Siheyuan's Journey Through the Ages

Chapter 131: Investing against the trend

Liang Haowen sat at the other end of the desk, frowned and asked: "You mean investing in real estate now? Look at what's written in this newspaper."

Liang Haowen handed the newspaper in his hand to Ma Qing. The article published in the Sing Tao Daily in August 1967 read, "It is believed that Hong Kong has no way out and millions of residents are confused."

The poll showed that based on an in-depth survey of more than 18000 households, nearly 25% of residents said they would immigrate elsewhere if they had a choice.

Therefore, it is estimated that about 100 million residents intend to leave Hong Kong. Racial discrimination and unfair policies and measures against people of color by white people have become the most criticized issues by the people.

Another page reported that a labor dispute had occurred at the Li family's Xiangjiang Artificial Flower Factory branch on Tai Yau Street in San Po Kong.

The factory issued extremely strict regulations, including not paying wages to workers who damaged production machines and not allowing workers to take leave. The negotiations between labor and management failed, and on April 4, the factory fired 28 workers, including labor representatives, on the grounds of "business contraction" and closed the injection molding machine department of the branch factory... causing social unrest, etc.

Liang Haowen waited for Ma Qing to finish reading the report, and then said, "You said that at this time, we should enter the real estate industry, you..."

"Brother Liang, you don't think I'm crazy, do you? I won't say any more big truths. The current real estate prices have dropped by 5% compared to the previous two years. That's enough.

In fact, we can think of it this way: either we leave Hong Kong, or we invest in Hong Kong at this time.”

Ma Qing finished speaking and added: "Are you going to emigrate from Hong Kong? I don't think you will leave. Another interesting fact is that although house prices have fallen, the decline in rents has not kept up with the decline in house prices. What does this mean? It means that house prices have fallen too much. If we don't buy now, when will we buy?"

Liang Haowen was silent, tapping the pen on the table. After a while, he said, "Okay, Mr. Ma, most of my wealth now is earned from you anyway. It doesn't matter if we do it again. At most, it will be in vain. Tell me, what should we do?"

Ma Qingzao had anticipated this result. Liang Haowen could basically be said to be his fanboy now, so convincing him to invest was a piece of cake.

"I plan to invest 50 yuan and set up a Rongheng Real Estate Company with you, with the main business of acquiring street-front shops in Kowloon and the island."

Ma Qing picked out the name right away. He didn't want Liang Haowen to pick the name again. "Just put the office in your law firm for now. It's just some shop space for sale and rental anyway."

"It seems that Mr. Ma has made a fortune in the U.S. stock market. He is so rich. I will also invest 50 yuan, and the rules remain the same, and there is still a nuclear bomb clause." Liang Haowen was straightforward, "I now find that the nuclear bomb clause is very useful when two people invest."

"...The nuclear bomb clause is not acceptable. It needs to be changed to a shackle clause. If one person disagrees, the purchase cannot be made. After the company purchases the shop, my chain supermarket happens to rent it to open a store, so I cannot sell the property easily." Ma Qing said.

"...Okay, you have the final say. Does this supermarket accept investments?" It seems that Liang Haowen has made a lot of money in the U.S. stock market in the past two years.

"The supermarket chain will only accept a 20 percent stake at most. I have my own ideas. Anyway, my supermarket plans to rent the shop at the market price. If Brother Liang thinks it is unreasonable for the supermarket to rent the shop from a property company, then just pretend I didn't say anything about it," Ma Qing explained.

The main reason why Ma Qing sought cooperation with Liang Haowen again was actually to save costs. A real estate company like Ma Qing mainly deals with legal documents and other aspects.

In the following days, the two had a clear division of labor. Ma Qing went to sweep the streets to find the shops that Ma Qing thought were good. After a brief discussion with the shop owner, he passed the work to Liang Haowen, who took care of all the subsequent matters. The two also had a tacit understanding. Ma Qing did not talk about his salary, and Liang Haowen did not mention the legal service fees he provided. In short, the company's capital of 100 million was completely transformed from cash to fixed assets within three months.

"Congratulations to Mr. Liang for becoming a true landlord."

"Congratulations to Ma Sheng for becoming a true landlord."

In Liang Haowen's law firm, Ma Qing and Liang Haowen said this in unison as they clinked glasses, and then they both laughed.

"Ma Qing, we have acquired approximately 700 square meters of commercial space at an average price of 1500 yuan, including 32 shops located in Kowloon and the main island. In addition to the existing leases, there are 7 vacant shops. Do you plan to use all of them to open a supermarket?" Liang Haowen asked.

"Yes, I have only opened three more Baixin Supermarkets in the past two years, and now there are five in total. Now that I have the funds in place, I plan to open seven stores at once. I'll let Lao Huang be in charge first. If he can do it, he will be the general manager. If not, he can only be a store manager." Ma Qing felt that Lao Huang had been a bit slack since he got married, which was not acceptable.

"In addition, I plan to put out 8 yuan in advance. Brother Liang, if you are interested, I will accept your 2 yuan to invest together and officially register and establish Baixin Chain Supermarket Co., Ltd."

"I'd better offer 4. After all, Baixin Supermarket already has 5 stores, so this part still needs to be discounted. I can't take advantage of you. Only in this way can the business last long." Liang Haowen thought about it and expressed his thoughts.

Ma Qing nodded secretly. Liang Haowen was not bad. He was clear about what he was doing and was a mature business partner.

"Okay, it's a deal. Of course, I'll need Brother Liang's help with the legal matters. You have to charge a service fee this time, otherwise I'll be really embarrassed."

"It's a word."

Next, the two giants made a complex plan for the real estate company's next operation. Specifically, they would use the properties on hand to take out loans and purchase properties again. According to Ma Qing, the debt ratio must be at least raised to 60% to be cost-effective. With the current real estate prices, when will you take advantage of it?

"60%, Ma Qing, isn't this debt ratio a bit too high?" Liang Haowen was a little worried.

Ma Qing took out a pen and paper from the table and handed it to Liang Haowen. "Brother Liang, it's useless for me to say anything. You can calculate it yourself. Can the monthly rent cover the monthly interest? As long as it can, then there is nothing to worry about."

Ma Qing looked at Liang Haowen, took a pen and paper and did some calculations on the table, and said, "Don't worry, I still have some money. Even if there is a problem, I will cover it."

Liang Haowen finished the calculation and saw that it was true, so he joked: "Okay, since you said so, I believe you. Anyway, Mr. Ma, you still have a building."

Ma Qing nodded with satisfaction. One of the important reasons why he was willing to jointly invest in this real estate company with Liang Haowen was that it would be easier to obtain high-value loans by taking advantage of the Liang family's good social reputation and status.

(End of this chapter)