CEO Investor Report - April 2021

*This is a monthly business update for our current investors and those that may be interested in investment opportunities with our company. 

Moving Forward

2021 has had a dynamic start to the year regardless of the Covid pandemic hitting hard in recent weeks. As of this writing, the Cambodian government has implemented an unprecedented mandatory lockdown of Phnom Penh for 2 full weeks from the 14th to the 28th of April. Sweeping travel restrictions have literally halted all import of materials to our project sites. There has been closure of all non-essential businesses around the city, and staff of these businesses are unable to work and face loss of wages. This Covid-inflicted lockdown has fortunately coincided with the Khmer New Year holiday which our company had already been planning to close the offices for 1 week. Due to the travel restrictions, workers living on site were able to work from the 14th to the 21st of April until materials ran out. This means we will have a net-zero actual loss of construction time due to the aforementioned planning of 1 week of holidays. This is just a short delay, and in all actuality a very small speed bump in the overall path of our company's journey. This year is ramping up to be another successful year, and this is a time to keep moving forward, not for retreat.

Upcoming Key Milestones

This year we have several key milestones we will reach regardless of the Covid disruptions. These include: 

1. the completion of the construction of all phases of Project 1
2. the opening of our first fresh produce and retail market (Romdul Market)
3. and the introduction of our 5th newest floorplan to the market

Project 1 was started in January of 2019, with only 15 homes. Since then we have expanded 7 different times bringing the whole project to a size of 336 homes and 31 land lots with 8 distinct phases of construction. The target completion date for all construction in Project 1 is by year-end 2021. We have achieved 95% sold units in the entire project with only 20 units remaining in available inventory.  

Romdul Market is located in Project 1 and has already begun construction. The market will be an open but covered market with 220 booth stalls for vendors to sell either fresh produce or finished goods. Romdul market will span over 20,000 square feet (1,900 m2) and will be accessible for residents in the Borey as well as non-residents that live in the surrounding area.  

The Oasis Villa is our newest flagship floorplan available in our lineup of homes. It is a 4-bedroom, 4 bath, premium level home starting at $275,000 USD. This 3-story home has over 4,400 square feet of living space and features 2 living rooms, 3 balconies, and a massive walk-in closet for the master bedroom. Our model home for this new floorplan will be completed within the next 30 days. We have already sold over 10 Oasis Villas to date, even prior to our model home being fully complete. 

Sales, Marketing, and Growth

Borey Williams has now surpassed $33,000,000 in total sales since our start in 2019. Our sales are not limited to home and land sales only as we continue to exploit other sources of revenue. These additional revenue streams include:

1. market booth, mini-mart, and plaza shop sales
2. customization sales
3. upgrade sales
4. interest income
5. HOA (management) fees
6. utility surcharges

The company is seeing a shift in customer demand to the larger more expensive floorplans which also have higher gross margins than our smaller floorplans. We average a 21% combined gross margin and aim to increase this to 25% or more in subsequent projects and as we continue to introduce more unique floorplans into the market space. In project 2 we have approximately $19,000,000 left in inventory of available homes totaling 143 units of 220 total. Our target is to be completely sold out of all units in project 2 by September this year. 

Research shows that on average most property developments in the USA and other western countries allocate between 0.5% to 1.5% of their gross sales to their marketing budgets. We have averaged only 0.2% of gross sales being allocated to marketing, well below industry averages. After recently becoming aware of this, I have decided to make steps to substantially raise our marketing budget to ramp up the speed of sales and awareness of our brand. This will put us on track to achieve our main growth objective which is reaching $100,000,000 per year in annual sales. We believe we can achieve this target within the next 2-4 years, and increasing our marketing expenditure by 4-5x will play a large part in this. 

Small Wins Are Still Wins

Our 1st and 2nd projects are large in scale, spreading over 15 and 10 hectares respectively, each with hundreds of homes, and each include a market, a school, a clinic, and lots of green space. However, there are frequently opportunities of smaller size which we consider as well, being mindful to not simply be looking for perpetually larger deals while missing out on smaller opportunities all around us. A few of these opportunities we are starting in the coming weeks are as follows:

5 homes in Prek Pnov district - We acquired a 1,200 square meter land plot several years ago in the Phnom Penh district of Prek Pnov. We initially purchased this raw land for only $11,000. After sub-dividing the land we sold 4 of the land lots for $10,000 each, and are about to start construction to build 5 homes on the remaining land. Through our Home Loan Program, we will offer 100% in-house financing to customers that buy these homes. We will carry the notes for up to 20 years and charge a moderate interest rate. Including all interest payments and if customers don’t pay off their notes early, this small project will gross over $1,200,000 in revenue and provide cashflow of $5,000 per month for the next 20 years. 

Custom homes – We are in the beginning stages of expanding our brand to offer custom home construction. This comes as a great natural extension to our brand where customers that love our home designs and our quality standards can purchase the construction of one of our floor plans on their own personal land. We offer full architectural and engineering service to either modify one of our existing floorplans or completely design a brand-new floorplan just for them. Our first customer to purchase this service is in Battambang province and has purchased our services to build a modified Oasis Villa floorplan on his privately owned land.  

80 land lots by highway 51 – About one year ago we purchased a 1.5 hectare plot of land about 25km west of the airport, near to national highway 51. This is a growing area for residential construction as well as industrial development. We have drawn plans to section this land into 80 sub-divided land lots. These lots will be offered to customers at 100% financing for up to 12 years. Including interest and if customers don’t pay off their notes early, this small project will gross over $1,000,000 in revenue and provide cashflow of $7,000 per month for the next 12 years. 

Available Investments

Our margins and business model allows us to continue to provide excellent investment opportunities to our financial partners. The beauty of investing in real estate is that your investment is not just on paper but is backed by actual physical properties. Unlike other industries, property development gets to reap the rewards of appreciation, interest income, planned price increases, and predictable cash flows. We have 3 main investment opportunities for our financial partners, all of which exceed returns of most available investment opportunities available in the market. Our current opportunities include: 

Option 1: Fixed term

• 2 year minimum term
• 20% interest per year 
• Interest plus principal payable upon term maturity
• Minimum investment amount $250,000

Option 2: Credit line 

• 3 year minimum term 
• 15% interest per year
• Monthly principal and interest payments to investor
• Minimum investment amount $100,000

Option 3: Purchase a block of homes

• Minimum 5 home purchase
• Can generate cashflow straight away through our customer Home Loan Program
• Can use as rental properties or hold to sell at future date
• Return on investment 15-20% or more
• Special investor discount for multiple home purchase

Investors seeking larger investment opportunities in excess of $1 million may have more options available to them than these listed such as profit sharing or joint venture. ALL investors are welcome to contact myself or the team directly do discuss more in depth about investment opportunities available. The vast majority of our financial partners are outside of Cambodia so YES, foreigners can invest and own property in Cambodia.  

There is always a lot happening here at Borey Williams so make sure you connect to our Facebook, Linked-in, and YouTube channels for the latest news and updates. I will be sending these brief investor reports out on a monthly basis to keep you in-the-know.  

We’ll talk soon. 

William