Solving problems brings in wealth

Din Somethearith, co-founder and executive director of Frangipani Villa Hotels, holds up a copy of Unfair Advantage, one of many self-help books on alternative methods of financial development and thinking by his favourite author, Robert Kiyosaki. Photograph: Stuart Alan Becker

Monday, 14 May 2012

PhnomPenhPost

One of Cambodia’s true rags-to-riches success stories is that of Din Somethearith, co-founder and executive director of Frangipani Villa Hotels.

Frangipani, named for the blossoming tree, is a chain of boutique hotels, one of which is located just off Street 178 at number 43, down a narrow lane which opens into an outdoor garden and dining area with adjacent hotel reception.

A student of alternative financial thinking and an avid reader of self-help author and financial literacy activist Robert Kiyosaki, Din believes in 10-year rental agreements, focusing on the people, a stand against sex tourism and distinguishing between “good assets” and “bad assets”.

“Cambodia was poor so I want to make my country better. I don’t want my country to be remembered as poor and for the Khmer Rouge. I want it to be prosperous with smiling faces,” he said.

“We work with orphanages and we give bicycles. We have charity box where our guests and donate and we give another two thirds after that. If the guests give one dollar, we add double with two.”

While Din and his two partners are enjoying steady income from four villa hotels today, they started out far less fortunate, borrowing what they could from relatives and friends, building their way forward step-by-step.

Born in Phnom Penh in 1974, Din was ten months old when the Khmer Rouge took over. Now he’s 38 years old, with a Thai wife and a son.

With a mother from Kampong Cham and a father from Prey Veng, young Din was forced with his family to move to his father’s town in Prey Veng. His father had worked for the government, so he was sent away for “re-education” and was never seen again.

“I knew him only through photos.”

Din and his one elder sister survived as small children through the Khmer Rouge period.

“My mother worked very hard, 10 hours per day on the farm and it was very tough to survive because we were city people.”

When Din’s mother was asked to go to another province where the soil was fertile and the living was easier, she recognized one of the Khmer Rouge soldiers was wearing a shirt that belonged to one of the people she’d seen earlier who had left on a similar trip to Pursat or Battambang to a “prosperous land” and a “better life”.

She made a cover story that the kids had diarrhea and saved the family.

“My mother was very smart. She recognised the shirt that had belong to someone they killed.”

Finally, after liberation in 1979, the family with 4-year-old Din came back to see their old house in Tuol Kork, which was abandoned, but the area was a kind of Vietnamese army camp.

“They allowed us to come into our house but we could not live there because it was like a military camp. A few months later during the early the place had settled down. Din and his family lived at street 188 in Boeung Keng Kang 1.

“During that time there was no water supply, no electricity. We got our water from the river,” he said.

Few people had shoes to wear in those days but gradually the Phnom Penh markets started to carry them.

“My mother bought some shoes for me, but they got stolen the next day at school because none of the other kids had shoes.”

“We were not clear if the Khmer Rouge would come back or not, and we didn’t trust the Vietnamese either. We stayed with my uncle and my mom in a shop house until 1989.”

Din enrolled in Sisowath High School, graduating in 1992. He remembered that when the United Nations arrived, Cambodia really changed.

“People rented out villas to the UN staff and some people got money very quickly. Demand for housing was very high and land prices increase dramatically at that time.”

Din won a competition to learn architecture on a scholarship at the Institute of Khmer Habitat. He worked closely with Danish-trained architects and designed a lot of social projects including health centers.

Following his graduation in 1999, Din went to work full time for UN habitat, working as a technical officer on a lot of different projects before winning a scholarship to the Asian Institute of Technology in Bangkok where he earned a master’s degree in Urban Environment Management.

During his two years in Bangkok he met the lady who would become his wife, Saranya, who is a landscape architect and teacher at Thailand’s prestigious Chulalongkorn University. The couple have one son, Supicha, age 7.

After his schooling in Thailand, Din returned to Cambodia and worked for the Asian Development Bank, the World Bank and JICA all as a consultant in urban development. The Cambodian government offered him jobs, but he refused. In 2007, Din became country manager for UN Habitat.

“The work was very tough, dealing with city issues, evictions, and my life was difficult dealing with officials.”

Able to save a few thousand dollars, Din began thinking about building a small boutique hotel. They found a villa dating back to 1960 along Street 252, which happened to be owned by one of his friends’ mothers. Because of not much money between Din and his partners, it took eight months to complete the renovations.

Within six months the rooms were mostly full of foreigners, from Europe, America and Australia. From the very beginning, they insisted on good behaviour in the hotels: no smoking and strictly no sex tourism.

All Frangipani Villa hotels have solar heating systems as well.

The second property Din and his partners acquired was on Street 71 near the World Vision office.

“We made 15 rooms, took more loans from the banks, and borrowed some money from relatives. I and my partners kept working during that time.”

In 2009 Din and his partners found an opportunity in Siem Reap at a time when a lot of guest houses there were closing and materials were cheap.

Today, the Frangipani Villa Hotels group has five properties, totaling 140 rooms, all of which are leased for a term of 10 years. Din and his partners intend to buy the properties when the leases are up.

Din is influenced heavily by the work of Robert T. Kiyosaki, a Japanese-American from Hawaii who promotes alternative thinking in finance.

“He teaches us to start out small and use leverage. He said if you want to be rich, you have to serve a lot of people, and you have to be able to solve many problems. You have to know how to use debt and distinguish between good debt and bad debt.”

According to Din, good debt is that which somebody pays for you -- like servicing a loan with rent payments -- and bad debt as that which you have to pay yourself.

“Our customers pay our debt.”

Din agrees with Kiyosaki against investing for capital gain like a gambler, encouraging instead a business that creates money by using information.

All of the Frangipani Villa Hotels are finished in tasteful architecture, environment friendly, with solar hot water systems throughout.

“We run the business to solve people’s problems. Foreigners who come want to have a clean environment with social responsibility. We don’t run the business for money. We want to build jobs for my people.”

Din is proud to be Cambodian and encourages others who are poor to have ideas, invent new businesses, use leverage and realise their dreams.

“The power of financial education is that you realise you don’t need to own it. You don’t need a 30-year lease. That’s a lot of your life. Ten years is enough. To run a business, it is not about money; it is how you use your idea. You don’t require that your parents are big business people. I keep telling people that I came from poor family with no father and no shoes to wear. “

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To contact the reporter on this story: Stuart Alan Becker at stuart.becker@gmail.com