Bonus & Wendy's Monday Evening Private Investment Thread . . . .

[Bonus]

I like the way you call it "the" Lebanon. My guess is that you're a Human League fan?

 

The song did come to mind when I was typing that post out :-)

[Bonus]

I don't want to be a Debbie Downer, but there is always a risk of over-capitalisation, where the money invested is not perceived by the market to be of good value, and as such will not be recognised by potential buyers. 

 

For example, friends were looking into extending their house, new bedroom and en-suite, the building costs (expensive Australian labour) were priced far in excess (i.e. multiples) of the improvement in market value. As they do not see it as their "forever" house, they shelved the idea, obviously if you plan to live in it (or use it as a business) for 20 years a different set of drivers and economics comes into play.

 

I'm not saying it will be the case in your endeavour, but I suppose I just wanted to put in my Z$2 worth that developing property is not always a guaranteed thing. Moral of the story, those solid gold toilet bowl sets you were thinking of getting probably isn't a good idea for resale value.

 

PS.I still wish all the best for your plans though !

 

It's a good point patham and I know exactly what you mean. In the UK when the "housing bubble" started to expand back in the mid 80's this exact problem occured.

 

People who had aquired houses failry cheaply (ex council houses were a prime example) and were now wanting to sell them to cream-off a massive profit (the value of houses and flats were going up by a thousand pounds a month at the time!) would borrow  £10k or £15k secured against the existing equity of the house to put in double glazed windows or add a conservatory to the back of the house etc. They would assume that they could add that amount (if not more) to the value of the house they were about to sell.

 

In some cases, depending on the Supply Vs Dmand of the area, it worked. But in many cases it didn't. Estate agents would generally say that a house with double glazing would sell more quickly than the same sort of house without double glazing, but not usually by a higher enough price to cover the cost of the "improvment". Same for conservatories.

 

Another thing about double glazing that people didn't realise was that when the salesman says "you'll save so much money on your energy bills it will pay for itself" that wasn't a quick thing. "It will have paid for itself after ten years" became pretty much the accepted rule of thumb.

 

In our case, we're starting with an empty agricultural building and turning it into a habitable property with the added ability of it being able to make money as a business. We have a reasonably priced builder and we're doing as much work ourselves as possible to help keep costs down. As long as we avoid, as you say, gold plated toilet seats and mahogany stair cases, we'll be ok.

 

Thanks for the feedback. I have no problem with having to double check my own thinking or my own numbers. Helps keep us pointed in the right direction! 

[Bonus]

We've had some encouraging news regarding how we can reduce the amount of money we need to find to carry out the first stage of our build.

 

I've posted the full story over on the  "Bonus & Wendys Big Adventure" thread . . . .

[Bonus]

The friends I mentioned in our "Big Adventure" thread are back from their Cuban holiday now, so hopefully we'll all get together soon and have a look at our Build Plan to see how much of the work we can do ourselves if they help us.

 

I'm fairly hands-on myself, but with my friend Ben's help we can add lots more jobs to the list of things we can do ourselves because he's a builder!

 

Will be great if we can cut the labour bill right down to the bone and if we concentrate initialy on getting a small part of the project finished and ready for business, then that will give us some income and financial security too.

[Bonus]

In amongst all the truly awful Corona Virus stuff going on in the world right now, we've actually had some positive news regarding our Build Project.

 

We met up with our friends Ben & Corina on Saturday afternoon (before the restrictions of movement were announced I should add!) and we had a good chat about the various jobs that need doing in order to convert our property from what it is currently into something we can use to live in and make a living from.

 

There are a couple of jobs that we will really need a builder for - stuff that requires the use of a crane and/or involves big concrete support beams or large quantaties of stone (the barn is built from stone) but there are also tons of jobs that I would be able to do on my own if Ben were able to help me. 

 

In a nutshell, pretty much every "difficult" job I mentioned, Ben was confident we could manage between us, either with him helping me, or with him showing me what to do and then leaving me to get on with it once I knew what I was doing.

 

Now I have to go through our Builders quote and weed out everything we can do ourselves to see what amount we're left with that we still need to raise for materials and builders costs.

 

I have plenty of energy, a fair bit of free time and I'm a quick learner. Let's see what we can do here....

 

:-) 

[Bonus]

If "Lockdown" has given us anything, it's been the opportunity to spend some time indoors browsing the web without feeling guilty about missing out on a ride or some outdoor work, either at actual work or on our own Project.

 

One of the things on my list was to brush up on "Declarations of Trust".

 

A Declaration of Trust is a very flexible but legally binding document typically used either when "a property is being purchased by more than one person(s) or when one person(s) makes a financial investment into another persons property".

 

We're obviously interested in the latter, "a person(s) making an investment in to an already purchased property as a means of carrying out renovations".

 

The terms and conditions listed in a D of T are determined by all the parties involved. 

 

 

 

"These days it's more common for people to receive financial help from family members, friends or investors when buying a property. In most cases the people providing financial assistance will want their money back at some point in the future.

 

A Declaration of Trust (or Deed of Trust) can specify how much money should be repaid, and in what circumstances this money should be repaid. This will protect that person's investment, helping to ensure it isn't lost."

[Bonus]

You might think that with everything that's going on in the world right now, the task of trying to find the  finance we need for our build project would be pretty daunting. Devalution of the stock markets, pensions & investments, the extended lockdowns, the predicted global recession . . . . it can all seem a bit overwhelming. 

 

It certainly hasn't made what was already going to be "a fairly difficult job" any easier, no doubt about that, but despite everything, I'm still confident that we will be successful in the long run - because we live in an area where people refuse to lay down and give up.

 

Back in 2007 the world went into a financial meltdown. The subprime mortgage market in the States, the excessive risk-taking of investment banks world-wide and culminating with huge bailouts of global financial institutions in an attempt to try and prevent the collapse of the world financial system . . . times were grim. Spain did particularly badly between 2008 and 2012 and it's banks were eventually granted a "Euro Bailout" on the condition that they mend their ways by way of strict and tighter regulations.

 

As a result of the 2008-12 "Spanish Crisis" and for a long time afterwards, pretty much every area of Spain suffered badly. Up here in the Pyrenees mountains whole villages became unpopulated as Spanish people migrated towards the bigger towns and cities looking for work and the foreign workers returned either to their own countries or to other European countries with better prospects. Within a few km's of where we live there are still several abandonded or semi abandonded villages and farm houses. I pass through them all the time when I'm out riding.

 

The small town of Ainsa (our local town), with its population of around 2000 poeple, sits 45km south of the French border in the foothills of the Spanish Pyrenees and had always relied almost exclusively on seasonal Tourism for it's income. Back in 2007/8 some local business & hotel owners, along with the local council and including my friend Angel from the bike shop, got together to discuss the situation. The writing was on the wall, the youngsters were leaving the area in search of work elsewhere and a recession of epic proportions was fast approaching.

 

The attendees at the meeting included a small group of friends who had all grown up together in Ainsa and who loved to ride their mountain bikes on the network of footpaths and fire roads that criss-crossed the countryside.  Between them they came up with an idea that might save Ainsa from the ecconomic ruin that was fast approaching. This is how "Zona Zero" was born.

 

Ten years later and Ainsa was sitting in the middle of 1000km of amazing mountain bike trails. People were visiting from all over the world. The Enduro World Series had hosted Stages of their World Championship Competion here, twice - 2015 and 2018. Hotels had grown, restaurants and bars were flourishing. People made serious money.Ainsa was well and truly on the map.

 

https://zonazeropirineos.com/en/

 

 

Now in 2020 times are looking tough again, not just locally, but globally. The next few years are going to be challenging, to say the least.

 

What the local community have on their side though is an amazing network of world class trails - with new trails being added all the time. Beautiful countryside, stunning mountains, intriguing abandonded villages, churches, castles and ruins, flowing rivers - perfect for swimming in during the summer, and an abundance of very good and very reasonable eating and drinking establishments.

 

On top of that, what we have personally is a beautiful solid property in a tranquil village that benefits from it's own micro-climate. We have views of the mountains, fresh air, peace & quiet and friendly local people.

 

As Ainsa and the "Zona Zero" organisation has seen over the last 12 years, despite everything, people do have money to spend and people do want to ride here. If you offer good service at a reasonable price you will not go wrong. We intend to offer great service at a reasonable price - therefore we can not go wrong!

 

Onwards and upwards!

[Bonus]

We're used to getting nonsense emails - I've had two over the last week offering me "between $1 000 000 and $50 000 000 at 2% interest, regardless of my status".

 

But I was surprised to hear from Harrods Luxury Department Store in London this morning telling me that "they want to buy my bikes" . . . . .

 

These guys just never stop trying!

[DJR]

..............But I was surprised to hear from Harrods Luxury Department Store in London this morning telling me that "they want to buy my bikes" . . . . ............!

  The best one yet!

[Bonus]

We have several people in SA helping us look for a potential private investor(s) and we're getting some positive feedback.

 

In the short term these may be difficult times, worldwide, but the fact remains that in the long term life will go on. People still work and people want holidays, and what we're going to offer will be in demand.

 

Ainsa and Boltaña are busy - both the general visitors and the cyclists, have arrived as usual. The campsite I'm working at has visitors from all over Spain and all the local European countries. People are respecting "social distancing" where necessary but I'm seeing that the people are as positive and friendly as ever - they are not letting what has happened ruin their lives. A welcome change from the heavy times we had between March and May!! 

 

Let's hope we can all move onwards and upwards. . . . 

[Bonus]

We have friends here, a couple from the UK, who run a guest house about 20km south of Ainsa.

 

They have bookings every day throughout July, August & September and a lot of that time all 5 of their rooms are going to be full.

 

It's good to see them doing well despite the current problems we are all facing. Their business model differs from ours in two significant ways - firstly they are far enough out of town that they have to supply evening meals for gusets - whereas we're only going to do that under special circumstances and secondly, despite living on the edge of the Zona Zero cycling trails network, they have no interest in catering for cyclists....

 

We need something like 19% occupancy for our business plan to be sucessfull. Every day during summer that you can run at 100% allows for those times out of season when the numbers will drop.

 

We're actually going to run packages during the "off season" specifically to encourage people to come here and ride. We have lots of ideas. We might have to put in that bit more effort but it will be worth it to be busy.  

[Bonus]

A week or two ago we were talking to a South African investor who was seriously considering investing enough money into our Project for us to have been able to complete just over half the build. By being careful in what work we chose to carry out and by doing as much of the manual labour as possible ourselves (and with my friend Ben's help), we calculated that we could have completed 2 (hopefully 3!) guest bedrooms with bathrooms, Lounge/Kitchen/Diner, Patios & Gardens plus a very basic room for ourselves.

 

The "room for ourselves" would have mean that we could move out of our rented apartment - an instant cash saving - and the 2 or 3 guest rooms would have allowed the Project to start earning it's keep. As I've mentioned in our "Big Adventuure" thread, I'm currently managing to find employment for around 9 months of the year with the Campsite etc and I plan to keep doing that, even when we're up and running ourselves, so that the Project can concentrate on paying back it's investors and doesn't have to support us.

 

The money would have been available within a month or two, which would have been the perfect time of the year for us - just as the "Season" starts to wind down and we'd be free to give the Project our full attention. . . . . everything was looking good, the numbers made sense and, amazingly, the builder we are going to use to do the "big stuff" had his van parked outside our flat on the day that the investor was due to give us his final decision......

 

It didn't come off in the end, but I'm happy to say that it was not because of anything to do with us or the potential risk associated with the Project etc and on the plus side - we've had the opportunity to double-check our numbers and the chance of it happening cheered us up nicely for a while during what has been a pretty grim year for everyone! 

 

We'll take it all as a good sign and keep looking.......

 

:-)

[Bonus]

In the last fortnight I've spent 50% of my waking time working, 30% of the time riding and 20% of the time either being at, or watching on TV, La Vuelta 2020!

 

On Sunday I bumped into people on the road at La Vuelta who would be interested in staying with us and road riding the same roads that La Vuelta followed. Having coffee on the terrace at Hotel Sanchez on Wednesday morning I was approached by a lady from Holland who organises adventure holidays to this area and wants me too be her contact point for organising Kayaking, Canyoning and of course Mountain Bike Riding. Apparently Holland "has no mountains" so they would be interested in cross-country riding - which makes things easier for me. And then yesterday a local lady, who I worked with back in the summer, called me about English lessons for her son and reminded me that when we are up and running I said we would be running "Speak English Only" holiday clubs for local youngsters whose parents are at work......

 

On top of that, Ainsa Council, which covers (amongst other things) the town of Ainsa, the Zona Zero MTB Trails and the village of Guaso, where our Project is, curently has a dozen improvement projects on the go.

 

The future looks promising..........

Edited October 31, 2020 by Bonus

[Bonus]

At the end of this week "Inter-Provincial Travel" opens up again here in Spain.

 

For a while now IP Travel has been restricted - meaning that although local businesses that wanted to could be (and generally have been) open, their customers have all only come from within their own province. In our case "Aragon".

 

I've been talking to local owners and for a lot of them the off-season has been no different to any other year. Those that normally close, closed as normal. Businesses that are usually open and quite busy over our Winter season have seen less customers due to the restrictions but it has been partly balanced out by people from our own province who would normally go to another province for a week or long weekend winter break and couldn't. They came here instead :-)

 

There's no doubt that numbers are down, but given the circumstances, it's not been as bad for most of the people I interact with as it could have been.

 

The campsite that I sometimes work at decided not to open until IP Travel was allowed - they felt that the numbers of people likely to visit at this time didn't balance with the cost of opening and running the whole site. All the usual prep work we do has still needed doing and for me personally this year has been the same as previous years thankfully. The only difference being that where 2 or 3 of us normally get everything done by Easter for opening, I've been working pretty much on my own over the longer period of time that we've had to get everything done.

 

Let's see how the next few weeks go! 

[Bonus]

Took a guy from Holland out for a few hours of MTB guiding the other evening. He was here camping with his family, although not at the campsite I'm working at this summer.  

After riding and chatting for a bit, he wanted to see our "project".

He knows a man who knows a man . . .  you never know!  

[DIPSLICK]

howzit, 

I missed this thread completely I was wondering the other day how "much funds MUST you have " to still be grinding on,

I`m glad to see you guys are still grinding on. Have u mentioned a number yet out of curiosity, My dad built up a small resort over ten years, he ploughed horrible money into his passion I can tell you it kept him busy and he loved the place until the day he died

obviously now that we busy with his estate,,,,,,,,,all I can say is MAN ,, PASSION makes otherwise sound businessmen make horrible 

"investment" decisions 

But as I said he was happy, with that money I am sure I would have been happppierrrr

good luck