”That’s all, folks” (or the end of the period when all the unserious people could become millionaires)

It was summer and the traffic was dramatic. 2007 was the year that made even the most suspicious person realise that the traffic in Bucharest is and will remain crazy. The meeting was set at one of the “nice” areas of the city and I went together with a colleague of mine. My driver left us 100 meters away from the meeting point, so we walked a bit (allowing me to pretend that I did some exercise for my extra kilos). As always, I was in suit, with a tie, without being interested in how hot or cold is the atmosphere.
We entered in the restaurant, which was recently opened, another one of the many new restaurants in the city which have nothing new to present to the people, just high prices, arrogant (at least) waiters and an owner who behaves as if he is the President of U.S.A. About the food… you need to wish for some good luck regarding the quality and the way it will be cooked (ok, there are always exceptions, but the majority is like this, either some people like it or not).
I was supposed to meet one of the two owners of a building in the north of the city. He was presented to me as the “good one”, while the other was the “difficult one”. This introduction was done by his employee and (presented to me as) his right hand, who was telling me that working for this guy is a unique experience and that he did not intend to leave this company, even if I would offer him triple salary (although to be honest I didn’t propose anything at all). “Mr X is kind of busy now, he will be late for few minutes, but let us start talking” the gentleman proposed.  I proposed to wait for his boss, who arrived after 45 minutes, looking at us, as if WE had delayed (and of course he did not apologize).

This guy was between 30 and 40 years old, typical example of a new kind of people that we have seen the last years appearing in Romania: Few years ago, he was able to make some money due to a coincidence (the story has also the version of someone who received back from the state a property that belonged to a relative of his). Then he did some business using his connections, showing his “love” to the right people. Finally, when the foreigners arrived, although he doesn’t admit it, even himself was surprised with the millions they paid him for a land for which he paid few hundreds of dollars or nothing at all.
Now he was sitting in front of me, with such a bored face, that I asked him if there was any problem. Everything was ok, as he told me, news that would allow me to sleep peacefully in the night. He and his partner had built a building somewhere in the North area, in a location which I considered (and I was proved to be right) very dangerous for an investor to block his money. Also, he informed me that he has bought many other lands, including a land of 100 million euro, which I was negotiating for 70 million (yeah, I keep doing the same mistakes, I know…).
My proposal for him was simple, to pre-agree in buying his building, with a price connected to the income of it. (For the ones who are not familiar with this business, I proposed to him to pay him lets say 14 times the income of the building in 1 year. So, for example if the income would be 1 million euro per year, he would receive 14 millions). I proposed to him a deal which I considered at least appealing. But instead of answering, he started telling me about the big land that he bought with 100 million euro. There he would develop a project using half of the coefficient he was allowed to use. He wanted to create an… artificial lake in the middle of the land and then a bridge of glass, connecting the main boulevard with the buildings located behind the lake. I presented again my proposal, but I received as an answer that he had a lot of money, that he knows the business very good and that he will do other projects, summing investments of 500 – 600 million euros.
I tried to reach an answer in a different way and I asked regarding the prices he wanted to rent the building. He told me numbers 30 – 40% bigger than the best transaction of the area. His opinion was backed up by a report of one of the “big” agencies in Romania, who also signed the contract of exclusivity, so as to rent the surfaces. When I tried to explain to him that the numbers were very big, he told me that I don’t know anything about Real Estate in Romania and I should leave this job for the ones who know, for experts like him. He also added that his project is the best in the city, the design of it was inspired by…. Burj Al Arab in Dubai and that no one else will be able to develop anything in the area in the next 15 months.
(The third one who was inspired by Burj Al Arab. Too funny, I am one of the 10 – 20 people in the Balkans who have the actual plans of Burj Al Arab and Burj Dubai. As it seems, I am too stupid to realise the connection between these plans and the projects here in Romania…)
I decided to have a last try: I told him that with our calculations, his building would bring an income of around 120.000 euro per month, which means 1,44 million per year. So, I could bring to him a serious investor, who could purchase it by giving to him a minimum of 20.5 million euro (with a yield of 7%, calculating the income with 14,28 years). He started laughing, telling me that I do not know anything about business. He was not even tempted by the cash he could receive in advance. He said he does not need money, he has enough. He mentioned to me about some deals with better parameters for the owners and he did not bother when I reminded to him that these deals were in the centre of the city, downtown, while his project is located many kilometres from there. He terminated our “so called conversation”, announcing to me that he would not sell for anything less than 34 million euro. “I have more money than you”, he told me, “this means that I know better the business and for sure Romania”.

Ok, usually after this kind of disappointments, others commit suicides; others enter in monasteries and become monks. I tried to collect the pieces of my broken heart and to continue my poor miserable life, remaining someone who does not know business, as I do not have as money as that gentleman told me that he had. But, something bothered me. Between my many disadvantages, you can also find the curiosity that I have in some things regarding my business. So, I continued keeping an eye on the progress of that project, without saying anything even to my people in the office.

Days and nights, weeks and months have passed, as an author may have written… After many failed attempts to talk over the phone with the employee of the “self announced tycoon”, I finally found him. His voice was totally different. He informed me that he does not work anymore for his boss. When I told him that he was telling me that this was a connection for a life time, he answered by asking me to hire him, with… half of the salary he was telling me that he had in his previous job.
“What about the 2 distinguished big businessmen?” I asked. “They split, fighting for ridiculous reasons, as they were never focused on their business, they were just promoting their egos through the project”. “I did not hear anyone renting space in that building, what happened?” I continued. “We did not manage to rent more than 25% of the surface, and this happened with half of the price we were calculating. Anyway, the building was sold”. “How much?” I asked, although I could almost guess the price. “11,5 million euro, because that guy you met did not have money to pay some taxes to the state and he got panicked”. “And that BIG KNOWN agency with their lovely projections, plans and advices?” “They got paid all their money and they simply informed us in the end that the prices we asked were too high comparing to the market. Based on their contract, they were covered and they managed to get their fees directly from the advances of the rentals”. “And the land of 100 million euro?”. “It was a pre contract, in which he lost the advance of 1 million, because he failed bringing the rest of the money”.

A famous Greek singer, Pashalis, had a very famous hit, some 40 years ago. The translation says something like this: “And now, my love, everything has ended, the roads have become impossible to pass. And now, my love, take my tear, give me as compensation an apology”.

I guess that the journalists of Forbes magazine are desperate. They lost a potential new entry in their catalogue of the richest people in the world. But please try to keep in mind the main idea: The huge appraisal of prices transformed some people into arrogant and impolite, who think that they can trick everyone and they can continue making millions without working. Now this era has expired. From now on, the creation of a new bulk of cash will be more connected to work and smart moves than luck, arrogance and cheap tricks.
The same happened to my country, Greece. Most of the “smart sweet crooks” of the ’80s disappeared in the ’90s, when the competition became serious and they could not play the games of the past. The ones who survived either changed and they are serious today, or they were eliminated in the last 10 years.
In the upcoming years you will find out about many more people like this, who have money without having worked and they confuse themselves with REAL businessmen, just because they woke up one morning and they found out their bank account was full. Don’t try to make deals with them. They will find you only when they are desperate. In all other circumstances, they will simply treat you like the guy of this story or even worse…