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  #1 (permalink)  
Old 20th September 2007, 05:58 PM
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Lack of financing capping domain upside.

Bungalows with swimming pools in Singapore has risen to like $10m a unit. Bigger ones can fetch $20m. Rental yield is only 2% at most. How is this possible -> financing.
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Old 20th September 2007, 06:05 PM
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Re: Lack of financing capping domain upside.

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Originally Posted by touchring
Bungalows with swimming pools in Singapore has risen to like $10m a unit. Bigger ones can fetch $20m. Rental yield is only 2% at most. How is this possible -> financing.
The bottom line is nobody gives you capital to speculate with.

They need to see a business plan with a revenue stream that has some apparent basis.

Even ASCII dot com are still regarded as highly speculative by main stream financiers.

They are more likely to invest in company that invest in domains than to invest directly in domains. They understand company Profit and Loss Accounts and Balance sheets. They just don't get PPC.
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Old 21st September 2007, 03:54 AM
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Re: Lack of financing capping domain upside.

Agreed.

www.DomainCapital.com is helping along these lines. Availability of capital is what will push the sales prices of top domains from 5 or 6 figures, well into the 7 or 8 figur range. Right now sales in the 7-figure range are rare. Eventually they will be common.

Joe
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Old 21st September 2007, 05:20 AM
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Re: Lack of financing capping domain upside.

The target market won't need financing.

Anway, who said this was ever primarily about selling stuff.

Much of the sales at this stage are only happening because portfolios are not generating cash-flow. What the cash-flow develops, we can all just sit on a beach and forget about everything!
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Old 21st September 2007, 05:32 AM
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Re: Lack of financing capping domain upside.

Quote:
Originally Posted by Rubber Duck
The target market won't need financing.

Anway, who said this was ever primarily about selling stuff.

Much of the sales at this stage are only happening because portfolios are not generating cash-flow. What the cash-flow develops, we can all just sit on a beach and forget about everything!

I know of chinese cities where the condo market, prices rose 300% the past 3 years (yes, 300%), and half of the condos are empty because there are more units than they are renters.
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Old 21st September 2007, 05:34 AM
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Re: Lack of financing capping domain upside.

Quote:
Originally Posted by Rubber Duck
...Even ASCII dot com are still regarded as highly speculative by main stream financiers.

They are more likely to invest in company that invest in domains than to invest directly in domains. They understand company Profit and Loss Accounts and Balance sheets. They just don't get PPC.
Indeed... Anything online is still subject to the "speculative" label by financing companies. It's what's keeping the internet in its infancy, I believe, and it's still an enormous unrealized opportunity.

As for domains, most people gasp when you tell them that business.com sold for $7 million. Then when you tell them that it later sold for $400 million with a viable site and an outstanding list of partners, their eyes change. They don't quite get it, but they have the idea that there might be something to these sites. They have heard of the Wall Street Journal and Forbes and such. They think, gee, maybe...

I want to be clear that, in my opinion, that sale had less to do with the domain than the business plan and the partnerships. Some here have said otherwise. As a former employee of RHD, the buyer, I weep for business.com. They are sure to f*** it up.

Anyway, if you're looking for financing or liquidity you're looking short-term. There are no rules and there are no precedents here, and you will have government-owned entities fighting with well-funded public companies. These are not the conditions for a sound short-term investment. In such a case, you must be comfortable losing your investment entirely or extending your time horizon.
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Old 21st September 2007, 05:52 AM
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Re: Lack of financing capping domain upside.

Quote:
Originally Posted by touchring
I know of chinese cities where the condo market, prices rose 300% the past 3 years (yes, 300%), and half of the condos are empty because there are more units than they are renters.
Or maybe the investors are happy to forgo the rental income. This happened in London in the 1970s. Investors were buying huge office block skyscrapers and just left them empty. Centre Point the most famous became a major political issue. They just were not interested in renting. The property prices were going up so fast they preferred to keep everything in pristine condition.
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Old 21st September 2007, 06:37 AM
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Re: Lack of financing capping domain upside.

These guys don't need finance.

http://online.wsj.com/article/SB119033413713434614.html
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Old 21st September 2007, 06:46 AM
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Re: Lack of financing capping domain upside.

Quote:
Originally Posted by Drewbert


That's true, this is why i am hanging onto my Arabics, i'm still waiting for my million dollar payout. There will come a time when they got so much money, they'll drown in it if they don't spend the money.
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Old 21st September 2007, 07:52 AM
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Re: Lack of financing capping domain upside.

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These are the guys I'm waiting on. Sooner or later, one of them will want to become the Kevin Ham of the arabic world.

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Old 21st September 2007, 08:28 AM
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Re: Lack of financing capping domain upside.

Quote:
Originally Posted by Rubber Duck
Or maybe the investors are happy to forgo the rental income. This happened in London in the 1970s. Investors were buying huge office block skyscrapers and just left them empty. Centre Point the most famous became a major political issue. They just were not interested in renting. The property prices were going up so fast they preferred to keep everything in pristine condition.

True, but prime domains like country and major city names are different from regular real estate. Some stuff once bought cannot be replicated so one must acquire them at the first chance and not wait for "market price".

If there will be a scandal and the buckingham palace was accidentally sold to the French and converted to a zoo, where will the British queen stay?

Can britain create another buckingham palace?
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