George Carpentier had sold his fashion belt and shirt company and moved on to property, joining his father, who was a seasoned developer and taught George the best ways to make money in property. His first task was looking around and finding some suitable land where he could develop a medium-sized project. George spent days, if not weeks, on the search of the ideal location. He travelled through the best areas of the Costa del Sol, Balearics and the Coastal resorts of Cádiz, and found an interesting plot in Marbella not far from the sea and next to a prime golf course. The plot was indeed attractive and very marketable, hence they decided to conclude the deal after their inspection visit.
They then hired a top architect to do their first residential project. It did not take long for George to realise that the sooner he started the marketing, the better the outcome of the business would be. So he hired a graphic designer to put a large advertising board with a photo and the main features. It was merely a matter of weeks before George managed to sell it off to an investor client. It was sold for a figure close to €2 million. Once the cost of the plot, all the building expenses, the architect’s fees and the general expenses were deducted, they made a final profit of €800,000. It was a good deal which did not even need any kind of bank finance.
Celebrities came as clients and left as friends.
George thought that he had made a wise decision of shifting from fashion to property development where he could make substantially more money.
George continued buying development plots and building glamorous villas, which he sold for a hefty profit. He also started doing business selling on behalf of others and setting up an agency which he named George Carpentier. He concentrated primarily in luxury properties to sell on to his clientele from The UK and Northern Europe. George had certainly understood that cold climates of Central Europe meant that his clientele – high end only – would be only too happy to buy a second home in Southern Europe. Great golfing and tennis, state of the art cuisine, 300+ days of sunshine each year and superb infrastructures were convincing enough.
Celebrities came as clients and left as friends. His networking liaisons were sensational. He set up a letting agency at a time when most estate agents would not even touch that sector as they often regarded it as a waste of time. George saw things from an entirely different perspective. “A letting deal often leads to a future sale,” he often told his staff.
One day, just out of the blue, a rich asparagus farmer from Sevilla called George. He needed a seafront apartment for August and money was no object. “I simply want the best”. George found him a very special place which belonged to a Basque client who was to become George’s main partner in the future. George concluded his deal with the usual sharpness and perfection and both his rental client from Sevilla and his Basque client were impressed about this young man closing deals with enormous facility.
It must have been less than one year after the Basque and George concluded their first large scale deal. George found the land in the very heart of the Golden Mile of Marbella. It was a large residential plot which allowed the development of 100 flats looking on to the sea. The land was offered at €1 million, for which George offered a down payment of €10,000 as a purchase option, with a clause that allowed him to renew the contract’s maturity date for several months provided he paid 10% minus his initial payment.
George convinced a friend to lend him money to renew the option. He was given £100,000 by an American client in exchange for 10% of the land of the development. He then flew to Madrid and took a suite at the Ritz. In the following mornings, he started calling his main clients from whom he had been renting their properties in the summer season. The Basque agreed to invest €300,000. A large construction company agreed to invest a further €400,000. Other clients followed suit.
It was at this point that George became a real millionaire extraordinaire.
In less than a week, George had all the money ready not only to pay the full purchase price of the land but he also made a very handsome profit in addition to his commission for selling it. He secured exclusive management and marketing rights on the entire project. In addition to 25% of the profits. It was at this point that George became a real millionaire extraordinaire.
On completion, he sold his last penthouse and decided to take one year off to go sailing and think what his following move would be. The market was extremely hot and George knew it could well be the start of a downturn in the economy followed by a credit squeeze.
Was George wise to stop developing as he saw a possible burst in the so-called property bubble? Should he have continued to develop other sites in lieu of developments made specifically for the foreign market? Being in such a strong financial position, would it have been wiser for George to just invest in a private property portfolio to achieve a good rate of rental return and live peacefully whilst watching his properties rise in value?
Some interesting conclusions must come up and teach us different points of view to improve our general business knowledge.