"Our property is essentially a zero down payment offer, and you even get money back," the saleslady explained. "If you buy a 100-square-meter apartment with a total price of 640,000 yuan, our developer waives ten percent. You only need to make a down payment of ten percent yourself, which is 64,000 yuan. Then, the developer gives you a cash rebate of 1,000 yuan per square meter, which comes to 100,000 yuan. After subtracting the 64,000 yuan you paid for the down payment, you'd still have 36,000 yuan in cash."
"However, you also have to pay various taxes and fees, but you should still be able to pocket over 20,000 yuan in cash."
"What if I buy it to rent out? Will the monthly rental income cover the mortgage payments?" Yi Anguo inquired further.
"If you rent out a hundred-square-meter apartment with three bedrooms and two living rooms, based on the rental income from the first two phases of Blue Coast, the rent is generally over 3,000 yuan. Some are higher, some lower, but it's roughly between 3,000 and 3,500 yuan. With a 30-year mortgage, your monthly payment would be about 2,700 yuan, maybe even less. It's probably around 2,600-something yuan, since mortgage interest rates have dropped a few points this year."
"So, if you're buying property as an investment to rent out, relying on the rental income to cover the mortgage is no problem at all. You could earn a few hundred yuan each month from renting out one apartment."
He calculated in his mind: the 20,000-plus yuan cash-in-hand from one apartment could cover seven to eight months of mortgage payments. Property prices in Shenzhen City hadn't increased much in 2004, but by the end of 2005, the average price within the city had risen to over 8,000 yuan per square meter. By 2006, prices began to soar, with the average transaction price reaching 12,000 to 13,000 yuan per square meter. But the real surge happened in 2007. At the beginning of the year, the average price was just over 15,000 yuan, but by October, it had climbed past 20,000 yuan. The opening price for new high-end residential communities was as high as 40,000 yuan per square meter, while new developments outside the main city reached 18,000 yuan per square meter. Moreover, they were in such high demand that everyone scrambled to buy them, and they sold out immediately upon release. Supply simply couldn't keep up with demand. That was still about four years away. If the rent was enough to cover the mortgage payments, this investment was a sure thing—a deal with guaranteed profits. The only question was, if he bought multiple properties, how large would the down payment need to be? He estimated that the ten percent waived by the developer plus his own ten percent—a total of twenty percent—wouldn't be enough. If he had to pay another ten percent for the down payment, he wouldn't be able to afford many apartments with the money he had.
"Actually, I'm planning to buy several properties," Yi Anguo said with a smile. "So, could you please get your manager? I'd like to speak with them to see if there are any additional discounts."
"Oh, I see! Of course. Let me take you over there to have a seat and get some water first," the saleslady responded.
"Sure, thank you! By the way, what's your name? After we finish negotiating, I'll still need to find you to buy the apartment!" Yi Anguo said, implying something more.
The saleslady was overjoyed when she heard this. Of course she understood what Yi Anguo meant.
"My name is Li Sisi. May I know your surname, sir?"
"My surname is Yi, as in 'easy' and 'I Ching'."
"All right, thank you, Mr. Yi. Please wait a moment, I'll go get our manager to come and talk with you," Li Sisi said with a smile.
It wasn't long before Li Sisi returned with a middle-aged man. "Mr. Yi, this is our Manager Zhang," she said, introducing him as they approached Yi Anguo. "Manager Zhang, this is Mr. Yi. He's looking to buy multiple apartments and wanted to speak directly with you."
"Hello, Mr. Yi. Welcome to Blue Coast!"
"Hello, Manager Zhang." Yi Anguo stood up politely and shook the man's hand. "The reason I troubled you to come over is to ask about purchasing multiple properties. If I were to buy, say, ten or even a hundred units, what is the minimum down payment percentage you would require?"
"Mr. Yi, for a second property and any subsequent ones, the minimum down payment is thirty percent. That's the lowest we can go. After our developer waives ten percent, you would still need to provide twenty percent yourself. However, your first property can still be processed with a ten percent down payment," Manager Zhang explained.
"I see. So, even if I were to buy ten or even a hundred apartments, the thirty percent down payment would still apply to all but the first?" Yi Anguo asked again.
"There are no restrictions on that, but I'm not entirely sure of the specifics. After all, no one has ever bought dozens or hundreds of apartments from us at once," Manager Zhang said. "Are you planning to buy dozens, or even hundreds, of units, Mr. Yi?"
"If I don't have to pay out of my own pocket and can even get cash back, why wouldn't I buy more?" Yi Anguo asked with a smile.
"I'm afraid that won't work," Manager Zhang said, shaking his head. "If you only buy one apartment, it's true you don't have to pay anything and you even get cash back. But if you buy two or more, you must make a twenty percent down payment yourself. So you'd definitely have to spend your own money."
"What if we inflate the property price?" Yi Anguo proposed. "For instance, let's say an apartment is actually worth 500,000 yuan, but you list it for 650,000 yuan on paper and sell it to me. The thirty percent down payment would be 195,000 yuan. The bank loan would then be 455,000 yuan. As far as the bank is concerned, I've already paid the down payment."
"Doesn't that mean I don't have to spend a cent on the down payment?"
"Your company was already offering a discount equivalent to ten percent of the price, which would be 50,000 yuan on a 500,000 yuan apartment. After I get the 455,000 yuan loan from the bank, you're still short 45,000 yuan to cover the full 500,000 price. Since your discount is 50,000 yuan, and you only need 45,000 yuan to cover the difference, you can just give me the remaining 5,000 yuan in cash."
Manager Zhang was utterly astounded. This Mr. Yi was a real genius! Following his method, a buyer really wouldn't have to pay a single cent and would even get cash back. The only downside was that the loan amount would be higher, and so would the monthly mortgage payment. A loan of 350,000 yuan would have been enough originally, but now it would be 455,000 yuan. The monthly payment would jump from 1,670 yuan to 2,400 yuan, an increase of over 700 yuan per month. But those weren't his problems to consider. His goal was just to sell the apartments.
"This approach should work without any problems," Manager Zhang said, having thought it through. "So, Mr. Yi, how many apartments do you actually want to buy?"
"If you can make that happen, I can buy any number of them!" Yi Anguo said with a laugh. "As long as I don't have to spend my own money and still get cash back."
"Please wait a moment. I'll go to my office and call the boss to clarify this," Manager Zhang said.
"Of course," Yi Anguo nodded. "And if there's no issue with the plan, we can discuss whether the price can be discounted even further. After all, I'm not buying one or two units, but potentially dozens or even hundreds. The price should be negotiable, right? Wholesale and retail prices are always different."
"That's no problem. If this plan is feasible, we can definitely offer you an additional discount," Manager Zhang said with a smile. "I'll ask the boss what the maximum discount we can apply is."
「Fifteen or twenty minutes later」
Manager Zhang hurried back. "Our boss, the developer himself, is coming over to speak with you personally," he said. "You can ask him directly for the lowest possible price."
「About half an hour later」
Several people arrived and invited Yi Anguo and his daughter into a conference room. Yi Anguo had Li Sisi keep Yi Xinyi company for a while, then began his negotiations with the developer.
The developer's surname was Zhuo. After they introduced themselves, President Zhuo smiled and said, "Mr. Yi, the method you mentioned of inflating the property price is a bit difficult. Our public sale price is 6,400 yuan per square meter, which is already relatively high. If we raise it to eight or nine thousand yuan per square meter, the bank is unlikely to believe it. They have their own assessment standards."