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

Chapter 698 Making the Deal
Jin Chenyang had made thorough preparations before coming to Shanghai to meet Fu Bin.

While not foolproof, it's at least a shoo-in.

He hadn't expected that someone would join the meeting. After being introduced, he learned that this young man named Luo Yang was also from Yangshi.

After shaking hands, everyone sat down and began exchanging pleasantries.

"Mr. Jin, you and my dad should actually know each other."

"Oh?"

Jin Chenyang asked with a smile, "Who is President Luo's father?"

Luo Yang smiled and said to Jin Chenyang, "Luo Jianguo of Guoyang Construction."

"Guoyang Construction, Luo Jianguo. Is he the older brother of Director Luo of the Housing and Construction Bureau?"

Luo Jianmin is now the head of the Housing and Urban-Rural Development Zone Branch, so Jin Chenyang's title is not wrong.

That's how it is in small towns; you don't need to go through many roundabout ways, you can strike up a conversation and become acquainted with people in just a few words.

With this connection established, the atmosphere in Fu Bin's office improved significantly.

After the opening remarks, Luo Yang went into hiding, letting Fu Bin and Jin Chenyang talk about serious matters.

"Mr. Fu, the main reason I came to see you today is to discuss the land for the second phase of the Shuangfeng Town Industrial Pilot Park."

Jin Chenyang got straight to the point: "Although the pilot park is located in Shuangfeng Town, the town's fiscal revenue hasn't increased much in the two years since the project started. So, we recently applied to the city for land use quotas, hoping to improve the town's fiscal situation with the help of the second phase of the pilot park project."

His words were an explanation to Fu Bin of the underlying logic behind the demolition and development project.

In short: the town had a need, and the city agreed.

Of course, some things weren't said, but everyone knew that Jin Chenyang was the one who pushed this forward.

"So what are Mr. Jin's needs?"

Fu Bin said with a smile, "Don't be fooled by the fact that Guotai is in charge of the pilot park project. We've only contributed some money and are doing the work of cleaning up inefficiently used land on behalf of the city. The final profits will be distributed according to the agreement, so the city and the land department are the ones who really have the final say."

That's how the old fox talks; he doesn't care about the details and first shrouds everything in mystery.

Whoever is mistaken will be the one to admit defeat.

"Yes, we originally planned to bid for the land we wanted directly from the primary market, but when we contacted the land and resources department, we learned that the land appraisal process was still in the hands of Mr. Fu's Guotai Real Estate, so we had to come and talk to you."

Jin Chenyang is a latecomer to the field; before starting his real estate development company, he worked in a construction company, so he may not know the tricks of the trade.

The fact that I can explain this so clearly now must be because I received guidance from insiders in the land and resources department.

When land is auctioned or tendered, there is a starting price. How is this price determined?

First, a qualified appraisal department needs to assess the land value and provide a basic unit price. Second, the local government then refers to the land prices in the surrounding area and finally gives a relatively appropriate price, which is the starting price of the land auction.

When it comes to assessment, there are quite a few sub-items involved.

For example, the cost of land acquisition, the planning indicators of the land (indicators such as building density and greening rate can determine the comfort and quality of buildings on a piece of land), and the cost of supporting facilities construction around the land.
Jin Chenyang sought out Fu Bin to discuss the matter because it involved costs such as land acquisition and the sharing of costs for surrounding infrastructure development.

The amount of cost that Cathay allocates to each piece of land directly determines the starting price of that land.

Assuming Jin Chenyang hadn't approached Fu Bin and had instead directly designated the location of his desired resettlement community through the land and planning departments, Guotai would have been fully capable of significantly increasing the cost of that land.

I wouldn't dare say much, since land prices in Shuangfeng Town aren't high to begin with, but it shouldn't be too difficult to average out an extra 300 to 500 per square meter.

Remember, this is still the cost of the land.

If the plot ratio is taken into account, the cost will be multiplied by the plot ratio coefficient on the basis of multiple amortization. For example, if the planning department sets the plot ratio of the plot at 1.5, then for Jinyang Real Estate, which acquired the land, the cost per square meter of housing will increase by 450 to 750 for no reason.

What is this concept?
In 2012, how much did commercial housing cost per square meter in Shuangfeng Town?

Even in newly built resettlement communities, the price per unit will not exceed 2000 at most.

"Mr. Jin, we specialize in primary land consolidation."

Fu Bin, holding the initiative, complained, "The initial investment alone amounted to several hundred million yuan, all of which was raised through financing. Mr. Jin is also in this business, so he must know how high the cost of capital is. The company's profits depend entirely on the results of land auctions. The higher the price, the more money we and the city make. If the price is low, we might lose money."

What he said makes perfect sense.

The higher the price of the land that Guotai sorted out, the more money they and the city would ultimately receive.

It's not like we can just come over and say what we want, and then give him a smaller share of the costs, allowing him to get the land at a lower price.

Why?
"We know that."

Jin Chenyang came prepared: "So we will definitely consider compensating President Fu for his losses, such as directly awarding the general contracting project of the resettlement community to Guotai. What do you think, President Fu?"

He paused at this point, then added a sentence.

"Oh right, I forgot to tell Mr. Fu earlier that the total construction area of ​​this resettlement community is about 15 square meters."

After hearing the conditions offered, Fu Bin revealed an expression that said, "I knew it."

It doesn't matter who the general contractor is, they'll still do the work, and that part of the money will definitely go to someone else. So, giving up the general contracting project to compensate Fu Bin is not a loss for Jinyang Real Estate.

Of course, there is another form of compensation.

That means they're jointly developing this project with Cathay Pacific, but that would really be taking a slice of Jinyang Real Estate's pie.

For an old fox like Fu Bin, Jin Chenyang's offering of such a small amount was far from enough to satisfy him.

"Mr. Jin, Guotai has recently invested in new industrial park development projects in Hefei, Jiangcheng, and Greentown, and we don't even have enough construction teams on hand. Where would we find the manpower to take on a 15-square-meter residential construction project?"

Fu Bin put it very tactfully.

What's the problem with not having enough teams? Just hire more people, right?

This polite refusal was a ploy to get Jinyang Real Estate to increase its investment.

"Mr. Fu, in addition to the resettlement community, we also have another community construction project in the town, which is about 22 square meters and will be built in three phases."

Jin Chenyang wasn't embarrassed or annoyed. He smiled and said, "The two sides together cover about 37 square meters. This scale of construction will take three to five years to complete. President Fu can set up a permanent construction branch in Shuangfeng Town, and at the same time, train a group of managers for Guotai."

He would rather give up the two general contracting contracts than share the profits from the development project.

Fu Bin smoked a cigarette, not immediately expressing his opinion.

This indicates that he is also weighing the options.

"President Fu, President Jin, actually I have a solution that satisfies both parties."

Just as the negotiations reached a brief stalemate, Luo Yang spoke up with a smile: "We can prevent President Jin from taking a loss while still allowing President Fu to have some leftovers."

As soon as he opened his mouth, Fu Bin's eyes lit up.

Because this feeling is so familiar.

Countless times in the past, when projects were stuck in a stalemate, Luo Yang would offer a suggestion that would immediately resolve the stalemate and create a win-win or even multi-win situation.

"Brother Luo, we're all waiting for your guidance!"

Fu Bin laughed and said, "If you don't say anything, I'll think you're here to freeload tea."

While the two were chatting and laughing, Jin Chenyang, who was standing to the side, was extremely surprised.

Since we were introduced when we first met, and Luo Yang is a businessman, what kind of solution can he offer that satisfies both parties?

So he looked at Luo Yang with curiosity.

"Has Mr. Jin's development project been drafted yet?" After talking with Fu Bin, Luo Yang turned to Jin Chenyang: "I'm referring to the development project in the town."

"We've already done two drafts, but they're just paper simulations because many houses in that area haven't been demolished yet, so we can't do any geological surveys or anything like that."

Seeing that Fu Bin was also looking at him, Jin Chenyang spoke frankly: "We don't know if the current planned plot ratio of 1.8 will be feasible. After all, building high-rises depends on the geological conditions. If the cost is too high, we'll have to lower the plot ratio and build mid-rise buildings instead. (Buildings of 9-11 stories are called mid-rise buildings, and 6-story buildings are called garden apartments.)"

What is the area it occupies?

"About 180 mu."

Jin Chenyang had been to the site and seen satellite images of the land and resources department, so he was very familiar with the area: "The core area consists of old houses in the town, with a demolition area of ​​about 80 mu (approximately 5.3 hectares). To the west of the site are private farmland, an abandoned brick kiln, and several rows of chicken sheds."

Does the land parcel's boundary extend to the Quliu River?

The Quliu River that Luo Yang mentioned is a river that flows through the edge of Shuangfeng Town. It is more than ten meters wide, and because it is flowing water, the water quality is relatively good.

In his memory, the area that Shuangfeng Town expanded westward was this river.

Later, the town built a river embankment on the east side of the river and created a riverside park.

"Not to Quliu River."

Jin Chenyang was stunned as soon as he finished answering.

"Mr. Luo, you seem to know Shuangfeng Town very well."

“My hometown is Shuangfeng Town, and my maternal grandfather’s family lives in the town.”

Luo Yang responded with a smile, "I was the one who introduced the Shuangfeng Town Industrial Park pilot project, so I am very familiar with that place."

After listening, Jin Chenyang's expression became extremely strange.

"Hahaha"

Seeing this scene, Fu Bin couldn't help but burst into laughter.

He laughed as he said, "Mr. Jin, I'm afraid you don't know this, but my brother Luo's father-in-law is also a big boss in your Yang City!"

Luo Jianguo was the vice president of Guotai. Fu Bin often communicated with him and learned who Luo Yang's father-in-law was during their conversations.

"A big boss from Yang City?"

Jin Chenyang glanced at Fu Bin, then at Luo Yang, his eyes darting around as several names flashed through his mind.

"Mr. Jin should know Jiang Yuanshan, right?"

"what?"

Jin Chenyang's eyes widened immediately: "President Luo, is President Jiang of Yuanfan Group your father-in-law?"

Gee.
Luo Yang glanced helplessly at Fu Bin before replying to Jin Chenyang, "He's my future father-in-law. My daughter and I are only engaged; we're not officially married yet."

"Mr. Luo is too modest. There's no difference between your engagement and marriage."

Jin Chenyang's tone became much more enthusiastic when he spoke to Luo Yang: "I didn't expect to run into President Jiang's son-in-law here today. When we get back to Yang City, we'll definitely find an opportunity to get together with him."

One is in manufacturing, the other in real estate; Luo Yang didn't think he and Jiang Yuanshan were that close.

That was probably just a polite remark.

"Sure, let's get together sometime."

Luo Yang gave a perfunctory answer, then steered the conversation back on track: "If that's the case, when Mr. Jin applies for land quotas from the city this time, he should apply for about 20 mu more, located west of the plot Mr. Jin intends to use. Mr. Fu's side will provide the funding and develop this land. What does Mr. Jin think of this plan?"

As soon as the plan was presented, Jin Chenyang and Fu Bin fell into deep thought.

For Jin Chenyang, there was no loss, because he originally planned to take 180 mu of land, and Luo Yang's proposal had already stated that the money for the extra 20 mu of land would be paid by Fu Bin, and the other party would also be responsible for the development.

The only concern is whether there are any other pitfalls in this plan.

This plan was a bit puzzling for Fu Bin.

His Sante Real Estate is unwilling to even venture outside of Shanghai. It was only after Luo Yang mentioned the future price depression that they began to consider acquiring land and developing in several fourth- and fifth-tier cities surrounding Shanghai.

Now Luo Yang suddenly proposes to acquire 20 mu of land in a town under Yangshi. What kind of approach is this?
He was a little confused for a moment.

When she looked up at Luo Yang, she met his eyes and his smile.

Although he didn't know why, Fu Bin decided to trust his intuition and past experience and agree to it first.

Jin Chenyang took a few minutes to think.

After thinking it over, he couldn't find any traps in it, so he looked up at Luo Yang and said, "I think there's nothing wrong with this plan. It all depends on what President Fu thinks."

"I still trust Brother Luo more."

Fu Bin shrugged and said, "If President Jin thinks it's okay, I think it's okay too."

"Then what about the general contractor?"

Jin Chenyang pulled out the previous proposal: "President Fu, do you still intend to take it all?"

"Let's get the general contracting project for the resettlement community."

Fu Bin thought for a moment and said, "Your residential project is divided into three phases, which takes too long. Besides, Guotai's main business is industrial real estate, so there's no need to put the cart before the horse."

"Okay, that's settled."

Jin Chenyang also pretended to be generous and said, "Anyway, since we are cooperating, once the project is up and running, if President Fu wants to participate in the general contracting bidding, he is welcome to do so as well."

That's how it is among big bosses.

Once the general direction is agreed upon, a decision can be made in just a few words.

As for the issue of land cost sharing, there's no need to elaborate further. For the plots acquired by Jinyang Real Estate, Guotai will definitely share the costs at a low cost, ensuring that the starting price for the land auction is kept to a minimum.

The morning passed quickly.

The two sides had a pleasant conversation, and at noon they found a high-end restaurant in Songjiang city and had a casual meal together, and also had some drinks.

The subsequent work was naturally handled by his subordinates. After having lunch, Jin Chenyang left Shanghai and returned to Yang City.

Luo Yang then followed Fu Bin back to the headquarters of Santai Real Estate.

The two brewed a pot of tea at the tea table, lit a cigarette, and started chatting.

“Brother Luo, I couldn’t ask about the 20 mu (unit of land area) before because General Manager Jin was there.”

It wasn't that Fu Bin was eager to know how much benefit he could get; his question was more out of curiosity.

"After acquiring this land, we will develop it ourselves and build villas."

Luo Yang smiled and said, "Let's get the plan approved first. Don't rush to build. Just like Jin Chenyang's project, we'll build it in three phases."

"Building villas on 20 acres of land, and in installments."

Fu Bin was completely outmaneuvered by Luo Yang.

On 20 acres of land, which is 13340 square meters, if you want to build a villa, although the plot ratio marked in the plan will be 1.0, in reality, it would be considered good if the plot ratio can reach 0.5.

With this plot ratio, and based on each unit being over 300 square meters (if the property certificate area of ​​a villa is over 300 square meters, the actual usable area is often over 500 square meters), there would only be about 20 units.

What the heck is installment payments?

(End of this chapter)