Chapter 25 Project Positioning
Lin Ruoyan's plan to buy this piece of land wasn't to make up for the regrets of the Lin family in the original book, or to antagonize Fang Yue. In fact, Fang Yue, a strong woman, had a good reputation in the industry, having built many high-quality and affordable houses for the emerging middle class.
However, in order to survive, Lin Ruoyan had to buy a piece of land as soon as possible, spend the 100 million yuan this month quickly, and create sufficient reasons to spend money like water in the next few months.
According to the information she had learned, the other plots wouldn't start filming until next month. While others might be able to wait, she couldn't! Besides, she was quite familiar with the land in this particular plot. If she could just follow the original plot and move forward with the project, she could at least fool the authorities and her brother.
Wait, why would we copy the original? Wouldn’t that save us money?
In the original book, Fang Yue bid 20 million yuan above the reserve price for the land, spending a total of 60 million yuan. To save on subsequent costs, she directly applied proven concepts from previous southern projects to the proposed apartment layouts and building facade designs. She hired a local Beijing design institute to make simple modifications and then produced the construction drawings, spending around 2 million yuan in design fees.
The sales team is not her own. She hired a sales company from Beijing. The sales company has to bear the initial sales costs and also bear the risk of losing money if the products cannot be sold.
Because this was a basic housing project, the building was delivered in bare form, with the exterior painted. The neighborhood was paved with cheap bricks and planted with slender trees. Whether the grass seeds would grow next year was another matter. The entire construction, from the moment the pit was dug, was financed by the construction company, so the real estate company didn't spend a cent.
Apart from spending 30 million yuan in cash to buy the land, Fang Yue borrowed the rest of the money from the bank. The construction and sales had to be funded by the corresponding partners themselves. It can be said to be a typical example of making money out of nothing.
In the end, the finances were rolling in, and a significant number of units had already sold before the building was even built, earning a portion of the proceeds. After all this, Fang Yue's initial investment was only 30 million yuan, and two years later, the project was sold out and liquidated, netting her a profit of 300 million yuan. Had she not used a large portion of the sales proceeds to repay bank loans and settle various partner expenses, she would have earned even more.
Fang Yue's strategy is a classic example of a quick in-and-out strategy for housing projects catering to basic needs. This strategy can be further shortened. In southern areas where construction doesn't need to be halted during the winter, it can even take just eight months from the initial land acquisition to the actual sale. By leveraging banks and leverage, Fang Yue's investment of capital is minimal and can be rapidly turned over, leading to a snowball effect. There's no need to wait for the houses to be completed; as soon as the sales are ready and the proceeds are received, the money can be invested in the next project.
If Lin Ruoyan had the money and resources to open a real estate company in real life, she would definitely choose a model like Fang Yue's. Beijing is full of customers with urgent needs, and there's never a shortage of them. With low investment costs, there's no need to pursue high prices; the goal is to sell quickly. It might take some time to build up a customer base, but once the market opens, everything sells out within a day or two.
Unfortunately, she was now bound to this wasteful system in the book. Buying land was to solve the problem of investing 100 million yuan rationally, legally and stably every month in the future.
According to Fang Yue's strategy, she could make money in a year, but how could she spend so much money in the first eight months? If she couldn't spend 800 million, she would be dead, so how could she expect to make money later?
If she were to use a similar approach and start more projects, she wouldn't have the energy to manage them all. After much thought, she decided that she should focus on this one project and resolve all her urgent needs.
First, the land had to be auctioned, no matter how expensive it was. In the original book, Fang Yue had bought the land for 60 million yuan, and Lin Ruoyan planned to buy it for 80 million or even 100 million yuan. Such a big expense as the land auction could meet a month's target in one go.
Lin Ruoyan no longer planned to build a property for basic needs. The rising land prices had increased her investment costs, and she couldn't sell it at a loss. Considering the land's inherent qualities, she could create a high-end property. This would at least increase the initial investment costs infinitely. The property would be ready in eight months, and she could then sell it gradually. With luck, she might even be able to survive for another two months.
She didn't care about small, unfinished houses or those frugal cost-saving tactics of building at the maximum floor area ratio. She didn't seek speed, only price, and would start selling when the construction was almost complete.
In short, she wanted to go against the trend of fast-selling, just-in-time properties. After all, Beijing's housing prices were going to keep getting more expensive. Right now, 30,000 yuan per square meter was considered luxury, but in the future, 30,000 yuan per square meter wouldn't even be enough to buy a home outside the Sixth Ring Road. So, what did the Fourth Ring Road matter? For this project, she wanted to create a large, fully furnished apartment, looking for the most expensive options, starting with consulting and design.
If domestic consulting firms and design institutes charge low fees, then find a well-known foreign consulting firm or design firm that charges more to do the planning and proposal. Then find the top domestic design institute and sign a stable, long-term cooperation contract to produce the construction drawings.
She may not know more about how to save money than Fang Yue, but she has seen many negative examples of people wasting money, so she can do it easily without anyone teaching her.
This meticulously planned plan for a lavish future spending spree immediately impressed the Prodigal System, praising it profusely: "As expected of a host, you have a grand vision! Buying the land cost a fortune, and before that, buying a courtyard house to start a company, renovating and hiring staff, etc., we'll almost have 100 million this month. With the future projects running and the company's various expenses, spending like water is just around the corner."
Lin Ruoyan said, "Of course. We've also identified the consulting firms, design firms, and construction firms. A 30% deposit will be paid immediately after the contract is signed. A preliminary calculation shows we have a reasonable way to spend money in the next few months."
After Lin Ruoyan finished boasting, she, due to her professional knowledge of real estate, calmed down and carefully calculated the approximate cost of these projects. This month, she could spend about 100 million yuan, and the subsequent cost investment would gradually increase to 300 to 500 million yuan. After all, her imagination was a little exhausted when it came to the 100 million yuan unit.
So, it's worth checking out consulting firms and the world-renowned luxury homes that sell for 100 million yuan each. To be able to sell something so expensive, the cost investment must be high. If she buys something based on the same model, she'll definitely be able to meet her expected cost.
The positioning of the project is just this: high-end large-sized luxury houses!
She had initially ambitiously considered calculating in her head whether this positioning could cover her eight-month lifecycle, with a monthly expenditure of 100 million yuan. But then she thought, why bother calculating on her own? She could just hire someone else and let the cost and design departments handle the task for her. Not having to do anything herself—that's what a boss should do.
She only needs to select the data provided by her subordinates, find the one that meets her monthly spending needs, and make the final decision.
If a real estate company isn't enough to cover 100 million yuan in monthly expenses, then there are other flexible options. For example, acquiring a film company to invest in production would likely generate revenue quickly. However, she doesn't understand the film industry. Can a movie be made in three to five months? How long will it take to get paid after the film's release? If she's considering this, she might need to consult industry insiders for details.
Or maybe invest in a mobile phone? Wu Chenghao pushed away the handsome guy Wei Xu that popped into her mind, and the two tools were fighting.
In reality, like movies and TV shows, she only saw the surface of the mobile phone industry and jumped in without knowing anything. She expected to lose money the moment she started, and she didn't have the courage to try anything rash. After careful consideration, in order to survive eight months of extravagant and lavish life, she decided to stick to the routine she was familiar with.
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