Circus Soi 4 for sale...

[floridarob]

I brought up years ago the idea of the gringos in the Brasil forum, pitching in to open a sauna, nothing ever came of it, obviously....

But here's a chance to do something in BKK.... who's in, can we get @Olddaddy to start it off?



 

[reader]

Reportedly owner’s other bar (Pride) is also on the market.

[bkkmfj2648]

The rental description is confusing to me:

112,500 THB

(900k Key-money once a year Plus 37,500 THB rent each month)

What is 900k Key ?

What is 112,500 THB ? 

37,500 THB each month is self explanatory.

[zazzu]

58 minutes ago, bkkmfj2648 said:

The rental description is confusing to me:

112,500 THB

(900k Key-money once a year Plus 37,500 THB rent each month)

What is 900k Key ?

What is 112,500 THB ? 

37,500 THB each month is self explanatory.

They just broke down the monthly cost to include the 900,000 THB as a monthly fee instead of yearly.

900,000 THB /12 months = 75,000 THB per month + 37,500 monthly rent = 112,500 THB total per month.

[bkkmfj2648]

@zazzu you are brilliant.

I was a Finance Officer before I retired and I was not able to figure out this financial riddle.

Bravo!!

[floridarob]

1 hour ago, bkkmfj2648 said:

I was not able to figure out this financial riddle.

me too...what about the 5 million baht, is that in addition?

[vinapu]

14 minutes ago, floridarob said:

me too...what about the 5 million baht, is that in addition?

that's for the pleasure of being owner

rent is for pleasure for running it out that place

[floridarob]

what is "key money" once a year?

[Keithambrose]

Looks like the sale is of the business, not the freehold. I was told that the 'Owner' was a rather overweight farang? He would lessee, I imagine. I assume that freeholder is a Thai family?

[floridarob]

He's chubby but not old or crazy obese....Australian guy that used to own a massage shop off of Soi Convent, can't think of the name right now.

He made some money years ago in telecommunications supposedly and Bitcoin in the last few years. Seems to take care of the staff.

I sill don't understand the payments 🤷‍♂️

[macaroni21]

1 hour ago, floridarob said:

Australian guy that used to own a massage shop off of Soi Convent, can't think of the name right now.

Might this be Fan Club or Adonis Massage?

Might "key money" - which appears to be an annual payment - be euphemism for keeping the powers-that-be happy? 

[Moses]

The original origin of the term key money is from the Korean business model. There, the tenant does not pay monthly rent, but instead makes a one-time payment (very large), which the landlord puts into his bank deposit. At the end of the lease, the key money is returned to the tenant, and the income from the deposit is the rent.

This model is advantageous from a tax point of view, because officially key money is a deposit for the key to the property and is not considered the tenant's income. And the income from the bank deposit is taxed at a very low rate.

In Thailand, key money has become simply a rental payment, which is paid once a year, in addition to which a monthly payment is paid. The key money actually pays the rent, and the monthly payments cover the tenant's costs for utilities, services, etc., while the annual rental payment covers the costs of maintaining the building, repairs, annual payments to the state such as licenses and permits, and brings profit to the owner of the building.

[daydreamer]

4 hours ago, Keithambrose said:

Looks like the sale is of the business, not the freehold. I was told that the 'Owner' was a rather overweight farang? He would lessee, I imagine. I assume that freeholder is a Thai family?

The land of Soi 4, along with Patpong Sois 1 and 2 is all owned by the Patpongpanich (Patpong) family.  They are the descendants of Mr Patpongpanich, who originally developed the former banana plantation into the nightlife area we all know and love today.

The Patpong family home is at the end of Soi 4, behind the metal gates, past Jupiter.  Occasionally at night, when Soi 4 is loaded with customers, an expensive car will make its way through the crowd, and the gate at the end of Soi 4 opens to let it inside their compound.  I think the last time I saw the car make its way through the crowded soi, it was a large BMW.   

[jason1975]

Circus is on sale?

Last year, Hot Male was also put up for sale.

Are the owners moving on to other new businesses?

[reader]

6 minutes ago, jason1975 said:

Are the owners moving on to other new businesses?

Judging by the rumors, the owner of Pride and Circus has no plans to open new venues.

The owner of Hotmale seems more interested in consolidating his interests in Moonlight and the beer bar on street level.

[vinapu]

7 hours ago, floridarob said:

.Australian guy that used to own a massage shop off of Soi Convent, can't think of the name right now.
 

deleted, macaroni already answered

[floridarob]

12 hours ago, macaroni21 said:

Might this be Fan Club

That's it.

 

 

11 hours ago, Moses said:

The key money actually pays the rent, and the monthly payments cover the tenant's costs for utilities, services, etc., while the annual rental payment covers the costs of maintaining the building, repairs, annual payments to the state such as licenses and permits, and brings profit to the owner of the building.

So within these amounts, it cover elec, water, trash....and maint of the bldg?



Back to my original question:

Anyone interested in forming a group to invest/run this place....or are there underlying upcoming events that we aren't aware of, like what happened to Soi Twilight🥺

[reader]

26 minutes ago, floridarob said:

Anyone interested in forming a group to invest/run this place....or are there underlying upcoming events that we aren't aware of, like what happened to Soi Twilight🥺

That would be significant concern. Both Patpong and Soi 4 are parallel to one another and share the same ownership. An offer the owner could not refuse is indeed a possible scenario given that the parcels represent a huge footprint in Bangkok's business district.

[Keithambrose]

8 hours ago, reader said:

That would be significant concern. Both Patpong and Soi 4 are parallel to one another and share the same ownership. An offer the owner could not refuse is indeed a possible scenario given that the parcels represent a huge footprint in Bangkok's business district.

A concern!

[Patanawet]

8 hours ago, reader said:

That would be significant concern. Both Patpong and Soi 4 are parallel to one another and share the same ownership. An offer the owner could not refuse is indeed a possible scenario given that the parcels represent a huge footprint in Bangkok's business district.

ALL premises on Soi 4 are on annual leases (payable to 'the family', and always have been.
'Key money' is paid once a year at New Year. It has nothing to do with lease, rent or additional 'side payments'.

Last year, PRIDE itself was offered for sale to include all floors including the 3rd (U.S.) floor which the present owner used for his financial businesses. He has now moved this to Park Silom.

Original ad, last year, later withdrawn:-

 (Strange because this link states " NOTE: Sale does not include Circus Bar and Restaurant. ")
Last year:-


BUT latest is this:-

Owning a bar in Thailand is a serious undertaking to be done by people familiar with Thai business practices in particular the licensing trade.
Many practices here can be an anathema to those brought up in more 'organised' societies'. You are not going to change them, it is their country!
When I first moved here 25+ years ago, I bought a book called something like 'Doing business in Thailand as a foreigner'. No idea if it is still published.
If you still want to go ahead, try chatting to owners of SUCESSFUL bars. Then approach. Cameron with serious enquiries rather than occasional visitors who think it would be a nice idea.
And finally, get a Thai manager familiar with the scene who you would trust with your life. (and a similar Thai lawyer.).

 

[floridarob]

19 minutes ago, Patanawet said:

Key money' is paid once a year at New Year. It has nothing to do with lease, rent or additional 'side payments'.

SO what is the Key money for...just like a balloon payment or something....I don't get it.??

However, I'm in Mexico and we have a version of this statement, but they've tried to emulate US regulations/procedures over the years , but I'm sure Thailand is over the top

Many practices here can be an anathema to those brought up in more 'organised' societies'.

[Patanawet]

According to Google:-
Key money in Thailand can be legal, but it's not always clear what it is or how it's calculated. It's often demanded in cash, and landlords may not declare it to the tax authorities. 

[Keithambrose]

I went to Circus last night. Didn't recognise any of the staff, no Pao. Poor service, and fairly empty. Pride, across the street much busier.

[floridarob]

13 minutes ago, Patanawet said:

According to Google:-
Key money in Thailand can be legal, but it's not always clear what it is or how it's calculated. It's often demanded in cash, and landlords may not declare it to the tax authorities. 

Not sure why I didn't just Google it too 🤷‍♂️

Here is a post that's informative, along with all the other ones I saw.... so one of the unknowns is, how much longer left on the rental/lease contract....🤔

 

This is only relevant for tourist areas and a lot less for other areas.

Try asking for a receipt for the keymoney in a tourist area.

The landlord will laugh in your face.

Tax is what he wants to avoid hence the 3 year contracts and keymoney.

I know cases where the keymoney was the killer for the company after 3 years hard work. Be prepared to lose it all with only a 3 year contract.

If you get an extension and with the same condition, you found a good landlord. If not .. TiT.

Keymoney is an asset, one that gets smaller quickly with time. As such it is not worth anything to a business that wants to run longer than the rental contract. It is not an asset, it is a RISK!

If you work hard and get a lot of return customers, which normally is a growing asset (goodwill), it will be worth nothing with a short lease contract.

And i assume nobody wants to work hard and build a business and have the risk of losing it all because the landlord raises the keymoney to unpayable heights together with a large increase in the monthly rent.

When you don't have a long contract, wait until the landlord has some personal problems, like a gambling debt or some new business that needs money quick.

Don't let the landlords personal problems be your problems. Cover it in a contract and a long lease.

If the landlord wants to cover the risk of the tenant running away, a larger deposit is a much better way.

I'll give an example. Rent 10.000, 300.000 keymoney for a 3 year contract, 1 months rent in advance and 2 months deposit.

You will have to pay 300.000 + 10.000 + 20.000 = 330.000 at the start of the contract.

Instead offer 20.000 baht a month rent, no keymoney, 6 months rent in advance and 2 months deposit. Total at the start 180.000 baht. And try to go for a contract of at least 10 years. Then your hard work maybe pay off and you have some real assets to sell if you want to.

This way you have 150.000 available for starting the business and half year time to pay the next 6 months rent. A much easier start and everything in the books for tax purposes. If the landlord is not interested, why should you be in the keymoney and 3 year contract case. Offering this is a good solution in the middle.

I just suggest this because the OP wants to start a restaurant in a tourist spot, hardly comparable with a big mall or predominantly thai/thai business.

[Patanawet]

3 minutes ago, floridarob said:

Not sure why I didn't just Google it too 🤷‍♂️

Here is a post that's informative, along with all the other ones I saw.... so one of the unknowns is, how much longer left on the rental/lease contract....🤔

 

This is only relevant for tourist areas and a lot less for other areas.

Try asking for a receipt for the keymoney in a tourist area.

The landlord will laugh in your face.

 

 As I stated, Key money in soi 4 is paid annually and the amount depends on how many shop house widths you rent.
ALSO leases (and key money are ANNUAL and renewable at New Year.