In the real, non-virtual world the old truth is telling us that if one plays with fire he/she will get burned. My own variation of that saying applicable to the bloggosphere would need to go something like “if you start a blog and network with other bloggers, you will get tagged!�? And so it happened to me. Finally I must say.

After few months of running my beloved Sound Of Gold, one of the good people of Breathing Prosperity, Shauna, has pinged me with the tag to participate in OptimistLab’s game called How I raise my vibes (read the rules there). As you can see, a topic, perhaps rather soul searching for some.

The top spots on my list of “vibe-raisers�? would need to be occupied by (in no particular order):

Family and friends
The people I love and hang around most are the ones, who have the powers to raise my vibes in no time. Most probably because they know me so well its scary and always know which button to push in order for me to regroup.

Sports and exercise
A real good hard workout or long run in a park works for me every time. I am not sure if that’s the deep mental focus required by most of the physical sport activities, the physical pain and exhaustion or just the related endorphin chemistry of the brain, but it works for me without a fail. Exhausted, but happy with a clear head, I am able to refocus on what is really important and suppress the creeping negativity. On top of that, keeping in a good physical shape somehow also transpires into feeling good about myself and the things I do. If you feel good about yourself hardly anything can bring you down.

Fine dining
Call me simple but a very basic act of enjoying a quality meal in pleasant environment surrounded by interesting people can fill me up with a great portion of happiness and satisfaction about this world. Needless to say it often provides that much required soothing effect during the tougher periods in life. Word of caution though: this “vibe-raiser�? should only be exercised in close coordination with the one just above

Appreciation for my work
I think I am not the only one who likes to be praised for his doings. Seeing that other people feel, understand and appreciate things I do is one of the greatest sources of motivation I found to date. In my mind, such appreciation tackles head on one of my biggest life “fears�?: uselessly wasting the time given to me and growing old without even leaving some positive mark behind.

Music
No need to reinvent the wheel, let’s just say, that somehow the right tune at the right time holds enough strength to get me up on my “positive feet�? no matter how strong a blow had I received. I am fairly certain, that most of you have similar experiences.

And that is my little list. Now looking around at other game entries, I see that most of the participants approached the topic from perhaps much more motivational angle than I have. So enjoy the variety.

Now the funny part, tagging:
Ed Lau’s the.[ED]ition
Mike’s Retire Young and Wealthy
Saman Sadeghi’s Samanathon
Lorimer Tondo’s The New (Online) Confessions
Kendall Schoenrock’s The Blog of Kendall

From other news:
In the competitive banking market all almost banks have started online customer service in order to provide correct banking information and timely solutions to the customers. Among the leading ones bank of america has taken prime position because of its quality services and diversified financial banking programs. While on the other hand bank of scotland is getting popularity because of its customer oriented banking.

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It has made the headlines in Australia several times – the Mexican construction giant company Cemex has been trying to buyout the Australian building firm Rinker. The deal, which has been dragging on since 26 October 2006, and eventually recommended to Rinkers shareholders by its management, was declared unconditional on 7 June 2007. In other words, the takeover will now go ahead to its completion and Cemex is to hold controlling majority interest in Rinker unless the Australian competition watchdog ACCC decides otherwise.

Now why am I going into all this? From where I stand, the arbitrage opportunity arising from this takeover may have presented the small investors with some easy pickings guaranteed.

Little background
The first Cemex’s Bidders Statement (ie. offer to buyout / takeover a company) was issued in October 2006 and stated the price offered for each Rinker share at US$13 (about A$15.40 at the time RIN shares traded on ASX for approximately A$14.70).

This was almost immediately knocked down as a low purchase price and Rinker’s management unanimously advised its shareholders in its Target Statement (ie. reply to the Bidders Statement by the target company) to reject this offer.

Little push and shove, few months later (10 April 2007 to be more exact) Cemex comes back with new offer of US$15.85 (about A$18.70 at the time Rinker shares traded on ASX pretty much on par with this offer as investors are anticipating the increased bid). Now the things get more interesting.

On 27 April 2007 after careful consideration, the Rinker’s management issue First Supplementary Target’s Statement advising its shareholders that the increased offer presents some premium to the actual value of Rinker so shareholders should accept the offer.

Opportunity for intelligent investor
So once we know that the offer has the backing of Rinker’s management it is highly likely it will be finished successfully hence an opportunity for an investor arises (previous high level of uncertainties essentially attracted more speculative behaviour).

As the offer is made in $US, the tricky bit to consider is the fluctuation of that currency in relation to Aussie dollar. Since the fortunetelling is not a discipline on which any self respecting investor bases his decisions upon, this arbitrage opportunity could have been disregard right here.

However a new clause in Fifth Supplementary Bidder’s Statement made by Cemex states, that it will purchase �?your first 2,000 Rinker shares (or all of them if you hold less than 2,000 shares) for a fixed price of A$19.50)�?. So for anyone with small holding, the exchange rate fluctuation risk had been eliminated!

Now obviously the major institutional players are not overly concerned about this, but a small investor could possibly make some fairly decent returns from this considering, that the shares were still available on ASX for about A$18.65 at the time. Quick calculation reveals that purchase of 2,000 RIN would cost about A$37,300 to be sold directly to Cemex at later date for A$39,000 for a gross return of about 4.6% during the period of, give or take, about 2 months. This would equal to return of about 27%pa. Not bad at all.

In other good news, on 14 May 2007 Rinker advised its shareholders, that Cemex graciously decided that anyone accepting the offer can retain the proposed A$0.25 dividend making our potential return from this exercise exactly A$500 higher (A$0.25 x 2,000 shares held)! But remember that as the ex-date for this dividend payout was 4 June 2007 our investor would have needed to hold the Rinker shares on or before that date.

Obviously the profit boosting dividend ship has well and truly sailed by now however as of Friday 15 June 2007, Rinker is still available for purchase on ASX for about A$18.90 (ie. potential for A$0.60 profit per share if one purchases 2,000 shares or less).

The catch
As the negotiation around this takeover strech over an extensive period of time, large amount of rules and conditions were proposed and later changed or withdrawn. Cemex itself made altogether Eight (!!) Supplementary Bidders Statements lot of which contain, at least in my eyes, confusing law talk and fine print bonanza.

As I did spent my time reading through majority of them, it still appears to me, that the A$19.50 fixed payout is available to ANYONE who accepts the offer before its expiry day (as of latest update this date is set to 22 June 2007). However I also read various other opinions suggesting the A$19.50 was apparently conditioned by holding the RIN share at some preset date, which has now passed.

To me, the most helpful facts are coming from Rinker’s Target’s Statements. The latest one (First Supplementary Target’s Statement) dated 27 April 2007 in its FAQ section states:

Do I need to have held Rinker Shares on a particular date to be eligible to have the option of receiving a fixed australian dollar price of A$19.50 per Rinker Share, for my first 2,000 Rinker Shares?

No. Initially CEMEX announced (on 10 April) that only those shareholders that held Rinker Shares on 12 April would be entitled to receive the fixed Australian dollar price for their first 2,000 shares. However, this requirement was not included in the Fifth Supplementary Bidder’s Statement which contains the terms on which Rinker Shareholders can elect to receive a fixed Australian dollar price of A$19.50 per Rinker Share, for their first 2,000 Rinker Shares (or for all of their Rinker Shares if their holding is less than 2,000).

Conclusion
As the unclarity and uncertainty settled in I decided to only watch this potentially profitable opportunity from the sidelines. In my investments I like to be as certain as possible about the conditions I get myself into. And even more so when it comes to such an essential, make or break component as is the sale price. I think Warren Buffett normally puts it something on the lines of “if not sure, do nothing�?, which is one of my personal investing rules I choose to exercise now.

Word of caution: The above stated facts and information are my personal opinions and conclusions. Don’t base your own vital investment decisions on mine, maybe faulty, theories. Rather get your own thorough research to provide a solid base for your own investing moves.

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In the midst of the US property boom I thought it an interesting idea to look around and show here what kind of property investing options are available in the country, where I currently temporarily reside – Thailand. As I may have already mentioned here on my blog Sound Of Gold, with some breaks I have been only living here in Thailand for about 7 months now and my keen eye for investment opportunities (or so I like to think) looked around number of times at what, where, how and for much is available here.

Investing in Thailand, no kidding
I imagine that only a small number of private investors would be willing to take the plunge and put the money into an uncertain property market of a developing south east Asian country. On the other hand though, look where is the fastest economic growth coming from these day? China and India. And is the developing and some would perhaps say uncertain nature of these giants discouraging the biggest western investment houses to put their money there? It does not look like it. Yes you may argue that China and India is not Thailand but nevertheless.

Foreign ownership problems
The first thing I need to stress here is that for a foreigner, buying any type of property in Thailand is by no means an easy exercise. There is number of rules and regulations designed for the country not being completely “sold out” to cashed up foreigners, one of the main ones perhaps the maximum 49% foreign ownership limit on any thai asset.

Of course Thailand, same as lot of other Asian countries, can be very flexible with their regulations, so let’s just say that “where is the will there is a way” applies here perhaps more than anywhere else. And so I am fairly sure that foreigners can (and do) control a large portion of various businesses, properties, stocks and any other asset class here.

I don’t mean to discuss the obstacles but rather would like to go on with one of our first attempts on purchasing an investment property here. A fact I also need to point out here is that my wife is of Thai origin hence I can shamelessly state here that yes, we certainly enjoy some unfair advantage if compared to an average foreign investor.

Real life example
After a few months of research, we have decided that we will look into few properties located within the perimeter of a provincial capital we currently live. This is mainly due to two reasons:

• lower purchasing prices
  As anywhere else major cities here attract some huge premiums over the country. Real estate market in Bangkok is alive and well and purchase prices there are, give or take, almost on par with any other averagely priced western capital. For me, value inclined investor, a major no no.
• virtual non-existence of real estate management business
  Again with the exemption of Bangkok (and perhaps Chiang Mai and some other more westernized bigger cities here) there is virtually no real estate offices one could call, talk to or walk into in order to see whats available. For us not having a reliable property manager look over our investment simply narrowed the choices to the close by locations where we can do the management ourselves.

Once we had that clear, next came the task of finding the right property. Again a little tricky here with absence of local real estate office we could talk and with local newspaper not even featuring the real estate section (talk about developing country huh?). With little bit of research we discovered that most properties here are advertised only directly by their owners and the only way one could actually find out the deals is by walking around and looking for the FOR SALE signs.

Another and much more convenient source of available properties turned out to be the websites of major thai banks. If you can find the correct section, their sites often feature rather large number of foreclosed properties available for sale to interested parties. Needless to say that such properties could also attract a healthy discount (not always true) in order for bank to recoup its loans.

The art of the deal, Donald watch me!
And that is how we struck our gold . Browsing the local bank’s website I noticed a small single level townhouse in a little suburb neighbouring the local university. It has two bedrooms, decent size living room and a small outside backyard.

As the asking price was 220,000.- baht (ca US$ 6,800) and the similar properties in the immediate neighbourhood fetch between 2,000 and 2,500 baht per month, the annual return right of the bat would have been between 11% and 13.5%. But that’s excluding some desperately needed repairs and maintenance works as the house was unoccupied for quite a while and surely needs some loving touches.

At this point I thought to myself, that it surely looks like a decent deal and should be rentable to the crowd of out of the city university students, who already occupy number of similar properties in that area. Also with no experience with thai property, I was quite happy with seemingly low price as if everything goes wrong we won’t lose our shirt, sort of speak.

After further discussion with the head of local bank’s foreclosure department, it was suggested to us by him to put in an offer around 150,000.-!! Get that? The guy selling the property is basically advising us how low are they willing to go. My investing mind started to ring the bells.

And so we again went through all the facts but could not really see any major obstacle preventing us from putting in the offer. The numbers add up, the rental market is there, the property will be ours forever once purchased (no leasehold or some funny type of ownership scheme) so we bit the bullet and obliged with an offer of 150,000 baht (ca US$4,700.-).

On the end, the bank came back advising that we can have it for 160,000.-. Since we had the cash to pay it without the need of finance, bank seemed to look at us more favorably and prioritized our lowish offer against few higher but leveraged ones. In the following few weeks we registered the land and house title to my wife’s name (well that’s how it’s gotta be done here as shared or only my name on the title would mean many many more bureaucratic obstacles to clear) and we are now the proud owners of our first thai diamond in the rough. Others say a dump .

And the numbers?

• Purchase and transfer costs ca 165,000 baht (ca US$ 5,000.-)
• Needed repairs (a very rough, worst case scenario to round it up nicely) 35,000 baht (ca US$ 1,000.-)
• Potential yearly rental (better safe than sorry lowish number at 2,000 / month) 24,000 baht ( ca US$ 750.-)
• Other yearly ownership costs (repairs, taxes, fees – all fairly low in Thailand) 4,000 baht (ca US$130.-)
• Theoretical yearly ROI of not too shabby 11.8% not even accounting for the capital growth.

In the next phase, we need to get all the utilities sorted, get the property into a “tenant friendly state” and than rent it out. But since we are now expecting family and hence understandably have some other more urgent issues to tackle, the first step into building of my Thailand real estate emporium is being put on hold for about a month or so.

So what do you think? Gutsy or stupid?

Related thoughts:
If you are thinking to purchase house, then you need to seek all the relevant information about mortgage rate. In case of 1st mortgage, you should consult with some fame consultant. There are many banks and online companies that are providing information and mortgage calculators, in order to calculate the installments and interest rate. Now days it is very easy to find mortgage leads for proper guidance. While on the other hand, people who fail to payback because of lacking planning usually become part foreclosure listings. In this competitive mortgage market a lot of options are there for best remortgages.

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