Advice on large investment - Serious advice required.

[docc]

Hi Guys,

A close buddy of mine sold property in his home country and is considering transfering the whole amount here (around AED 10 Million). I actually advised him against the sale of property as i don't think its smart to put all eggs in one basket. In any case he did sell it and is now wondering as to what he should do with this amount.

He's been hounded by agents who are giving him all different kinds of opinions. He currently has 2 choices:

1) Do trading with this amount. I mean, invest in small properties, wait for them to appreciate and then flip them off. This way all his money isn't stuck and he has the freedom to invest whenever and wherever.

2) Invest the whole amount in office space. This amount should net him about 5000 Sft office space which he can lease out in areas like JLT or Tecom at 220/Sft (conservatively speaking) giving him about 11% annual rental yield which isn't a bad option actually. However, the idea of blocking the whole amount in ready property is scaring him as he feels that a property crash might be looming causing him to lose his life's reserve fund! I actually concur with this aspect as the idea of putting everything in one place is a tad scary.

What i suggested to him was to buy about 2000 Sft of office space and rent it out right away so that he has a stable source of rental income. The remaining 5 Million, i asked him to trade with so as to make some extra dough by flipping properties.

What do you fella's think he should do? He doesn't mind sitting on the money if required as if not multiplying it, he won't atleast lose it in wrong investments.

Thank you for taking the time to read and reply.

Best regards.

[jags]

one must never lose roof over the head. keep one small property in yr home country. buy one for yourself here. buy one for the rental income which will provide u bread n butter.play with the rest. this way u will not risk yr future. u r lucky to have big fortune. don't blow it away in greed.

good luck.

[DAYFox]

Another option for ur friend:

I am currently working with 2 friends of mine at a revolutionary distribution system for movie films. In short, it's a kiosk system where the best 1000 movie titels are stored on a digital basis. The customer can go there 24h a day and get his movie, take it home, watch it on any DVD or Bluray Player and after 24 or 48h the Disc distroys itself (all worldwide Patents registered on our company!), meaning no return of the DVD/Bluray Disc is needed (also no registration and it's 100% anonymous). Feebdack from the movie industry (Sony Pictures, Universal) was great already.
But now the option for ur friend:
We are currently looking for venture capital in order to put this system on the market mid 2009 with a pilot project of 20 kiosk systems. A total investmentsum of 3 Million AED is needed for that, which is nothing in comparison to the market potenial (2 billion € in 2007) we are entering. Everyone interested can now invest starting at 1 Million AED.
My suggestion the investment in ONEWAYfilm.de (that's the name of the company, www.onewayfilm.de) will at least tripple in one year.

Let me know if u (or anyone else) are interested and i can send u the full Businessplan (right now only in german).

I just mentioned this shortly to give ur friend another investment option

Good luck!

[firasdxb]

from properties to movies...thats a move...

ok ...for your friend ...he different options such as :

1- get ready appartments based on mortgage and pay installments from the rent ...this applies currently in best practice to JLT dubai.

2- buy plots which cost 1 million in ajman or sharjah, possibly it will multiply in a year of time.

3- get into abu dhabi market ... you can get office space in a project..and definitley it will multiply.

Villas i do not recommend that much..there is a variety of choices with different price range. For space units it is easy to sell and it is on demand specially on reem island and Khalifa city.

IF he can make an MOU with a UAE citizen and start buying lands in khalifa A or khalifa B cities..i guarantee you a triple of price in a year..but deed would be only on uae names, and lots of investors do this keeping a profit margin for the other party.

otherwise, stop thinking of property ...get a land in ajma..build it with bank...then after completion you recieve 30% of income and 70% goes for the bank, here you live in your building..you get money ...and after 5-7 years the building is yours..life in peace..rest your mind ..play with your kids...travel ...get a yacht ..

buddy there are lots of options..in dubai you have to choose hotspots and make a super research on prices before payming money..

in abu dhabi its only the begining....put money and watch high returns..

at the end ..if i had your money ..i will open a bldg material business..or a contracting co...better than risky stuff..

do whatever you like ...buy a ferrari ..

[docc]

Thanks for the responses guys.

"get ready apartments based on mortgage and pay installments from the rent ...this applies currently in best practice to JLT dubai."

Can you stress a little more on this Firas?

How easy is it to purchase plots of land as expats in areas like Ajman and Sharjah? Do we a need a local emirati as a sponsor or can we purchase it without their help?

Abu Dhabi is almost as expensive as Dubai (if not more). I'm talking about hot areas such as Al Reem Island and the likes.

As far as setting up a building materials company or a contracting company, he has NO experience in this field. Any idea as to how we can get more info about this?

Thank you again for the prompt responses and advice. Please do keep them coming in

Best regards.

[iced]

i recommend that it might be better to spend most of that money buying shares of which he could include the big developers. If he drip feeds the investment over a year then he should be in a very good position as equities will be safer than property at current levels.

For a risk adverse person the best bet is to find a high interest AED account and then in a year or 2 send money back to the UK at better exchange rate.

[soabu]

Being in your cash-rich situation, I would recommend buying whole floors in Abu Dhabi, namely Reem Island. Apartments can then be sold individually to ease cashflow and risk. Perhaps buy in Sun Tower etc which will be one of the first to complete on the island and therefore not have the problem of premium discount on the secondary market when you come to sell. You could sell some apartments here and hold the rest which will command huge rents due to the the large under supply of rental property in Abu Dhabi.

[docc]

Yea, thats a pretty good idea. I actually suggested the same in Business Bay but he though BBay prices were overinflated. I don't think he's really ever considered Abu Dhabi; but now that you mention it, there is definitely some great scope there. Considering they have a huge requirement, the announced projects would barely fill even 5% of that requirement.

Do you guys know as to how easy it is to purchase a plot of land in Ajman? Does it have to be with a local or can he buy it on his name? Also, is it really even worth it, considering the infrastructure (or lack of!) in Ajman?

Thanks again for all your advice guys. Please do keep it coming in.

Regards.

[DAYFox]

If i were ur friend, i would invest at least 50% of his capital in BusinessBay/Dubai. You can still get something for 2200AED/sqfet office space and prices will reach 3.000AED/sqfet soon and if not within the next 6 month, than once ur building is completed and the metro + infrastructure is ready.
Once BusinessBay is ready it will be THE COMMUNITY and THE LOCATION to be! Eventhough prices are already high now, i still think there is much more space to go up! And if u buy in a good location and close proximity to the entrance + Metro station u can't lose... BUT that's only my point of view

[firasdxb]

10 million is not big money... and regarding Reem island..he can only get a floor ..and not floors...otherwize money is in risk ... example ..

if floor is 9850 sqft x 1800 AED (best price) = 17,730,000 ...

if paid amount is 15% of 1500 AED (original price) then = you have to put someithng arround 6 million, and after 4 months...you have to make next installment of few millions..then the TEN million is finished ..and if you couldnt sell the floor ..then your money is in risk ...

i believe hydra villas or reef villas are much better....due to many reasons..like big demand on villas with higer turn overs.... less villas projects offered in AD market ...

for appartments...
i thinnk the island will serve more than 150,000 population...and also dont forget AL Raha beach development...and manazel appartments...so we have lots of appartments...

someone said buy shares... i think you are not aware of the crisis..as we have been stuck since 2005 with damn shares..and we lost more than 50% of capital...

so please dont advise to buy shares...its a nightmare...