Novel Ideas About Real Estate Investing With Little Down Money

The on-going financial crisis has frightened a casual investor from entering the real estate business. In fact, people have always been scared of dealing in real estate because a casual investor thinks that real estate is a game for those people who are loaded with cash. To an extent, they are right since most of property transactions involve lots of initial investment. Presently, in an environment of financial uncertainty, people are not taking any risks with their money. To be very frank, their attitude is very suitable in the current crisis. Still there are many ways in which you can invest in the real estate business. You don't need to invest your own money; rather, you apply some techniques that require minimum upfront investment. These are time tested techniques and have been used by professional real investors. Some of those techniques are listed below. You need to be very patient in their Application since no seed bears fruit immediately. But it is impossible to fail if you are hardworking, honest and sharp.

Double escrow - buying and selling simultaneously

Application Development

This is a very practicable method of investing in the real estate business with minimum capital. The method is very simple but needs certain amount of coordination and great timing. What you do is buy a property from seller at a discounted price. You must convince the seller that you will be able to make the payment after a short period of time. Within that time, you find a buyer for the same property but insist on immediate payment. When you receive cash from your buyer, you use that cash to pay off the seller. Your profit will be the difference amount of the buying and selling prices.

The profit that you make in this investment can be used for buying another one. In this way you can make a career out of your real estate endeavors.

Flipping or Fix and Flip

This is another feasible alternative to making money in the real estate business without investing your own. The process involves buying property or a house for less than its market value and then selling it for profit after getting it repaired and applying face-lift. It must be understood that there is much more to it than just buying, repairing and selling. In order to successfully flip house you must take into consideration the following points:

Be on the look-out constantly

This is a trait that you must develop if you have decided to flip properties for living. You must always be searching properties that could be bought and then, sold after minor adjustments. You must also let all your acquaintances know that you are into this business. Make sure that whenever a property comes up in the market, you are the first one to hear about it.

Convert Information into deals

The moment you receive news about a potential sale-out, you must be the first one to visit the place. Remember, your success in this business depends on how fast you can move. If the property is suitable cut the deal immediately.

If you keep in mind the above points, there is nothing that can stop you from becoming successful.

Novel Ideas About Real Estate Investing With Little Down Money

Very Important Information You Need to Know Before Investing in Koh Samui Property

Koh Samui, Thailand

Koh Samui, Thailand has long been the locale of choice for paradise seeking foreigners from all parts of the globe. Its shimmering turquoise waters and sun bleached, white sandy bays are lined with bungalows, villas and resorts. Its happening night life with a plethora of restaurants feeds the epicureans and provides a magnificent back drop to beautiful sunsets and starry nights. It's no wonder that so many foreigners want to own property in Koh Samui, but like any other property market in the world, it's important to know understand the legal implications, visa requirements, and tax guidelines involved before deciding which property you are going to invest in.

Application Development

Getting To The Island

Before investing in Koh Samui property, you must first feel confident that traveling to and from the island has been made easy and convenient for tourists. After all, they play a major part in helping Samui's economy grow and helping tourists get to the island should be top priority. The most convenient way to get to Samui is by flying with Bangkok Airways from Bangkok, Singapore, Phuket, Pattaya, and Chiang Mai. There are 15 daily 80 minute flights between Samui and Bangkok and 4 weekly 90 minute flights between Koh Samui and Singapore. Alternatively, several ferries and catamarans run from Surat Thani or Don Sak on the Thai mainland. There are almost 10 daily departures between Samui and Ko Pha-Ngan.

The Samui airport is a unique and highly successful experiment in building an airport that is kind to both the cultural and natural environments of a tropical island resort. Flying in, you get brief glimpses of outlying islands, streaks of surf, the wakes of small fishing craft sketched across the calm aquamarine sea. Smudges of coral reef dapple the water as you come in closer still. Then the coast of Samui appears. Two hundred and fifty kilometers of tropical hideaway scalloped by dozens of bays rimmed in white sand, carpeted in lush textures of forested hill and coconut grove, Samui is the centerpiece in a group of 80 other islands set in the Gulf of Thailand.

Located 2km north of the main village Chaweng, Koh Samui Airport serves both domestic and international flights including Bangkok Airways, Thai Airways International, Berjaya Air, and Firefly.

Koh Samui Property Tax Guidelines

If you've already done your research and you are looking to invest in Koh Samui property, you really should understand how the tax liability can affect your overall return.

All Koh Samui property owners in Thailand are liable for tax on rental income, which is based on either standard personal income tax (PIT) rates for "resident" tax payers and a at 15% PIT rate on assessable income for non-resident tax payers. A person becomes a "resident" tax payer if he or she spends more than 180 days in any tax year in Thailand. Thailand does not charge a separate capital gains tax for foreign buyers. All earned income from capital gains is taxed the same as regular income. The highest rate of income tax is currently 37% per year.

When purchasing property in Koh Samui, it is quite standard for the purchaser to be solely responsible for the payment of all transfer fees as well as taxes duly charged by the competent land office in connection with the registration of transfer of ownership of the property. This includes the government transfer fee, withholding tax and specific business tax as well as stamp duty and other costs and expenses arising out of the registration of the transfer of ownership to the purchaser.

Transfer fees are typically 2% of the registered value, stamp duty is.5% of registered value, withholding tax is 1% of the appraised value, and business tax is 3.3% of appraised value. Income tax is usually between 1-3% on Koh Samui property. There are no established rules regarding who pays the income tax while this is simply another part of the bargaining process during the property purchase as are all other costs relating to the transfer of ownership. Tax on Rental Income is 10-30% of rental income depending on the type of property. Lease Registration Fee is 1.1%

Transferring Money To Purchase Samui Property

Unlike most developed economies where transferring money to and from bank accounts is relatively straight forward and easy, this is NOT the case in emerging markets like Thailand. Before purchasing property in Koh Samui, it is very important to understand exactly how to transact and what needs to be done prior to purchase. Reason for the complexity of this issue is because of the Thai laws concerning Foreign ownership of Condominium Property. According to Thai Law, foreigners may own 49 percent of the aggregate sale-able unit space of a condominium building while the remaining 51 percent must be owned by either Thai nationals or majority owned Thai Companies. Below is a step by step guide on how to transfer money when dealing with Koh Samui properties.

A Thai bank account must be set up in your name in order to transfer money to yourself before exchanging your currency to Thai Baht. Any foreign currency can be used to purchase a condominium unit. The foreign currency must be transferred into Thailand as foreign currency and then exchanged into Thai Baht by a local bank in Thailand. In many cases, the developer may offer to help you establish a bank account in Thailand due to the complexity of establishing an account yourself. This may come at an extra cost, however developers are always willing to negotiate or waive this cost if it helps get the deal done. Foreigners are required to remit at least USD 20,000.00 into Thailand per transfer to receive a FOREX Transfer Form. (Transfers of funds must be made in FOREIGN CURRENCY only and NOT in Thai Baht, i.e. if you are working in US Dollars then remit in US Dollars. Do not remit in Thai Baht. This form will be needed to transfer the unit under foreign ownership and also remit money back out of Thailand if so needed in the future. Documents needed when buying a condominium: For foreigners to be eligible to purchase a condominium unit in Thailand they must present proof to the Department of Lands that the funds have been remitted from overseas in foreign currency. Without such proof, the Department of Lands will not register the transfer of ownership to the foreign buyer. Remittances must be sent in exactly ("to the letter") the same name as appearing on the purchase contract, (i.e. if Tom Smith is the buyer then the name Tom Smith must appear on the remittance advice. T. Smith or Smith Enterprises are unacceptable.) If the buyers are two individuals, then two names should appear on the contract and two separate remittances should be made by such two persons, in equal amounts. The purchaser has to include the transfer instruction indicating that the purpose of this money is to buy a condominium unit. The bank that receives money in foreign currency will issue the document (Foreign Exchange Transaction Form) which contains the following information:

The transferred amount in foreign currency The transferred amount in Thai Baht The name of money sender The name of money receiver The purpose of transferring

Normally throughout the transfer process, the purchaser has to instruct the gateway bank to identify the name of the sender to be the same as the receiver's. The Land Department will accept the name of purchaser to be either sender or receiver of the transferred money.

**Remark**

If the money receiver is an individual but wants to put the unit in the names of two people, the sender has to instruct the gateway bank to specify the names of two people together with the purpose of buying condominium.

For example:

Mr. Smith transferred money to Mr. John and would like to put down the names of two people, Mr. Smith must also instruct his bank to specify the purpose as being to buy the condominium by both Mr. Smith and Mr. John. In this case, the land department can accept this and permit the transfer.

The Land Department also can accept the transfer even if the sender's name of the receiver's name is not the purchaser's name but the sender should instruct the gateway bank to put the purpose as being to buy the condominium by (Purchaser's name). The amount of money must be equal to or higher than the selling price declared to the Land Department.

Alternatives To Transferring Money To Purchase Koh Samui Property

For the avoidance of any doubt, we recommend wherever possible that Samui property buyers arrange for their local bank to issue the Foreign Exchange Transaction Form for all remittances. In this case you would transfer the funds directly to the Developer's bank account in the prescribed format, and the Developer will arrange for the Foreign Exchange Transaction Form to be issued by the Developer's Bank.

For the buyers convenience, we strongly recommend that you transfer the funds directly to the Developer's bank account, but ONLY do so if you know and trust the developers and know exactly where your money is going. In most cases, the developers will use a third party escrow arrangement typically put together by a local attorney. This is always the most secure way to exchange contracts as the developers are not allowed to access your funds until the title deed on the property has been transferred to you.

Why does the developer need to use Foreign Exchange Transaction Form?

Because the Bank of Thailand controls the flow of foreign currency, every single baht must have a source and a reason. The Land Department must perform in accordance with this regulation. By this restriction, every foreign buyer must transfer money from abroad. Non-residents who sell the condominium and transfer the money out of country do not have to pay the remittance tax (normally the tax is around 30%) In case of transferring money out of the country, the tax-free amount is determined by the initial amount transferred.

Transfer of title deed Documents needed: For Individual Purchaser

Passport (copy if applicable, marriage/divorce certificate including a letter of consent From your spouse if married [Thai Language]). Foreign Exchange Transaction Form or credit note. Power of attorney, if anyone but yourself is representing you, in Thai script with a Notarization by Notary Public or if overseas by the Thai Consulate.

Corporate Documents needed: For Company Purchaser

Certified copy of the certificate of incorporation Certified copy of the memorandum of association Notaries certificate List of shareholders (in English, but must be accompanied by a Thai translation) Minutes of directors' meetings, which have a resolution to sell/purchase the property (specifying name and number and agenda dealing with the finance of the purchase if the company's registered capital is less than the purchase price) Letter of advice regarding specific¬ signature Power of attorney, if the authorized directors do not make the transaction by themselves (Land Department form) Free debt letter Foreign co-owner letter The certified copy of the I.D. Card of the authorized directors The certified copy of the house registration of the authorized directors Title deed of the condominium unit

Thai Visa Requirements

Please note that whilst we believe the below information is accurate, it is recommended to verify requirements with the Royal Thai Embassy before travel.

Many Non-Thai residents require a visa to stay in the country for more than 30 days. However, most African countries require a visa to enter Thailand - Cyprus, Czech Republic, India, Maldives, Oman, Poland, Russia, Saudi Arabia, Taiwan, Ukraine are allowed 15 days under the visa exemption. A Non-Immigrant Visa is valid for up to 90 days, but can be extended for up to a year at a time, depending on eligibility criteria. Retirement visas for individuals over 50 years old are readily available, subject to certain other criteria, tourist visas for stays of more than 30 days and less than 60 days and work permits for those with specific skills can be applied for via the Thai Embassy or consulate in your home country.

Use An Investment Firm Or Relevant Developer To Assist You With The Purchase of Your Koh Samui Property

Well you can't say we didn't warn you that purchasing property in Samui would be extremely complicated which is why we strongly suggest that you use a real estate agent or investment firm to assist you with the purchase of your Samui property. Often times the developer or agent that you are purchasing the property from will do everything they can to make this process as affordable and convenient as possible. After all, it's in their interest to get this property deal done, and they should be more than glad to help you through it. Another reason it is beneficial to use the developer or registered agent, is because they already have the experience and connections to get you through this transaction. Because they've transacted several times before on Koh Samui properties, they know exactly who to go to and for what circumstance. It is very likely that they already have escrow arrangements established and banks in place to handle all of the paper work for you. In many instances, they may even use their company as the "buyer" and then issue shares in the company which then gives you legal ownership. This method of purchase avoids the issue of only being able to purchase 49% of a unit due to Thai law.

Very Important Information You Need to Know Before Investing in Koh Samui Property