Chapter 1430: Hot Potato
Translator: Nyoi-Bo Studio Editor: Nyoi-Bo Studio
The bids grew higher and Li Du wanted to continue bidding. Just as he raised his hand to do so, the house-pickers looked at him. They had a feeling that he would do something drastic.
Li Du did not disappoint them. He said, “400,000!”
The faces of those heavy-weight house-pickers who had been interested in the manor darkened.
Compared to the value of the manor, Li Du felt that 400,000 was not considered a high bid at all, and neither would have 500,000. The estimated value of the manor was quite a few million. It was one of the most expensive estates in Santa Monica.
According to the unspoken guidelines of the property auction trade, the more highly valued a house was, the riskier it was to bid for it.
The risk one might have to bear with foreclosure houses was nothing more than a damaged electrical circuit or a former homeowner who refused to leave the house. For high-value houses, those risks were easily resolved.
The higher was the value of a house, the lower was the ratio of its value to the value of the electrical circuits. For example, a bungalow priced at 100,000 dollars would require a few tens of thousands for the electrical circuits to be fixed. The ratio would be, therefore, ten percent. To repair the electrical circuits of a million-dollar villa would cost perhaps 20,000 to 30,000 dollars, two to three percent of the price.
As for the risk that a former tenant would refuse to leave, it was easier to resolve. One just had to keep watch for a couple of days to see if anyone was living in the house. As long as someone stayed outside to observe for two days, it would be easy enough to confirm.
Lu Guan and Li Du had studied a manor like this before. It could be purchased for 800,000. After refurbis.h.i.+ng, the manor could be sold for at least 900,000. A profit margin of 100,000 was high.
However, the strangest thing happened. When Li Du bid 400,000, there were some heavy-weights who shook their heads and backed out from the bidding war.
That astounded him. Could these people have thought that they would really be able to get a big manor of around 20,000 square feet for less than 400,000 dollars? How could that be possible?
Some people backed out, while some persisted. The price continued to rise.
Li Du was too lazy to spend more time there and hence, he immediately called for a bid of 500,000.
Compared to the actual value of the manor, that price was nothing. There was still room for some compet.i.tive bidding to go on. Li Du had almost wanted to go directly to bidding 700,000 previously.
Something strange happened, however. At 500,000, all the house-pickers backed off.
They were all a.n.a.lyzing Li Du and wore a similar expression on their faces – a look of mockery. They acted as though they were there to watch a show. Many had their arms folded across their chests, while others were smiling coldly. It was as though spending 500,000 on that house was considered a certain loss.
Li Du could not understand. He sensed the strangeness of the scene but could not fathom the reason for it.
The auctioneer was the only one who still acted normal. He shouted loudly, “500,000, it’s 500,000! My buddies, this is a serious bid. However, it’s definitely worth it. So, is there anyone willing to bid higher? 510,000, anyone?”
“Alright, seems like this price is already at the threshold. So 500,000 once, 500,000 twice… is there anyone who wishes to interfere? n.o.body? Then it’s 500,000 twice, 500,000 twice, very well, 500,000! Deal!”
The spa.r.s.e applause rang out, accompanied by some laughter. Many people looked at Li Du with mischievous and meaningful expressions.
Lu Guan walked towards him and said softly, “Boss, something doesn’t look right.”
Li Du rolled his eyes and said, “I’m not blind. Of course, I know that something is not right. Go check out what happened.”
After the deal of the manor, the auction ended. The property agents had entered the place and were promoting their services, stuffing their business cards into people’s hands, looking to represent others.
Before Lu Guan had found out what happened, someone walked up to them. It was Marcos, who had greeted Li Du previously. He said, “Buddy, this is your first time attending a property auction, right?”
Li Du nodded. “That’s right, please kindly advise us.”
Marcos smiled and said, “I noticed that you never once looked at your phone the entire time. Don’t you have a partner? Or didn’t your partner go to the location of the house?”
Li Du said, “Is there a need for that?”
Marcos nodded. “Yes, absolutely. You will learn very soon that it is necessary!”
He did not say what exactly was going on, but only dropped a few ambiguous sentences before leaving.
Later, more house-pickers walked over. They smiled and said, “You’re really well-to-do, buddy. However, the more money you have, the more losses you suffer. Rich but silly, how pitiful.”
“Hope that you won’t cry too much, haha.”
“That’s 400,000 you’ve put in. If this money comes from a bank loan, then you better get ready to run away or jump off a building.”
There had to be some issue with the house, that was obvious. However, Li Du did not know what the problem was.
Similarly, it was obvious that none of those house-pickers had any intention to tell him. They were all here to mock him. In their eyes, Li Du was the enemy.
Li Du found a very experienced and respectable property agent. He was Snyder Tilav, a black man who looked down-to-earth.
The procedure for the transaction was complex. The paperwork was also complicated. It was more appropriate for a professional to handle those. Although he would have to spend some money on that, he would hopefully be able to avoid trouble.
Li Du engaged Snyder and then asked him about the situation at the beach manor.
After hearing Li Du out, Snyder looked clueless and said, “There’s no issue with the paperwork for the manor. I’ve looked at it beforehand. Sorry, pal, I’m not sure where exactly there’s a problem.”
Not long later, Lu Guan returned and said, “Boss, I know what happened. We’ve run into trouble.”
Li Du said, “Tell me.”
“The name of the beach manor is Suns.h.i.+ne Jazz, but it is also known as Dark Villain because its current owner is a well-known gangster in Santa Monica.”
“This gangster leader has been put into jail by the federal police. That’s because he has been avoiding paying the property tax, and also because he had been unable to pay the government fines for crimes. That’s why Suns.h.i.+ne Jazz was confiscated by the government.”
“But although the b.a.s.t.a.r.d was sent to prison, he still has a lot of men outside. At the beginning of the auction, some of his people had gone down to the manor, warning the house-pickers who were there that they would torture to death whoever bought the house.”
“That means to say, this house is trouble?” Li Du frowned.
Lu Guan nodded helplessly.
It was no wonder that those house-pickers told him that he should leave his partner to hang around the house while he partic.i.p.ated in the bidding. It turned out that during the auction, the original homeowner had appeared and issued a warning.
Li Du realized that he had fallen for the plot. The house-pickers had not even intended to fork out 200,000 for the house. They did not want to provoke the local gangsters. They had only placed bids so that it would cost Li Du more.
They stopped bidding at 400,000 because they were afraid that Li Du would quit if the price went higher. Then, the house would land in their hands. After all, they were not sure what Li Du’s budget threshold was.
Of course, that was only his conjecture. It could also be that the heavy-weight house-pickers felt that at 400,000, it was not worth getting in trouble for the house. If the price was lower than that, perhaps there would be some value in taking the risk.
Regardless, he was sure that the house was a hot potato and the house-pickers believed it would burn his hands.