chiongguo,

Dusun has been very kind to share some fair views on this matter. Do read and re-read again.

Heard some news of bh in east coast kena taken away by the land owners after successful. May be our Kelatan bros can verify whether true or lies.

Basic on my little understanding on the very basic principle of law, if a person standing at the wrong side in the eyes of law, no way he can sue the owner. Eg. a thief (or may be some Perh**** guys) broke into ur shop, fell and broke his leg, no way he can sue the house owner, simple as that.

This post has been edited by Bobby C: Jan 14 2010, 02:40 PM

DSMB,

I tabik you for your brave actions in pushing back the frontiers in swiftlet farming. To the best of my knowledge, the PBT has no clue on the building requirements of swiftlets. A friend of mine build one standalone on agriland and just before the building was complete, the people from PBT came and asked him to submit plans and the building must have enough windows, doors and proper staircase. So my friend had to build them and waited for approval. Later he had to spend more $ to seal them up.

As far as licensing is concern, he didn't have any because the PBTs still have not come up with sensible rates.

BHs are for business, no doubt about that. Even the electricity must be under business category.

This post has been edited by coolandy: Jan 14 2010, 08:57 PM

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Hi Guys, Dear all Swiftlets experts..

Has anyone heard of www . swiftletecopark . com ?
(sorry, not sure if i'm allowed to put up the URL, so...)

This seems to be another scheme coming up to offer public a piece of their pies (well i mean their swiftlets houses)..

If anyone knows any details about them please share..

Tks.

This post has been edited by numbertwo: Jan 15 2010, 09:21 AM

Exactly Cergau!!! I mean, the structure isn't even completed yet, income still uncertain and here they come to 'impose' their jurisdiction. I duely hope they can negotiate this matter professionally & legally. Since the BH is already on agriland (inthis case on tanah pusaka), the surrounding areas are still kawasan kampung. I also tend to demand services (of what, still mulling) if they still intend to include the BH as under their kawasan operasi.

Sharing suitable information is our responsibility as SSP's, to other SSP's. Just make sure we collect the necessary information before committing to build any BH. I still advise chiongguo to search for other options. I have heard rumors of proposed 'smart' partnership between bumi's & non-bumi's, but there were no specifications. Last year there was a Timb. Menteri who proposed/suggested that Malay reserves should be allowed to be rented to non-bumi's... but since then there was an eerie silence. Lets look at it this way, with the amendment... to me it will be a win-win situation, not many bumi's can afford to build such structures... and not all non-bumi's have access to cheap land. If the amendment is made, both parties can be more involved in the industry, and legal scrimmages can be brought to court (with the proper agreements in place).

Haha, i dont deserve tabik yet until the issue is solved. But i prefer to get things done and solve stuff head on. Yes, the electricity & water are according to commercial rates. I've installed the water... but thanks to the water services... instead of calculating and using 7200sqft (actual floor area), they instead used 2400sqft (area of 1 floor) as the rate of 'contribution'. This is where i thank some agencies regarding their 'budi bicara'. It would be nice if they included in the 1GP regarding these rates of amenities, premise permits & etc related. They should understand that the industry has risks, and not everyone makes it good in 1-2 years.

Fixed !!

I really doubt newly built BH on agri land can achieve a meaningful harvest within the fist 2 years to justify any fees or rates imposed by PBT.

Who says cannot get good returns so fast?

http://www.kamalswift.com/blog/wp-content/...ACTUAL-DATA.JPG

http://web.aeroswift.net/news.php

The links above quoted an income of RM3800 on the 13th month increasing at least 10% every month from thereon.

13th month = RM3,800
25th month = RM5,568
37th month = RM 17,468
49th month = RM54 820

The author said the data was taken from one farm that they owned, so they use it as projected income for their investors. So lucrative ans super successful.

No wonder so many government agencies want to impose huge fees on all BHs. Furthermore, they use an "enclosed" system whereas the majority use a free-to-come-free-to-go system.

The scheme above is very high profile with endorsement from Dato Mukhriz Mahathir. Also came out in Berita Harian dated 25th Oktober 2008.

If only I have the confidence to be as successful as them...........hmmmmmmmmm

This post has been edited by coolandy: Jan 16 2010, 04:49 PM

This formula is not fair and equitable. The cost of something is not the same as the value of that thing. The cost of a chip may just be RM50/= but it can be sold for a few hundred RMs. Similarly a shophouse + land could be acquired and built for RM100K but it could be sold for a cool million just because it is on some prestige location.

Agriculture land tended to be cheap and the cost of building is often inflated by the consultant or developer. The inflated cost is not 30 or 40 % but 200 to 300% of the actual cost.

When a person wishes to sell his business he would total up the assets, take away the liabilities and then add in a premium based on turn-over and profit. This premium can even be more than the cost of the business.

To me a more fair formula in calculating share holding is based on the cost of the land + cost of the building + the earning potential of the BH. As an example :

Cost of land : RM 50K
Cost of building a 2000 sq feet BH : RM72k (for building) + RM20k (for sound system/security etc.).
( I use RM 36 / sq foot as it was an actual quote I got. It was at a time when cement was at its highest and so was steel. The developer even threw in the meranti as he said he was the distributor and could give the planks at cost).

Number of Bird nest at saturation point : 2000 x 2 = 4000.
Assuming 80% saturation : 4000 * 0.8 = 3200 Bird nest.

3200 bird nest ringgit equivalet = 25 kg x 3000 = 75000.
(guesstimate - stand corrected - assuming 128 BN to 1 kg)

Land owner value = 50000 + 37500 = RM 87500
BH owner value = 92000 + 37500 = RM 129500

Total : RM 217000

Land owner share holding = 87500/217000 * 100 = 40%
BH owner share holding = 60%

If the land is along the flight path or feeding ground it should command a higher premium. This is subjective but it could be open for discussion and negotiation.

chiongguo,

There are many ways to determine risks even for matured industries, but for BH industry, there are simply too many unknowns. Your method seems fine if they are on freehold land and it is a successful BH. The situation changes rapidly when the anticipated income did not materialized. The agriland, if not developed, remains the same to the owner but to those who has put in their hard earn capital, it can be very stressful. Hence, if you factored in the risks, I would say, the land owner's risk is almost O and the capital provider is almost 100%.

Based on the often quoted industry standard of 70% failed BHs, I would reduce the landowner's share by 70%.

Landowner = 87500 x 0.3 = 26250
BH Owner = 129 500 x 0.7 = 90650

Landowner's share = 26250/(26250 +90650) = 22.5%
BH owner's share = 90650/(26250 + 90650) = 77.5%


If on malay reserved land, a further reduction is warranted.

Just my 2 sen. :-)

This post has been edited by coolandy: Jan 16 2010, 05:21 PM

I am always thinking of building a BH, design by me in an agriculture land with no worry that it would be demolished by the authorities but then, the price of agriculture land here is too high as my friend just bought one 2 acres of 80 years Leased Hold agriculture land about 10KM from town for Rm260K..... and I surely won't buy at this price. What do my friend thinking, is he so confident that he will get his return within a few years!!!!!

So, my own designed BH will have to wait until I get a cheaper land and not too far away from town where I can manage. New bizs, do BH only if you have free land available but not to buy expensive land that you may regret later when you fail to get enough EBN to pay Ah Long........as many told you that only 30% of the BHs are successful but we do have better results here.

I think what you have alluded to are (just my recollection of accounting lessons in school of 35 years ago)
1)Goodwill - that is the value ascribed to the name/brand of a running business. Yes there is a way of arriving at a value (but not important for the discussion).
2)Potential ? Well I do not think one can put a number on this as there are so many ifs on this.
There must be a reason there is no accounting term for this.
The closest I can think of is 'Potential Loss' ie what you will be losing if you give up the land for something else.
Say you are now renting to a farmer eg. you loss will be the rental.
But if you are now running a petrol station on it, then I agree to most that you mentioned in a normal case of a running business. ie the asset (whcih include the land in Qs), liabilities, goodwill, loss of potential earnings (for this you must show a records of earnings and come to a mutually agreed nos.). But realistically, would buy a petrol station (or any real running biz for that matter) to put up a BH?

Let's strip away the ifs and say you sell the land as is (kosong for simplicity). How much can you sell it for, you will bring in a professional valuer. They provide the value of the land based on some potentials if any; like you have mentioned, a housing development. Say you sell to a developer direct, do you ask for his future profit to be factored in? If you find an agreeable developer, you are most likely not to get your money cos' he's obviously going to go bankrupt. I think the operative word is NOW, how much can you sell it for NOW. Sure if you keep it for another 50 years the price will increase.

In short it's not equitable to factor in an imaginary future loss, more so in the BH biz.

As to the sifu/partner, developer inflating the cost, you can address that by asking a few developers including your partners quotation. I think the BH in SG Ruan's method is simple & neat.
Would like to hear other comments pls. cos I have always wondered abt how they do the JV for BH.

Just my 2bit, maybe a real accountant can shed more light.

Lost of income as a way to measure value is not feasible. Useability as a criteria is more realistic.

Recently someone bought a piece of land for RM100K per acre near my farm and I asked him why he was willing to pay so much for it. He said in business it is not the price that matters the most but usefulness. If something that is useful and he has use for it than he doesn't mind paying way above what the land is worth. The usefulness of the land was that the birds were playing and flying pass the piece of land and the potential of attracting birds into his BH is great.

Another similar piece of land nearer to town is worthless to him eventhough the land cost there had skyrocketed in recent days. Since it was worthless to him he won't pay a premium for it.

Likewise why are buildings with major anchor tenants command a much higher rental ? The economic principle is the same. Land cost is not the same as the value of the land.

Joint venture agreement can always include a clause to make it transferrable. If the BH doesn't work out then the Bh developer could sell his equity.

---

Added on January 16, 2010, 10:44 pm There is no rationale in making such risk weighted share holding.

The BH developer could transfer his equity to the land owner or to a third party. It is not a total lost.
If the JV is written in such a way that the land owner can also transfer his equity without transfering the land then the risk would be equally shared. There is also a clause that prohibit the sale of the land without selling the equity in the JV as well. This basically meant that the BH and the land are inextricably linked like siamese twin.



This post has been edited by chiongguo: Jan 16 2010, 10:44 PM

On JV with malay on malay reserved land, I spoke at length with a malay lawyer who is well-versed in syariah and civil law. The conclusion after the long conversation was that it is not advisable and froth with uncertainties and pitfalls.

I think we are in agreement in principle now. I think you are talking about market demand ie once a general area produces good results, neighboring land owners and brokers will definitely want to jack the price up for a fatter commission. I think that's what West Wing was lamenting in an earlier post. Valuers / Real estate agents will work on a last done deal valuation. So it's all demand and supply. This still works on the principle of how much NOW, not 5 or 10 years in the future. As such the valuation already has already factored in the 'potential value' (to use yr term) of the land. Agreed?
BUT not on a basis of future concentration of EBN, that's arbitrary.

It's far too complex for me to unravel. But my impression it's not equitable.

Let's look at it from a cash-cash JV.
1)you sell the land for cash
2)partner comes up with cash for BH
With the combined cash both of you buy a piece of land to build BH (and live happily ever after )
Your equity will be your contribution of the cash? Ditto for partner. Agreed?

Since it is yr land that's the viable site for BH.
1)You sell yr land to the JV co. that both of you own. (that means already transferred to JV co).
2)Partner gives his cash to the JV co & build a BH.
Equity in the JV co in the ratio of the cash equivalent contribution.

For both scenarios, all txns to be banked & a/c operated by jt a/c requiring both signatures.
Income is split according to ratio of equity.
This way risk is shared according to yr equity & no one has additional benefit over the other.
Yr exposure is also limited to yr equity.

If you need to split, then sell off the JV co that now owns the land & BH.
You may also buy back the land with the proceeds of the sale.
Except there's a catch, you will need to buy both the land & BH.

Cergau,

How much share should be given to the guy who runs the BH if no consultants are involved?

Cheers

aaaa... i wanted to point out the main issue again just now (issue of Malay reserve)....
but got dizzy reading about the accounting & economy stuff.
not my cup of tea these things. i sincerely hope chiongguo finds another option.

Define 'runs'. I'm assuming the trust is there. I'm having a problem identifying who to train & trust once the 1st year of operations has lapsed...

Oh... some clippings a few days back;

http://thestar.com.my/metro/story.asp?file...&sec=southneast

i'm hoping they get a larger amount from federal, and are allowed to disbursed them based on proper evaluation of things. i heard that there was a previous proposal for a state owned BH pilot project, whereby the income generated was used to help the needy locals (i think it was one of Uncle Tok's initiatives) but as scrapped once Mat Said took office. these politicians never change, they always scrap project of different political allegiances.

http://thestar.com.my/metro/story.asp?file...47272&sec=north

Recently ASNI has been mentioned frequently these past few months.

Hi Uncle WW, good day to you. I am a newbie and am interested to do BH@agriland. Was wondering if you are willng to take up any deciple? I would like to be under your mastership (pai sifu). Then we can try out your wonderful design of your BH@agriland.

Also, am willing to work under your guidanceship for a couple of months for just meals & shelter.

Thank you for reading my 1st posting. It took me about 2 months to read from V1 to V2.

Regards
Raymond

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This post has been edited by globalexm: Jan 17 2010, 09:37 PM

Check this out, http://thestar.com.my/metro/story.asp?file...127&sec=central Sound levels that astound. Guess we can request for a review on the 40db

Hi Raymond,

I must be sleeping too well yesterday..........my mastership, pai sifu....oboy!!!! Kami sini berkongsi pendapatan sahaja.....sharing our ideas, opinions and suggestions and comments on matter concerning swiftlets. So, if you are having difficulties in starting a BH or in the process of building one, I will and believe all here will try to make life more easier for you since we have gone thru the hardship of starting from square one.

Let say we discuss about your plan and your set up of your BH and if you are around my area, over a cup of Hai Ping Coffee and roti bakar if you need some free advice (Hey, nothing is free in this world, they say but I am very cheap..hahahaha). Cannot be your SIfu but your friend in need for mutual gain.....you gain some knowledge and I gain a new friend. Or much better, you may want to discuss it here as many Sifus are around to comment on it

Tell you the truth, you need to draft out your BH's plan and all relevant informations before coming for any coffee talk cos I am not going to provide you with all the information....I wil lcomment what I think is wrong in your setup if I can but pls. remember that it is only my personal suggestions to your plan and take it if you think I am right cos I don't provide 100% G on it ....but it shall be my sincere and truthfully opinions on your BH.

Lastly, sorry to say that my dream BH's design will not be share until I am ready for my own BH as I want to be the first one to try on my own BH design......made by WW for WW which shall be different from the rest......... and hopefully that I am right but maybe wrong as I am just trying very hard to think like a swiftlet and from the swiftlet's point of view. IshaAllah.............

Always remember that even when you are successful, you must look back and help all because only with unity, we have strenght and most importance of all, we are all friends of swiftlets.