about location, location, location. Obviously potential trade-offs in how much you pay for the land and the potential traffic at the location.

 

2. I've found Thai's tend to be very comfortable with "me too" businesses, but put little thought into how to differentiate their business form a competitors. Do you have ideas on this? Are there ways you could market the business beyond the "heart shaped roadside sign"?

 

3. Does the girl/family REALLY know what they are getting into? This is one of those businesses that SOUNDS easy in the abstract, but is like to be a lot of work in reality. Is there any way you could get her a job at a similar establishment where she could get a feel for the business prior to your making the 2mm baht investment? Better to get the reality check on someone else's investment baht.

 

4. Can you possibly buy an up and running, but perhaps poorly managed resort, and clean it up a bit? Perhaps a cheaper and faster way in the business.

 

Just some thoughts. Good luck to you and the lass.

[CTO]

Bubi these places are all over Thailand - you cost of building is fairly accurate except the plumbing is a bit low comparing to standards and recent trends.

 

Also your rental pricing is too high.

 

For a standard "Room with fan and shower and toilet" the rate is 120 - 200 baht for 2 hours.

 

To unlock or get a room with Air Con is 150 - 300 baht.

 

Not many people stay the night ever.

 

In Sawang Dan Din the resort there is truely stunning - they spent 2 years and a lot of money to build - rooms are 640 a night but even in a busy town like SSD last night only 3 rooms full.

 

These places rely upon "short Times"

 

Most important part is to get local permission - a place near us - was delayed 2 years from opening as the village down the road (4 kms) complained they didn't want it.

 

You will also need to register with police etc - and you will be watched for "illegal" activity especially if a farang is around.

 

I use these places a lot as living in a nice house with a large family the wife and I do like to get away from everyone!

 

The trend over last few years is the places become nicer - and prices have dropped a little.

 

Often when one opens they have a large morlam to let everyone know!

 

I also considered this but given virtually all rentals are by 2 hour lots and the amount of younger people who use the places - I didn't want the drama's that will come.

 

Note also the place that was kept closed is now open for 6 months - within first month they had a murder!

[CTO]

PS - I don't think they are lazy - in the areas I am in they work pretty dam hard for a scrap pf money.

[Khun_Kong]

BuBi-

 

My Thai ex-wife's business...

 

Really good girl from Isaan, Loei to be exact. She's now 42-43 years old. Known her for ~8 years, Was with her for about 4+ years, then split because of her jealousy and my philandering. Still very good friends and I still give her a few thousand baht each month to help her and the family. The support will probably continue until I die, at which point she'll get a hefty chunk, 50% or more, of any estate that I have. She doesn't know that last bit yet- no sense tempting bad fate!

 

Anyway, I had put her through beauty school for 10 months, after which I financed a small beauty shop for her in a mostly Isaan neighborhood near Victory Monument and about a 10 minute walk from our apartment. This cost less than 50,000 baht.I still live at the apartment, she lives in the shop that she's been running for about three years now. She lives with an older Thai guy who makes a modest ~10K/month income.

 

Originally, we rented the ground floor of the 3 story shophouse where her salon is located. I think she/we were paying about 4K/month rent. The guy that she was paying rent to lived upstairs, but, other than he and his family, the upper floors were empty. She got screwed a bit on this subsubsubsubsublet when the guy she was paying took off with a month's rent and ~6000 baht security.

 

Anyway, the real owner offered to rent her the entire building for 6500 baht/month. She has her shop on the ground floor, where she and her guy live. She made 6 small rooms with plywood walls on the upper floors, which she rents, to women only at rates varying from ~1400-1800/month. That and the income from her shop brings in a total of around 15K/month.

 

Sometimes she'll have an empty room for a few weeks, especially in this downturn, but generally she runs at full capacity. There is one communal bog and shower on the ground floor. She pays all water and electric, and, including rent, probably nets about 7-8K/month. It used to be more, but the business in her salon has dropped along with the sinking Thai economy. There are at least 3 other salons on her block, all more upscale than hers. She says they are all struggling. She recently started doing washing for people, bringing in some extra cash. No ironing though, as that would directly compete with a nearby family.

 

I have a spare air conditioner that I recently picked up and I'm currently considering donating it to her, as hers is the only non-air con shop on the soi. She said she wants to think about whether it would be worth it before she takes it. She has a pretty good business sense and a marvelous work ethic, especially for a women with only a 6th grade education. From day 1, she has maintained a detailed daily log of all of her income and expenses, showing exactly what customer services she did that day (2 washings, 1 coloring, 2 ladies cut hair, etc.) and how much she got from each customer.

 

Even though I believe that my girl is one of the RARE truly honest and hardworking girls, I think you have to carefully assess YOUR girl for her business sense. Proper maintenace, record-keeping and avoiding family freeloaders would be critical to your proposed operation.

 

You may have to deal with jealousy/turf wars with the locals and, if you are doing ANYTHING that is not completely aboveboard, expect to see men in uniforms with outstretched palms.

 

And yes, she comes over about once/month to cut my hair. No sex, just still good friends.

[khunsanuk]

Hi,

 

"From day 1, she has maintained a detailed daily log of all of her income and expenses, showing exactly what customer services she did that day (2 washings, 1 coloring, 2 ladies cut hair, etc.) and how much she got from each customer."

 

I have been trying to get my wife to do the same, but all to no avail. I seriously doubt she has any real idea of how much money she makes with her shop.

 

Sanuk!