Bloody Romance: I, the big troublemaker, Zhong Yuemin!

"Hong Kong Island's current housing prices range from tens of thousands to hundreds of thousands, or even millions. Working-class people simply can't afford such a large sum of money all at once. But housing is a necessity, and we have to buy it. So, they've thoughtfully arranged an installment plan, where you pay a down payment of 20%, 30%, etc. of the total price. This down payment is like working capital. They've even provided us with a sample plan, so just follow their lead. Isn't that enough?"

Zhu Long said:

"Brother Zhong, if this were really possible, the building could be completed quickly and the bank loan could be repaid immediately."

“Why pay back the bank loan? Don’t you know that those who owe money are the bosses?” Zhong Yuemin said:

"If you owe the bank a few thousand or tens of thousands, they might come to your door to collect the debt, sue you, or threaten you with repayment. But if you owe millions or tens of millions, they absolutely won't do that. On the contrary, they'll call you every now and then to ask how your company's building is going and how your health is. They'll be as concerned about you as if you were their grandson. Why? Because they're afraid your company will go bankrupt, or that you'll commit suicide because of depression. Then the bank will lose all the money it lent you."

Several people looked at each other in surprise. Is there such a bold move?

Wu San interrupted.

"Yuemin, we have so much liquid capital in our hands. What are we going to do with it if we don't repay the loan?"

"Buy land!"

Zhong Yuemin said:

"Then we can mortgage it to the bank for a loan, continue to build and sell buildings, and repeat the cycle. Only in this way can we quickly grow this small snowball into a giant in a short period of time."

Zhou Changlidao:

"Brother Zhong, your method also has a fatal problem, which is whether we can borrow money from the bank and quickly recover the funds. If something goes wrong in this link, then... that would be an avalanche, which would be disastrous for our company. In the end, the house would be left unfinished and we would still owe the bank a lot of debt."

"Chang Li, great! You've pinpointed the key to the problem!"

He copied Hengtai's "winning formula" from Xu. What did Xu rely on to start from scratch? High debt and high leverage, this so-called high capital turnover rate. This was his legalist secret. In less than 20 years, he went from a small, unknown real estate company to a real estate giant and a Fortune 500 company. It's not just talk, it's walking. How could Xu, without some skills, accomplish such a huge business?

It can only be said that the winner is the king and the loser is the bandit. If you win, you can climb the city gate tower, and if you lose, you can squat on the fence.

That's it!

During this process, you will find that as long as you can borrow money and recover the funds, you can quickly develop real estate projects one after another. The bottleneck that hinders the development of this enterprise is whether you can quickly recover the funds and whether you can borrow money. The most important point here is that housing prices must continue to rise, they must maintain their value and be sellable!

Lao Xu is just too greedy.

In fact, in 2006 and 2007, they were planning to go public in Hong Kong Island. They bought 33 projects at once and also built up millions of acres of land reserves. However, they ran out of money at that time. It happened that the global financial crisis hit at that time. The real estate industry suddenly entered a cyclical downturn. In addition, in 07 and 08, the real estate projects in our country experienced the first cyclical downturn since the reform and opening up. Hengtai almost collapsed.

Lao Xu went to see Lao Wang from Vanke but failed to borrow money. Finally, he went to Hong Kong Island and played cards with the Zheng family, one of the four major families and the owner of Chow Tai Fook, for three months. In the end, the Zheng family invested US$5 million in Hengtai. In addition, our country later announced a 4 trillion stimulus plan, and the housing market became prosperous again.