"Is that over 38 million his? He still owes the bank more than 500 million!" the man said, unconvinced. "If his 1,000 apartments aren't all rented out, or if housing prices suddenly plummet, he wouldn't be able to cry even if he wanted to."
"What if I told you that nearly all of his 1,000 apartments are rented out now? Do you still think he'd be so distraught?" Mr. Zhuo said earnestly. "Besides, given the current trend in the real estate market, do you really think a major drop is likely? Let me tell you, if he were to sell those apartments now at the original price of 6,400 per square meter, he would make a profit of almost 2,000 per square meter. And I can confidently tell you that at 6,400 per square meter, even without a discount, they would not be hard to sell at all."
"This has only been a little over three months. At this rate, housing prices might rise even more by the end of the year. Next year, they're expected to increase by at least ten percent."
"The government has significantly reduced the supply of land for construction this year! It's already a foregone conclusion that housing prices will rise over the next few years. What's the price of land per square meter now? After two or three years, when these lands are developed and put on the market, what will the starting price per square meter be?"
"By that logic, didn't you sell at a loss?" the man who looked down on Yi Anguo as a pauper said. "Even if he does succeed and become wealthy in the future, it's only because you helped him. Without your help, he'd be a penniless man his whole life, fit only for tightening screws in a factory."
"If you hadn't helped him, why would the bank lend him money? And a loan of 500 million, at that!"
"That depends on how you look at it," Mr. Zhuo said. "I wouldn't say it was a loss. At the very least, I was able to quickly recapitalize 500 million in funds, repay my bank loan, and secure an extremely high credit rating with the bank. It'll be much more convenient to borrow even larger sums in the future."
"While it's true I helped him, and he couldn't have possibly bought 1,000 apartments and secured a five-hundred-million-yuan loan without me, I wasn't just helping him. I was also helping myself."
"Besides, even if I'm willing to help, do you think just anyone has the guts to accept it? Even if I wanted to give someone 1,000 apartments, do you think just anybody would dare to take them on and owe the bank several hundred million?"
"Isn't your development on sale right now? Why don't you find some poor kid and have him buy a few hundred apartments from you? See if he's willing to take on hundreds or thousands of your apartments and owe the bank several hundred million."
"As for owing the bank several hundred million, is that even a big deal? How many of the country's billionaires, those with assets in the tens of billions, don't owe money to the banks?"
The wealthier a person is, the more they owe the bank. That's just reality.
Mr. Zhuo's words left the other man somewhat speechless.
In fact, he was quite envious of Mr. Zhuo for selling 1,000 apartments in one go, something that was practically unheard of. How long would it normally take to sell 1,000 apartments? Although the market had picked up slightly in the past few months, with prices gradually returning to their original levels and sales volume increasing, you still couldn't sell a thousand units in less than half a year, maybe even a full year. And as Blue Coast was the most expensive development in the Houhai area, selling 1,000 apartments was no simple task, even with its high sales figures. Even though he had sold them for much cheaper, as long as they were sold, it was impossible to lose money. There was still a profit to be made, just a smaller one. But because he got his capital back so quickly, he was able to acquire another plot of land. The government's supply of development land was nowhere near what it used to be; this year's supply was less than half of last year's! This meant future land prices would be higher, and future housing prices would be more expensive. By securing a plot of land ahead of time, he had already earned a fortune.
Yi Anguo quickly arrived at the Marriott Hotel, wearing a pair of cheap leather shoes. He had originally been wearing flip-flops but figured that showing up to a grand hotel in them would be a bit too much. Mainly, he was worried the hotel security might refuse him entry for improper attire, which would have been embarrassing. He wore a very ordinary short-sleeved T-shirt and casual pants, with his entire outfit costing around 200 yuan.
It wasn't that he intentionally dressed so shabbily; it was just that he had always worn clothes from street stalls, and these leather shoes were his best pair.
Guided by the usher, he met Mr. Zhuo and his two friends. One was surnamed Ren, named Ren Xingsheng, and the other was surnamed Ou, named Ou Xiaolong. Both were in real estate development. The one who looked down on Yi Anguo, thinking he was just a poor boy, was Ren Xingsheng, who owned a company called Prosperity Properties. The other, Ou Xiaolong, was also a developer and owned a company called Dragon Rise Properties. All three men were active in the Blue Mountain District. The difference was that Ou Xiaolong and Ren Xingsheng were focused on the Qianhai area.
Currently, property prices in the Qianhai area were generally on par with the Houhai area, though Qianhai was slightly cheaper. The residential complexes developed by Mr. Zhuo's company were known for their focus on quality and environment, making them relatively high-end for both the Qianhai and Houhai areas. His prices were also the highest. At present, the public sale price for Blue Coast Phase Three was 6,500 yuan per square meter, with all discounts canceled.
Most properties for sale in Houhai were priced between 5,300 and 6,000 yuan, with a few around 4,800 yuan. Qianhai, on the other hand, had many properties for sale between 4,300 and 5,000 yuan, and quite a few between 5,000 and 6,000 yuan, but almost none were priced over 6,000 yuan. In this era, Qianhai was still a step behind Houhai. However, Qianhai's properties had great development potential, and Houhai wasn't far behind. Linked together, they formed the commercial heart of Shenzhen.
"I heard that your 1,000 apartments are almost all rented out. You can finally relax and just collect the rent each month. Once they're all leased, you should be making a few hundred thousand a month, right?" Mr. Zhuo asked with a smile, pulling Yi Anguo to sit beside him after making the introductions.
"Not quite. The main issue is that the apartments are too large and the rent is too high, making them difficult to lease. That's why I didn't dare ask for a high price. I'm just hoping to break even, covering the monthly mortgage and management fees with the rent," Yi Anguo said, shaking his head. "If I had chosen a different development where the prices weren't so high and the layouts weren't so big—like 60 square meters for a two-bedroom and 80-something for a three-bedroom would have been plenty—then they would have definitely rented out easily, and I could have made a profit!"
"You little rascal, taking advantage and still complaining! Do the math. How much did I sell those apartments to you for, per square meter? Less than 4,260 yuan. You tricked me back then. Don't think I didn't know; I just didn't want to argue with you," Zhuo Weidong complained, his face darkening with indignation.
"You think just anyone has the clout to sell you 1,000 apartments and get a bank loan approved?
"The bank gave you a preferential interest rate on that loan. How much money did that alone save you?
"I even waived a year of management fees for you, saving you millions.
"I had to pull a lot of strings to get the bank to approve your loan for a thousand apartments!
"And you have the audacity to stand there and complain that I sold them to you for too much."
"Brother Zhuo, you got taken for a ride? Tell us what happened," Ou Xiaolong asked with an interested smile. Zhuo Weidong was an incredibly shrewd and calculating man. People usually lost out when dealing with him; it was unheard of for him to be on the losing end.
"It's embarrassing to even talk about. I wasn't paying attention at the time. You guys have no idea! This kid spun me around in circles with his schemes," Zhuo Weidong said with a look of frustration. "Originally, he was to make a down payment of ten percent of the public price, 6,400 yuan per square meter. For a 100-square-meter unit, that's 64,000 yuan. But because he was buying so many, I required at least a twenty percent down payment.
"Then he said he wanted to pay the twenty percent based on the actual transaction price. I thought that was fine, so I agreed. Then the kid says that 6,400 minus the 1,500 yuan cash rebate per square meter makes the actual price 4,900 yuan per square meter, and he'd pay twenty percent of that.
"At the time, I figured I'd already run the numbers. The original actual transaction price was 4,760 yuan per square meter. Because he bought so many, I gave him another 500-yuan discount per square meter, bringing the final price down to 4,260 yuan. So if he was offering to pay a twenty percent down payment based on 4,900 yuan per square meter, I was more than happy to agree!
"But lately, the more I think about it, the more I realize something is wrong. He was supposed to pay a down payment of one-tenth of the list price, which is 64,000 yuan. The second tenth of his down payment, even at the transaction price, would be 42,600 yuan. That adds up to 106,600 yuan. But this kid only paid 98,000 yuan! That means he shorted me 8,600 yuan, which works out to another discount of 86 yuan per square meter that he managed to squeeze out of me."