Reborn, back to a small county town to become a wealthy family

Chapter 663: Killing Three Birds with One Stone
It is only 2102, and crops are still being grown on the land where the Wanda Shopping Mall is being built.

The entire city's eastern boundary has not yet expanded there, but the low-density plots near residential areas have been auctioned at 400 million yuan per mu. In addition, the density of commercial land is far higher than the 1.5 density of residential land. If evaluated according to market prices, the price per mu will not be less than 500 million yuan per mu.

Even if it does not have the fame of Wanda, it can be acquired at a price of 30 yuan per mu. However, as long as the price is controlled within 100 million yuan per mu, there will be no loss in any way of development.

You have to know that the Wanda model is not all about business.

Next to Wanda Plaza, there must be Wanda Mansion.

The land is almost given away for free, and after adding the construction costs, the commercial residential houses are sold at market prices, and the profits earned are enough to cover the cost of the commercial complex.

In addition, you can also get a star-rated hotel and a movie theater chain for free.

For Luo Yang, the best result is to use the money earned from real estate projects locally.

So after he proposed the concept of the commercial complex project, the atmosphere at the dinner party suddenly became lively.

"Mr. Luo, how much is the total investment for a project like this?"

For some information that one wants to know, the leader doesn't necessarily need to be asked. Ji Jianzhang, who has mastered the art, took the opportunity to raise questions while clinking glasses.

"The overall investment is more than 10 billion yuan."

Even if the construction costs of the houses are taken into account, it would not cost that much money, after all, the land is essentially given away for free.

But as for the investment amount, as long as it's not too outrageous, it's fine to double or triple it.

"Of course, this figure also takes into account the cost of capital."

Luo Yang didn't want to exaggerate, so he explained a little: "Now that the real estate market is good, the cost of project financing has also increased a lot. A few days ago, the bosses of two real estate companies in Shanghai mentioned that they used financial platforms to raise 5 million yuan each, and the interest rate was 15%."

"15% annual interest?"

Shen Zhenxin from the Ministry of Land and Resources was surprised and asked, "If you calculate it this way, the interest on 5 million yuan in funds will be 7500 million yuan in a year?"

"Yes, 7500 million in interest per year."

Luo Yang nodded and said, "And they are all borrowed for two years, so the interest to be paid is 1.5 million."

"With such high interest rates, can the project sustain itself?"

Tang Hailin was also very surprised: "Is the profit from real estate development so high now?"

"Uncle Tang, that's not how we calculate it."

Luo Yang explained with a smile: "They used leverage in the development process, and took advantage of the development rhythm. The 5 million yuan was used to develop more than one project in two years."

"Oh, what do you say?"

Tang Hailin immediately became interested: "This will also be useful for our future management."

In fact, this is not a secret in the real estate development industry. Even if Luo Yang doesn't say it, he can ask the person in charge of another real estate development company.

"For example, a plot of land worth 5 million yuan is borrowed by a development company at an annual interest rate of 15% to purchase the land for development."

Luo Yang explained: "After getting the land, you can put it in the bank for mortgage. According to current regulations, it is usually 60%, which is 3 million yuan. Of course, this loan will not take too long, usually about 8 months to 1 year. After the 3 million yuan is in place, the development company will take out 2 million yuan and get another piece of land, and the cycle will continue."

In 2012, there were basically no outside development companies in small fifth-tier counties like Yangshi, and most of the development and construction was completed by local companies.

Small local development companies may have bank loans, but they will never be able to leverage to such a high level.

Leaders like Tang Hailin have not yet been baptized by large foreign real estate development companies and have no idea how much leverage can be added in real estate development.

Yeah, who would dare to think about it.

The largest real estate developer in the universe, with more than 3 billion in capital, leveraged 2 trillion in loans.

Before the industry collapsed, even people in the industry didn't dare to believe it.

So after listening to Luo Yang's explanation, the expressions of the leaders at the table were no longer surprise, but shock.

It turns out that real estate development can be played like this?

"For the first project to be developed, according to the current construction progress, pre-sales will start around 200-250 days after the land is acquired. According to the current market conditions, more than 7% of the houses can be sold in about 8-90 months, and many of them are sold out as soon as they are launched."

Luo Yang ignored their shock and continued after smoking a cigarette: "After the project funds are recovered, part of it will be used for project construction, part of it will be used to repay the loan, and the remaining large part will be used to continue to acquire land. The interval between the start of the second project and the first project is only about one or two months, and the subsequent opening of the project can be used to repay the loan."

"Sigh~~~"

Tang Hailin took a deep breath, and then couldn't help asking, "With your funds so tight, aren't you afraid of a break in the funding chain?"

"Afraid."

Luo Yang shrugged and said, "So when real estate companies encounter bad market conditions, some of them will go bankrupt if they can't bear it. That's how unfinished buildings come about. Of course, the way I just described used funds is quite extreme. Generally speaking, real estate companies won't go bankrupt so badly."

Some things can only be said briefly.

At present, the debt ratio of most real estate companies is still controlled at around 60% to 70%. Everyone is relatively rational. In a few years, the debt ratio will soar to 90%, 110%, and 130%. To put it nicely, it is called leverage, but in fact it is just robbing Peter to pay Paul.

This is not considered to be an ugly way of eating.

When the project payment is settled at the end of the year, the company uses commercial bills to relieve the financial pressure. Some even use commercial bills from their own banks, but the cashing time is delayed for a year or more. This is called extreme use of funds.
“No wonder a 5% interest rate can be offered for a 15 million yuan financing.”

Ji Jianzhang sighed: "As long as I have 300 to 500 million yuan in my hands, plus the borrowed money, I can do more than four or five projects in two years."

"Yes, under the current market conditions, the gross profit of a residential project will not be less than 25%. If there are four or five projects, the total profit will exceed 100%."

Shen Zhenxin also agreed: "Even if we remove the 30% financing interest cost for two years, there is still 70% gross profit left, which averages out to 35% per year. This is really a high return."

"It's not low, it's very high."

My uncle Luo Jianmin also sighed at this time.

"Xiao Luo, you wouldn't play like this, would you?"

The reason why I was shocked before was because I had never seen or heard of it.

But after Luo Yang explained it, the leaders present were able to discover the advantages and disadvantages of it.

The key point is that this drawback is quite extreme. If it results in an unfinished project, it will be difficult to clean up.

So Tang Hailin is quite concerned.

"Uncle Tang, I'm a local. I have so many businesses in my hometown that I can't run away."

Luo Yang replied with a smile: "Don't even think about robbing Peter to pay Paul. Even if the quality is not good, you will be criticized by your family members."

"Hahaha"

After hearing what Luo Yang said, Tang Hailin burst into laughter.

He picked up the wine cup and said, "Not only is it a poke in your spine, everyone knows that your father-in-law is Jiang Yuanshan, and even he can't escape in the future."

"Let me drink this glass of wine first to calm myself down." Luo Yang picked up the wine cup, lowered the rim of the cup an inch, clinked it with his cup, and drank it in one gulp.

"Uncle Tang, now that you mention it, I don't dare to engage in real estate development anymore."

After he put down the cup, he said, "I'd better stay in my physical manufacturing business. If I expand my business, the local government will still support me, fearing that I will move my headquarters. The investment in real estate is so huge, and even if I make money, I will only be praised. It's too boring."

Well, unless you are willing to leverage, expand the scale, and then form a dance troupe.

When Tang Hailin heard that Luo Yang was thinking of quitting, he quit.

"Xiao Luo, we still trust local entrepreneurs like you."

He thought the blow was too harsh, and quickly added: "Especially for a project like a commercial complex, it can bring thousands of jobs to the local area, which is no worse than a large-scale manufacturing company. Our government will definitely give the necessary benefits."

Just now, Luo Yang politely declined the residential development.

Because I couldn't refuse his favor, I mentioned the idea of ​​investing in building a commercial complex.

He was already hesitant, and if he put more pressure on him, this little fox, who was no worse than Lao Jiang, might take the opportunity to shrink back.

"Anyway, there is still a lot of preparation work to be done in the early stages, so let's just take it one step at a time."

Luo Yang responded with a smile: "I will definitely come up with a plan that I promised Uncle Tang just now. As for whether it will be implemented in the future, it will require the satisfaction of both the city and the investors. The negotiations here will not be completed in a short time."

"Anyway, take out the draft plan first."

Tang Hailin caught Luo Yang's tail and said, "As for the city, I will report to the leaders, especially Senior Official He. He is very concerned about improving the city's appearance. He will definitely be very interested in projects like the commercial complex."

He wasn't exaggerating.

As far as I can remember, the Wanda Plaza project in Yang City was introduced when senior official He was in office.

In order to get in touch with Wanda's top management, he is said to have used his own personal connections.

After saying this, Tang Hailin did not give Luo Yang a chance to refuse. He immediately winked and asked others to change the subject.

"Boss Luo, Boss Mao came to my office a few days ago for something, and he talked about you."

Shen Zhenxin of the Ministry of Land and Resources understood the leader's eyes immediately: "He smiled and said that he was deceived by your father-in-law to invest 200 million yuan in Shanghai, but he didn't even have a full dinner and had to go out for a midnight snack."

“It’s true that I’m not full.”

Luo Yang responded with a smile: "But it's not right to say that I was deceived by my father-in-law."

When he said this, he paused.

"Uncle Tang, Director Hong, Director Ji, Director Shen, Secretary Jiang, and Uncle."

After raising his glass and motioning to everyone, Luo Yang continued, "Just wait and see. By the end of the year, each of these bosses will invite my father-in-law to dinner. Please go and witness it!"

"Boss Luo, this is what you said!"

Shen Zhenxin immediately said: "When they invite your father-in-law, they must bring us along as witnesses."

The several bosses that Jiang Yuanshan brought to the Magic City are all well-known in Yang City. They may not be very familiar with Director Hong and Luo Jianmin, but they are very familiar with Tang Hailin, Ji Jianzhang and Shen Zhenxin.

"More than just witnessing."

Luo Yang finished the wine in his glass and said, "Just wait and see. They will pester my father-in-law and offer him money. I won't refuse to accept it!"

Except for Shen Zhenxin who knew a little about the situation, the others all looked confused.

"Old Shen, what's going on?"

Ji Jianzhang asked immediately.

Shen Zhenxin glanced at Luo Yang and seeing that he had no reaction, he repeated what he and Mr. Mao had said.

"Mr. Mao. Mao Shichang from Hongda Cable?"

Hong Ye, deputy director of the development zone, went over what Shen Zhenxin had just said in his mind, then looked at Luo Yang and asked, "Are you still doing financial investment in Shanghai?"

"Well, not only financial investment, I also invest in film, television and entertainment."

Luo Yang nodded and said, "The industry in the Magic City has better benefits and abundant cash flow. We can't just leave it in the bank and waste it, so we made some investments."

"So to say."

Hong Ye's focus is different from Shen Zhenxin's: "Does your investment in Yang City come from the profits in Magic City?"

"You could say that."

Luo Yang thought for a moment and said, "Half comes from Zhengyang Group, and half comes from Magic City. In fact, Zhengyang Group's early production site was also in Qiandeng, next to Magic City, so it's not wrong to say that the income comes from Magic City."

"There will be an autumn investment promotion conference in the city in the second half of the year."

Hong Ye was very interested and asked tentatively: "You have a lot of connections in Shanghai. Can you attract some bosses from Shanghai to invest in Yangshi Development Zone?"

Luo Yang: “.”

Wow, it’s posted already?

How can you tell that I have broad social connections?

"Director Hong, I'm only 22 years old. I don't have any connections."

Luo Yang would not be held back: "I have only started from scratch for three years, and during this period I spent half of my time in school. I have a few friends, but it is not for this reason that I have extensive connections. My father-in-law even introduced me to the Yang City Chamber of Commerce in the Magic City, just to let me make more friends."

Everyone at the table was shocked to find out that the boss who had just chatted with them was only 22 years old.

I just graduated from college last week.
"But I did hear that the city is planning to introduce an undergraduate college and has already visited a lot of people in Jinling."

Luo Yang not only wanted to get himself out of the situation, but also wanted to take advantage of the situation: "In fact, I think we can also organize some activities in Shanghai. We can contact the city and ask the Shanghai Yangshi Chamber of Commerce to help coordinate. We can hold a few liaison meetings in Shanghai. Now many universities want to take the one-stop route of production and research. We can use the power of Yangshi professors in Shanghai to introduce a few such projects to Yangshi. Maybe it is possible."

Eh?
Is this okay?

Hong Ye was a little confused. "The research is done in a university in Shanghai, and the funding is in the hands of a boss in Shanghai. Why would they bring the combined project to Yang City?"

"We've introduced graduate schools from universities in Yang City."

Luo Yang smiled and said, "It is impossible to have such a research-industry integration project at the undergraduate level. Our Yang City can talk to the universities in Shanghai and move some professional graduate schools to Yang City. Our city will provide funding and policies. If the research is moved here, won't the funding for combining research results come along?"

A word to awaken the dreamer.

Yes, it is difficult to introduce undergraduate colleges, so how about introducing one or two graduate schools first?
It can also introduce laboratories with research results and even attract funds to invest in these results.
Kill three birds with one stone.

This time, not only Director Hong, but also several leaders including Tang Hailin looked at Luo Yang with eyes that were truly amazed.

Is this young man really only 22 years old?
How does the brain grow?
(End of this chapter)