4.7 hectare Beachfront Property, Dream Concept
In the above pic you see a river snaking into the ocean just left of center. The beach to the right of the river is the property. The property is 4.7 hectares and runs from the river to about 1/4 of the Beach to the right. You can see a road running from 10 o'clock to 4 o'clock in the lower left corner. The property goes from the beach to about a third of the way back to the road. The road will be where the access road to the property that will be built, connects to.
Right now there is no road access to the property nor is there services (water, electricity) on site. The seller has agreed to put a road into the property from the present road at the back of the property, described above, along the river into the property.
The property has a large hill in the East third of the property which has a cliff face facing the beach side and a steep slope towards the back. There is also another hill to the right (West) of the property which has a smaller cliff face facing the beach. The area in the Eastern corner bordered by the river, the beach and the cliff face is suitable for development as it has more than the 50 m of land available from the high tide mark. The larger hill can be developed with road access and cleared on top for villa construction.
The asking price for this property whole is Rp 13,000,000 / are which equates to us$ 975 / are
(note: there are 100 are in a hectare).
For a total of: 470 * 975 = us$ 458,250.
The owner is willing to divide the property in half asking Rp 17,000,000 / are which equates to us$ 1,275 /are totaling 235 * 1,275 = for us$ 299,625.
The left pics above are the beachfront corner of the property from the river mouth. The pic on the right is basically turning around from the left pic and looking down the beach front of the property. There's about 370m of beach front.
From the Center of beach looking inland Left, Center, Right.
More about the Sekongkang area:
The property is in West Sumbawa. About 1.5 hr ferry boat from Lombok. The main airport in West Sumbawa is about 2.5 hrs away. The best way to get to this area of Sumbawa is by the "fast" boat operated by the mine and available to the public which leaves Benete in Lombock and docks at Kayangan in West Sumbawa about 15 min drive to Sekongkang.
The local village is called "Sekongkang". Lots of great surfing, fishing and beaches in the area all easily accessible by scooter. The local government has made a commitment to invest in this area to increase tourism. A new hospital being built in the near by village and the nearby airport is suppose to start operating again in 2017. About 6 miles away there's a big copper/gold mine that has been in operation for over 20 years. This means the locals are comfortable with foreigners in the area. It also means the area is protected by the government.
The Investment Concept;
This is a perfect "Dream Property" concept of an investment. I shall describe this Dream. To invest in a promising property, to have a little plot of my own, to be able to stay at and enjoy a unique and comfortable beachfront establishment of my own, to know the investment property is safe and secure, to own more sandals than shoes.
This 4.7 ht property is in a great location on Sekongkang beach. With the river boarder on one side the property is isolated but prominent on the Beach. The area is designated by the local gov’t for tourist infrastructure investment. A promising property.
I propose that this property be divided in half as a start. One half to keep/manage/develop and half for possible future sale as a means to recoup some of the initial investment. It could be decided to keep it all offering the investors the ability to get a little more than a little plot of their own. I shall continue with the idea of halving the property.
On the keep/manage/develop half, which would be the half that boarders the river, there will be a common area development along the cliff face towards the beach. This area will include a common villa of 4+ bedrooms, a beach bar restaurant minimal type operation, a hostel/utility type building to accommodate 10-20 surfers, and 2-4 huts/bungalows. This generally outlines “a unique and comfortable Beachfront establishment of my own” and will say, we own, henceforth referred to as “the common area”.
The road access which enters from the rear of the property, can branch off at the river and carry on up the backside of the hill to the top of the hill. I haven't been up there to measure but do plan to do so, soon. I believe several personal lots can be identified up there. Also further along the property at beach level, a few personal lots can be identified. This generally outlines the “having a little lot of my own”
One of the primary concerns of investing in property in a foreign country and accessing it only occasionally, would be the safety of the property itself. With a common area operation in place, there are local people working at the property, we have security staff, the property is known to the local population, has good ties and is a part of the community. I say this up front, the common area operation will not make a lot of money, it doesn't need to. It needs to pay for itself. The return from the common operation to me, is the safety and security of the property, as well as having someplace to hang out, eat drink and relax when we’re there.
In 3-5 years if we decided to half the property, that portion could be sold and the partners recoup some of their investment. If its decided to keep the entire property then great but that entails a slightly different outline utilizing all the property, than is described here.
So, here ends the description of the Dream.
On to Realities.
Access roads into the property electricity and water. This item’s funding is part of the buy total of the property. It’s a BTPI.Co recommended step as a Land Banking and/or Dream Property concept.
During the first year or two, we would extend the access roads into the property from along the river where the owner will run a road, into the eastern portion of the property, drill at least one or two water wells and run electricity into the property from the back road along the river road access.
As an investment, the property would now have access, water and electricity on-site greatly increasing it's value.
I’ve witnessed the amazing ability of the tractor to make roads into the area. Once a detail plan and survey are complete, the tractor is rented on a daily basis, and the roads will be made. Part of the purchase negotiations is the seller installing road access from behind the property up along the river. I’m keeping that in mind. There is a road into a property recently made that is “close” to the Western side of the 4.7 property. There is a property between us and the road but access may be attained from that direction also.
Below you will see two optional road plans. One from along the river and the other utilizing both neighbour and river access points.
And so in 1-3 years we have good road access throughout the property, electricity will have been brought to the property from the road, wells have been drilled, water has been run to the property. At this point we are at the end of the “Land Banking” concept. You can review the end financial result should this property now be sold whole within a year or two.
All development from here on is following the "Dream project" concept, and is concentrated on the common area. Partners may do what they will, within reason, with their personal “lots” at their own time. There will be some form of construction guidelines for the group to adhere to when developing anything on their “lot”. Otherwise, thats a personal matter for the partner to decide. Personally, i’m thinking a yurt for a couple years on my lot.
Here is the proposed property outline from above and behind.
The two lots left (West) are approximately 1 hectare each, set aside for future sale. the blue ovals are the proposed personal lots areas. The green oval is the common area. Within the blue oval areas we will designate personal “Lots” for the investors of 10 are.
The Common Area;
As I've stated, I believe the common area ensures the safety and security of the property. Your personal development whatever it is on your “Lot” is safer and more secure because of the common area, not the other way around.
It should begin as soon as practical and within a year. It will consist of a 3-5 bedroom villa, a lounge beach bar restaurant area and structure, a platformed building with a hostel upstairs and utility rooms below, 2-4 ground level hut/bungalows along the way a bit, and a maintained beachfront area. In a nutshell I estimate this at 2-300,000 us$ and about 1 1/2 to 2 years completion time. From start to finish an investor will be able to bring their families and stay in a 3-5 bedroom villa or a hut/bungalow in 2 years. In addition, I’m in on this deal. In 2-3 years we may commute from this property to maybe china. I’ll be on site a lot. I have interest in and passion for the area. I’m gonna have a really nice yurt.
So us$ 300,000. That’s what you’ll see below in the financial breakdown but there it is. Say 10 investor partners and thats a 10% in for us$ 30,000 in addition to property purchase price.
Following are examples of villas, beach bar restaurant areas, huts and bungalows. Whatever we build above ground, theres a lot of work below ground. Infrastructure throughout the property must be in place. Road or trail access, water, electric, septic, drainage, all this must be in place no matter what we build above ground. Choice of design and material will vary slightly. The term may be silly but “ECO” is what I mean. I’d like to try to be a “self sufficient” type of operation throughout the property. I/we are open to alternative means to an end. Suggestions are welcomed. Remember, you see what needs to be built, and you see the budget i have set. Accomplish this and remain within that and we’re good. I have a plan, let’s make it better.
The Estimated Investment Project Breakdown and Estimated Return;
Concept 2 - Dream Property
This summary breakdown is from the Land Banking portfolio for this property. I have removed the BTPI.Co 1% fee from the total buy price because I am an active part of this project. Fear not, there is lots to do to get this done and BTPI.Co will accomplish these items at a fair rate as listed.
Asking Price: us$ 458,250
Service the property in the form of extending the road access, drilling wells and/or running city water and electricity into the property is estimated at us$ 40,000.
This project has a 5 year timeframe. All costs and fees estimated slightly high.
|Property Purchase Price||US$||458,250|
|Purchase Tax (5%)||22,912|
|Annual Property Taxes (5 years)||2,500|
|Annual Admin Fee (us$ 1,400/yr)||7,000|
|Total Investment Package||US$||538,162|
|Dream Property Project||300,000|
|Total Investment Package||US$||838,163|
If there are 10 partners then a 10% share is us$ 83,816.
Following my partitioning of the property idea/proposal, in 3-5 years we could sell the two 1 hectare lots. This would result as follows;
|Property Sell Price ( 2 ht @ 3 * original value)||US$||195,000|
|Selling Tax (5%)||9,750|
|Gross Investment Return||US$||179,750|
This equates to a 10% partner getting us$ 17,975 back from their us$ 83,816 investment after 5 years.
My Final Thought;
Well I’m in at a 10% share for sure. Now that I’ve done these numbers I think I’d rather keep the whole property because getting 18 grand back in 5 years is nice, but is it worth not having the whole 4.7 hectares. We could increase the size and place of our personal “lots”. The common area is “as is” whole property or half.
The common area construction and operation is a vital part of this project. To be clear, any investor/partner would be hard pressed to build something on their “Lot” within 2 years. Partners will have access to staying in the common villa or hut/bungalow at their pleasure. It provides the partners with a place to come and hang out, to view their “Lot” from every angle and time of day, make plans and while they build or, just let it sit and visit and stay in the villa. It makes the property alive, functioning, safe.
Above are the available properties in Sekongkang identified by BTPI.Co
updated May / 17
Update 01; July / 17
Outlining the findings of recent personal land inspection.
During our last visit to Sekongkang, Sumbawa, Indra and I hiked up to the top of the hill on the property. We approached it from the back where 2 hectares of land is being cleared by another land owner in preparation for sale. The cleared land and rough road borders the backside of this 4.7 "Dream Property". From the backside, we followed a cow trail through the jungle upwards till we reached the top. Jungle bushwhacking.
What I found is first of all, the backside is really steep. Like loose your footing and slide down the mountain steep. Also the top of the oil is not a big area. Indra told me this property was viewed by a potential investor and had a surveyor who does excavation work, have a look at the hill. It would take major excavation work to run a road up there and to level the top of the hill. About us$ 50,000 worth of it. Then you would end up with one maybe two lots and a chopped flat topped hill thats pretty ugly.
Utilizing this hilltop was a major part of the previous "Dream Property" outline and is no longer valid.
On the day before we were leaving the owner came and met us at our resort in Sekongkang. I explained my situation and the difficulties with the property. We exchanged negotiated offers ending up not so close.
I am working on another modified version of the "Dream Property" for this investment property. Stand by.
Following are some pics of that jungle whacking hike.
So there is still a possibility of this property working out as a "Dream Property" concept investment. A couple things need to happen. One is the asking price must be reduced. Another is the land usage outline must be modified which i am working on and will present an updated "dream Property" concept soon.
end of update 01