Chapter 101: Large Amount Repayment Tricks

At first, Lu Gan was apprehensive, fearing he wouldn't make it past his probation period. But then he realized it wasn't hard to justify spending money, and he could survive for a few more months. After a long trip to Europe, he finally understood why luxury properties abroad fetched such high prices. He was no longer so worried about his promised 5 billion yuan in sales.

When I return to China and look at my own projects, the average sales price of 50,000 yuan per square meter is really not expensive at all. The quality is completely comparable to that of foreign products, and the price is so low. If it were a discerning customer, it would not be a delusion for them to rush to buy it.

Lu Gan knew how to judge the customer's mentality. What he was hesitant about was whether the early repayment routine he had come up with could impress Mr. Lin.

When Lin Ruoyan persuaded Lu Gan to join the company, she did not say that the money must be returned before the pre-sale certificate was obtained, but the cost and time wait for no one.

The cost department had already calculated the cost according to the current design plan, plus the money spent on land purchase and marketing. If the project is really delivered with fine decoration, the cost investment per square meter will be about 10,000 yuan. The cost investment for a project of 100,000 square meters is 1 billion yuan. After deducting 80 million yuan for land purchase and 100 million yuan for marketing, more than 800 million yuan will have to be invested in the future.

Once this actuarial conclusion came out, it was impossible for Lin Ruoyan not to feel panic at all.

Fortunately, she figured she'd only live until the end of October, so she left the rest to fate. If she could sell a few houses, she'd have the money to build more. Housing prices were also rising, and the later she got, the more expensive the unit price would be.

Wait, a light bulb went off in Lin Ruoyan’s mind. Why should we wait for the pre-sale certificate to come out before selling the house?

During the era of the book, market regulation was not strict, especially in real estate sales. At the time, there were no restrictions on how many properties a Beijing resident could purchase, and even those without Beijing hukou could buy commercial real estate. Loans were easy to apply for, with down payments as low as 90% off. Even pre-sale property speculation was still a novel practice.

She looked at Lu Gan's increasingly thinning hair and felt a strange pang of heartache. This tool had previously helped her spend a lot of money and saved her a lot of trouble. Now she couldn't force him into a dead end. She had to show him a bright future.

She organized her words and described some of the unique selling methods used in later generations: "Fortunately, our luxury housing project only has a little over 200 units, so we don't need to sell them all immediately. We'll take it slow and steady. We'll sell a few units below the average price at the start, then raise the price every month. We'll also use hunger marketing."

Lu Gan had sold other goods before and knew some similar marketing techniques, but they were selling houses. Without a pre-sale certificate, could they really sell the goods by simply claiming they were worth tens of millions?

"If you get all the pre-sale certificates and put more than 200 sets on the counter for people to choose from, people will have a lot of choices and naturally won't be interested." Lin Ruoyan nodded.

Lu Gan seemed to be thinking about something.

Lin Ruoyan continued, "What if you think of housing as a commodity with investment value? You convince your target customers that the earlier they buy, the cheaper it is. The price will go up every month, and those who buy first can sell their home buying qualifications to those who come after them at a higher price. In a game of passing the parcel, those who enter early can profit from the price difference. Do you think anyone will participate? Just release five to ten home buying qualification plates each month—fewer is better, not more. This will make them feel that this is a rare opportunity."

Lu Gan trembled and said, "Isn't this just the pre-sale property over in Xiangjiang City?"

The so-called speculation in pre-sale properties refers to buyers paying only a small deposit to reserve one or more units before the property is completed, obtaining subscription qualifications, and then reselling this qualification to others to make a profit from the difference.

Speculating on pre-sale properties involves speculation in pre-sale properties, using small investments to generate large profits. During a rising market, people flock to buy properties, creating a major housing bubble. This tactic originated in Hong Kong, where a pre-sale system was in place, allowing properties to be sold as long as they met pre-sale requirements, rather than in ready-to-move-in condition.

Many cities in mainland China have also adopted the pre-sale system, allowing high-rise buildings to apply for pre-sale permits as soon as they reach the ground level or a few floors, without having to wait for the structure to be topped out. This is also intended to vigorously promote the development of the real estate industry, allowing companies to quickly recover funds and launch new projects.

Lin Ruoyan explained, "It can't be considered typical pre-sale property speculation. We can't overdo it. People in Beijing are watching us. We're using internal connections to subscribe to housing numbers, and we're providing benefits to employees. Assuming we successfully obtain the pre-sale permit by the end of November this year, it won't take too long before we can officially sign the purchase contract. We can only say we're skirting the rules by playing with the timing."

Lu Gan first learned how to sell properties in southern China. He was familiar with the situation in Hong Kong, but he was even more aware of the risks and dangers of pre-sale property speculation. The government would surely introduce policies to control such practices. What if they were "sanctioned"? The first bird to stick its head out gets hammered. He didn't dare mention this because of this concern.

His previous experiences of failure were often influenced by the shadow of policy sanctions.

Lin Ruoyan knew that it would take five years from now for the relevant departments in Beijing to realize the dangers and introduce strong policies to block the speculation of pre-sale properties.

But by then, they had already sold out over 200 units. Besides, they were skirting the rules, not really pre-sale properties, but serious properties with pre-sale permits, about to be released. They were lining up numbers a month or two in advance to build up internal customer base. Isn't that reasonable?

Furthermore, luxury homes are very expensive, costing 30,000 to 40,000 yuan per square meter. A typical central government-owned property can be resold to an individual for 40,000 to 50,000 yuan. No decent person would spend that much money on such a thing; they simply can't afford it.

Their own luxury housing projects are small in scale, and their potential for future appreciation is much higher than the broader market. As long as they promote them in a controlled manner within wealthy circles, without exposing them to public attention and causing jealousy among those who can't afford them, they can still operate.

As for the target customer reserve, Lu Gan already has a list of more than 300 people, and these are only domestic target customers.

Their luxury residential land isn't near military control zones or sensitive areas, and they long ago applied for permission to sell to foreigners. If they're successful, their real estate company can secure early payment, alleviating the pressure of project funding. And the Chinese who played along profitably, then sell the properties to foreign buyers without feeling any guilt.

After Lin Ruoyan's explanation, the worries and anxieties in the hearts of everyone present were reduced.

When it comes to sales, Lü Gan knows the ropes best. The sales approaches for 2,000 basic housing units and over 200 luxury homes of the same floor area are naturally different. There's a similar project in Shanghai, selling unit numbers. This wasn't Lü Gan's own experience; it's accurate information he received from industry insiders.

That Shanghai project was a suburban villa with an initial price of around 8,000 yuan. Some hype was used, and insiders and interested people paid deposits in the first round to buy building numbers. In less than half a year, after the project was completed, the average price rose to 13,000 yuan. The people who participated in the project made a lot of money, and the developer also received a large sum of money in advance to maintain the consumption during the construction process.

These deposits are real money, and there is no interest, which is much more cost-effective than taking out a bank loan. After all, their project is aimed at sales, not just digging a hole and not covering it.