Chapter 105: Buying Out The Other Tenant in Common – PART 2
Gun-Ho received a phone call from the son of the co-owner of the land in Gangdong District.
“Oh, you are the son of the co-owner? How are you?”
“I tried to convince my father. I told him several times already that 4 billion won is way too high for the property interest he is holding since there is a market price that says otherwise.”
“Did your father change his mind?”
“He is worried about the capital gains tax after he sells his property interest.”
“Your father has been retaining the land for an extended period of time, so he won’t have to worry about the tax. It won’t be much at all.”
“Right. I talked with a friend of mine who is working as a tax accountant. He said the same thing that the tax my father has to pay won’t be much.”
“I think so.”
“Let’s just make it 3.5 billion won! My father still insists on his price, but I think I can persuade him with 3.5 billion won.”
“3.5 billion won? For that price, I will have to borrow an additional amount of money from a bank. And I will have to pay more of the loan interest.”
“I can’t successfully convince my father with the price any lower than that. My father’s stubbornness is in his genes. He has been like that since I can remember.”
“Let me think about it and will let you know.”
Manager Kang who was standing next to Gun-Ho asked him.
“What did he say?”
“It’s from the old man’s son. He said his father won’t go below 3.5 billion won.”
“What are you going to do, sir?”
“I’m not sure. It’s a lot of money, but I do want that land.”
“Once you buy the old man’s property interest, you will own the land with full ownership, and the land would be 6.5 billion won land… It is expensive, but you can hardly find a vacant lot like that in Seoul City these days.”
“What do you think I should do, Manager Kang?”
“If I had money to pay for the land, I would buy it.”
“Hmm.”
Gun-Ho wanted to have fresh air. He drove his car to Cheonggye Mountain and arrived at the entrance.
“I feel so nice whenever I stay in a place, I could be surrounded by this green nature while getting away from the busy city.”
Gun-Ho parked his car and walked in Yetgol Village where a lot of tourists often visit.
‘I purchased my property interest for 2981 million won by the auction. If I purchase the other interest at 3500 million won, how much exactly would I spend for the land?”
Gun-Ho started calculating with his calculator while sitting on a rock.
“The price for the land only is 6481 million won.”
Gun-Ho had his 10 billion won in his stock account and 6.4 billion won in his bank account. He started with 19.8 billion won that he made from the stock investment related to Four Major Rivers Project, and spent 3.4 billion won in purchasing condos, a vehicle and in filling his office with furniture and stuff.
After that, he divided the remaining money into two different accounts: stock and bank.
“The money in my stock account is all tied up in the stock—Kumho Chemical.”
Gun-Ho felt a bit anxious.
“I used 300 million won out of 6.4 billion won in my bank account to issue additional shares of my company to raise its capital. I spent another 3 billion won to purchase the 50% of the property interest of the land in Gangdong District at the auction. So I currently have 3.1 billion in cash in my bank account. What am I going to do? I have to come up with 3.5 billion won in cash to buy out the co-tenant. Okay, will have to sell some of the Kumho Chemical stock to make 400 million won.
While he was lost in thought, someone called him.
It was the branch manager of the stockbroking company.
“Sir, how are you?”
“I’m well, thank you.”
“I’ve been waiting for an opportunity to have a round of golf with you, but you seem to have been very busy.”
“Yes, well…”
“Are you, by any chance, interested in a corporate bond?”
“A corporate bond?”
“If you get a corporate bond issued by a large corporation and keep it until its expiration date, the interest you make from it is not bad at all.”
“I’m not interested in it for now. Moreover, the money market rate is about to increase, right?”
“Right, once the money market rate increases, the bond price decreases; however, 2.8% is guaranteed for three-year bonds.”
“I’m sorry. I am not interested.”
“I just wanted to let you know since it is a very good bond. You can check the fact on Bondmall.or.kr.”
“I don’t know.”
“Since you can get your principal and interest back, it is safer than investing in the stock market.”
“I’m not so sure.”
“Well, by the way, give me a chance to go and play golf with you, sir. Hahaha.”
Gun-Ho got off the phone with the branch manager.
“I’m handling so many things right now. I can’t put my hand on a corporate bond.”
Gun-Ho paid 3.5 billion won to the old man and now he was the sole owner of the 200 pyung large vacant lot located on the main road in Gangdong District in Seoul. He spent 6.482 billion won in total.
Manager Kang seemed to be more excited than Gun-Ho.
“Um, sir, that land… do you have any plan to develop that vacant lot?”
“Why?”
“Do you want me to ask those tenants who are running a parking lot and tented cart to pay more for their rent?”
“Let’s just leave it as it is for now.”
“Since you spent so much on acquiring that land, will we have any financial issues?”
“I don’t think we will, but I won’t have much money to spend now.”
“Are you planning to borrow money with the land?”
“Let me ask you a question, Manager Kang since you had worked in a bank before. If I want to borrow money from a bank with that land, how much do you think I can borrow?”
“It depends on the appraised value of the land. The appraised value we had last time from the court was 4.5 billion won for the 50% of property interest.”
“Didn’t they raise the value a bit higher than the actual value in order to raise the starting auction price?”
“Even so, it shouldn’t be much different.”
“Then since I have full ownership now, the appraised value should be 9 billion won.”
“That’s about right.”
“So, if I borrow money 60% of the appraised value of the land, then it would be 5.4 billion won.”
“If you have an excellent credit score, a bank will lend you up to 80% which would be 7.4 billion won.”
“That would be more than I actually pay for the land. Haha.”
“You will need an appraisal statement first before you could apply for a loan. It will cost you some money though to get an appraisal statement.”
“Haha. I’m not going to borrow money from a bank. I was just saying it. Let’s talk more about it once I return from my trip to China.”
Gun-Ho called for the bookkeeper—Ji-Young Jeong.
“Ms. Ji-Young Jeong! Could you buy a flight ticket to Shanghai, China for next Wednesday?”
“Okay.”
Gun-Ho was standing up to leave the office to practice golf when Manager Kang talked to him.
“Um, sir. One more thing I need to talk to you…”
“What is it?”
“Mr. Min-Hyeok Kim who is working as a residential manager in the Bangbae location.”
“What about him? Did something happen? Did he quit?”
“No, it seems that he drinks way too often during his work hours.”
“He shouldn’t have drunk while he is working.”
“Since he is your friend, I think you’d better talk to him rather than I do.”
“I believe he is under a lot of stress after he failed the government job exam again this time.”
“I understand that he would be stressed; however, I’m just telling you because he drinks way too frequently.”
“Really? I will talk to him.”
On the way to the office after practicing golf, Gun-Ho called Min-Hyeok.
“Min-Hyeok? It’s me, Gun-Ho. How’s work at the OneRoomTel?”
“Oh, Gun-Ho. I mean President Goo. It’s okay.”
Min-Hyeok sounded down.
“I have something I have to do in the area, Bangbae Town today. I will stop by the OneRoomTel around 7 pm after work. Let’s have dinner together.”
“Today? Okay. I will be here.”
When Gun-Ho arrived at the OneRoomTel, Min-Hyeok was sitting on his chair while looking into a blank space.
There was Min-Hyeok’s room on the fourth floor near the exit. The room was assigned to a residential manager to use as an office and the manager’s room. Gun-Ho, who had lived in a tiny room in a OneRoom for a long time, could understand how Min-Hyeok would feel right now. He felt sorry for Min-Hyeok.
“Hey, Min-Hyeok. How’s it going?”
Gun-Ho said in a cheerful voice while extending his hand to Min-Hyeok for a handshake.
“It has been a while, Gun-Ho.”
“How are you? Are you okay?”
“It’s good. I like here.”
“You look down, man. How did you do on the exam?”
“I failed again.”
“Oh, was the result already released? You will pass someday if you keep trying.”
“Whew.”
Min-Hyeok let out a deep sigh.
“Let’s go and have dinner.”
Min-Hyeok hung a sign at the door which said the residential manager was not available and it had a contact number as well.
“No one would be here if I go out for dinner.”
“It’s okay. If anyone needs you, they will call you. Let’s go.”