socalfunplaces Chapter 149 Sun's Real Estate
Chapter 149 Sun's Real Estate
Nine o'clock in the morning, coffee shop at the Mandarin Oriental, Hong Kong.
Sun Guofu had already arrived. He was wearing a dark blue suit, his hair was neatly combed, and there was a cup of Pu'er tea in front of him. When he saw Ling Yun enter, he stood up and shook hands.
"Mr. Ling, it's been a long time."
"Uncle Sun, you're too kind. Just call me Lingyun." Lingyun sat down.
Sun Guofu is Sun Peng's father. He has been engaged in real estate development in Shandong for more than ten years and has started to expand into other provinces in recent years. Last year, when Sun Peng and Lingyun started an internet cafe, Sun Guofu provided a lot of support behind the scenes.
"Pengzi called me a few days ago and said that your project in Thailand has been suspended," Sun Guofu said bluntly.
"It's stopped." Ling Yun ordered a coffee. "The Thai baht collapsed, the funding chain broke, and the construction site stopped too."
"But the land is still there."
"The land is still there." Ling Yun nodded. "Latchada District, 120 mu, clear property rights, and complete procedures."
Sun Guofu took a report out of his briefcase.
"I had an assessment done. That piece of land, at current market prices, is worth about 80 million US dollars. But given the current situation in Thailand... the actual selling price might only be 50 million."
"You want to take over?" Ling Yun asked directly.
"That's right." Sun Guofu didn't beat around the bush. "Our Sun's Real Estate wants to enter the Southeast Asian market. Although Thailand is in chaos now, in the long run, its location, population, and development potential are all there. Now is a good time to buy at the bottom."
"Buying the dip?" Ling Yun smiled. "Uncle Sun, the Thai baht may fall further, and the economy will be in recession for at least three years. Going in now is not buying the dip, it's catching a falling knife."
"I know the risks," Sun Guofu said, taking a sip of tea. "But real estate is viewed over ten or twenty years, and Thailand will eventually recover. Moreover, the Digital City project itself has a concept, government approvals, and a foundation for pre-sales. After we take over, we can adjust its positioning and develop it into a mid-to-high-end commercial complex."
Ling Yun didn't speak.
Sun Guofu continued, "I heard from Pengzi that you've invested a lot of money in this project. Now that it's stalled, you're losing money every day. If you transfer it to us, you can recoup your investment, and we can enter the Thai market at a lower price—a win-win situation."
"How much are you planning to offer?" Ling Yun asked.
"Thirty million US dollars," Sun Guofu said. "Cash, paid in one lump sum."
Ling Yun shook his head.
"That's too low. The land alone is worth fifty million."
"That was the normal market price," Sun Guofu said. "This isn't the normal market now. The Thai banking system is on the verge of collapse, and foreign capital is withdrawing. No one but us will take over this deal."
"But I can choose not to sell," Ling Yun said. "I'll leave the land there and wait a few years before making a decision."
"What about your cost of capital in a few years?" Sun Guofu looked at him. "Thirty million US dollars, at an annualized rate of 10%, that's nine million in three years. Moreover, the political situation in Thailand is unstable. If the policies change, the land might be reclaimed or taxes increased, which would be even riskier."
The two remained silent for a while.
The waiter brought over the coffee, and Lingyun added a piece of sugar and stirred it slowly.
"Forty million," he said. "US dollars in cash. In addition, the pre-sale contract will be transferred as well, and the pre-sale payment will be transferred at the Thai baht price stipulated in the contract. You will be responsible for handling any subsequent disputes."
Sun Guofu thought for a moment.
"We'll accept the pre-sale contract for 35 million, but we'll only assume contractual obligations and not previous legal responsibilities."
What legal liabilities apply?
"For example, investigations into fund outflows and accusations of illegal fundraising," Sun Guofu said. "These are the loose ends left by your operations. We are only responsible for completing the project or refunding the client."
Ling Yun considered it for a moment.
"Thirty-eight million. You can pay in installments, with a down payment of twenty million and the remaining eighteen million to be paid off within one year."
"A down payment of 30 million, with the remaining 8 million to be paid off within six months," Sun Guofu countered.
"make a deal."
Sun Guofu smiled and extended his hand.
"It's a pleasure working with you."
"It's a pleasure working with you."
The two then discussed the details.
The scope of the transfer includes: land ownership, project approvals, design drawings, construction permits, and a list of pre-sale contracts.
Excludes: debts from previous projects, legal disputes, and outstanding matters with the Thai government.
Sun Guofu's team will be stationed in Bangkok within a week to take over the site and documents.
"There's a problem," Sun Guofu said, "What about those customers who have already received refunds..."
"The privileged class has already returned the dollars and won't cause any more trouble," Ling Yun said. "For ordinary people, you can try to communicate again. You can either continue to wait or return the baht. The baht has depreciated, so the cost of returning baht is very low."
Will they accept it?
"Most people won't back out," Ling Yun said. "The Thai baht is still falling, and taking back the money would mean even greater losses. They'll hold out hope and wait for a new developer to take over."
"What if someone causes a scene?"
"Give them a little something," Ling Yun suggested. "For example, promise them priority in choosing the property rights, or waive two years' worth of property management fees. It won't cost much, but it can keep them calm."
Sun Guofu nodded and noted it down.
"In addition," Ling Yun added, "you can use Li Taijian. He has connections in the local area and can help you handle government affairs, but be careful, he has a big appetite."
"clear."
At noon, the two had a simple meal at the hotel restaurant.
Sun Guofu called his lawyer to prepare a draft contract, which he planned to sign that afternoon.
"So efficient?" Ling Yun asked.
"The business world is like a battlefield," Sun Guofu said. "Opportunities wait for no one. Thailand is in turmoil right now, which is the perfect time to enter at low prices. Once the situation stabilizes, prices will go up."
At 2 PM, the lawyer arrived with the contract.
A thick stack of books, in both Chinese and English.
Ling Yun reviewed the terms carefully. They were consistent with what had been discussed that morning: Sun's Real Estate would acquire all equity in the Digital City project for US$38 million, with an initial payment of US$30 million and the remaining US$8 million to be paid within six months. Sun's would assume responsibility for subsequent development and handling of customer relations.
"Okay." He signed.
Sun Guofu also signed.
They exchanged contracts and shook hands.
"The money will arrive tomorrow," Sun Guofu said. "To which account?"
"Singapore Starsea Capital," Ling Yun said, providing the account number.
"it is good."
After finishing his business, Sun Guofu relaxed.
"Pengzi has learned a lot from you," he said. "He used to be impulsive, but now he's much more composed."
"Sun Peng is very capable," Ling Yun said. "He manages the internet cafe business perfectly."
"That's all thanks to your leadership," Sun Guofu said sincerely. "This collaboration was also facilitated by Pengzi. He said, 'This project shouldn't just sit idly by. Our family can handle it, so we'll take it over.'"
Ling Yun nodded.
That evening, Lingyun called Sun Peng.
"We've reached an agreement with your dad. The digital city will be transferred to your family."
"I know," Sun Peng laughed on the other end of the phone. "My dad told me this afternoon. He said you negotiated very decisively, without any hesitation."
"The project is a good project, it's just that the timing is wrong."
"My dad said the same thing. He plans to change the project to 'China-Thailand Friendship City,' focusing on affordable housing. Once the Thai economy recovers, it should be profitable."
"I wish your dad success."
"Brother Yun," Sun Peng paused, "thanks. My dad says he got a good deal on this price."
"I didn't gain anything," Ling Yun said. "It was a mutually beneficial arrangement. I need to recoup my investment, and you need to enter the Thai market."
"That's because you took care of us."
After hanging up the phone, Ling Yun walked to the window.
Hong Kong's night view is as dazzling as ever.
The burden of the digital city has finally been shed.
Thirty-eight million US dollars, although less than the initial investment, is a good price considering the current situation.
More importantly, he got his cash back.
With cash, you can do more.
Operating systems, UHSB standards, gaming ecosystem, future plans in Southeast Asia...
All of these require money.
My phone vibrated; Li Ziyu had sent me a text message.
"The Philippine peso fell 5% today. Our NDF position saw an increase of $12 million in unrealized profit."
Ling Yun replied: "Continue to observe."