One bread, some cheese and a… royal family. (The most common trap you should avoid when buying forests)
28th of October, 1940. Early in the morning Greeks said “NO” to Benito Mussolini’s ambassador, refusing his proposal for his troops to enter Greece and continue their route to the Middle East. The Greek… amateur army won the battles that followed, forcing Hitler to delay his invasion of Russia and send his troops to destroy Greece. The history has changed. The delay to enter Russia made him lose the war.
On the 28th of October I am always ready to say “no”, “yes” is difficult for me on this day…
“The royal family wants to buy forests in Romania”
Sometimes God punishes me for my sins. This is when I think it’s a “good idea” to meet and try to do business even with people who are obviously not serious. One of them called me 50 times during the summer of 2009: “Look, this time you will see that things are serious. The royal family of … and the famous German business family of … want to buy forests in Romania. I have found the right forest for them, it is located in the south western part of the country. In 2 hours I’ll be in Bucharest, let’s meet and I will explain everything to you”.
I don’t drink alcohol, so I cannot claim that I was drunk when I accepted his proposal. He arrived in my office, waving a bunch of papers in front of me…
“A forest, bought in 1869 for 3.000 golden coins”
The story was simple:
· “There is a forest in the area of …, with a surface of … hectare”.
· “It was bought in 1869 for 3.000 golden coins, by 42 people”.
· “Today the people with property rights are about… 1.260” (!)
· “It’s a typical “Obste” and I am expert in this”
· “I control the local leaders and we will be able to finish the deal fast” (yeah)
· “In 3 weeks’ time we will be counting the money”
– “You seem to have everything prepared. What do you want from me?”
– “You are good at structuring the deals. I want you to help me in creating a system onhow we will give the money to people, plus to secure me from the legal point of view”.
– “Go to a lawyer”
– “I don’t know someone whom I can trust”
– “Impossible. Is there any lawyer that is not worthy of our trust?”
Trying to… swim in the mud
I decided to be a part of this deal, at least to invest some hours at the very beginning. This is why I sat down and created a structure that would allow everyone to be secured and the project to proceed. At the same time the… distinguished gentleman kept coming and going, bringing controversial news:
– “Everything is ready, they are waiting for us to sign”
– “The leaders want more money now, we have a problem”
– “An important guy there wants to block the case and wants additional money in order to agree and sign”
– “We resolved all the problems. I was there yesterday and more than 1.000 villagers came to my car, asking me when we were going to sign and pay them”
– “I spoke with the notary there. I will get another 5 to help. We will pay them with a % as well”
– “Why do we need a lawyer? You prepared the documents, let’s move on”
Lawyers: Difficult people, asking too many questions…
After the structure, I decided not to invest more of my time in the deal. I kept on asking for the documents to be checked, which kept on being ready to be delivered “immediately” or “tomorrow” (famous words, used by people who don’t want / cannot deliver).
At one point, the gentleman said that everything is ok and we should proceed with the contracts. But I did not agree. “We go to the lawyer and you bring all the papers with you. If not, I do not want to know anything else about this deal”. So, with a cold heart, he accepted to visit the lawyer…
He started presenting stuff there, in his own way. The lawyer was a lady and he thought that by trying to charm her, he would convince her to believe his story. “To charm her…”
We were sitting in an expensive conference room, talking to a lawyer dressed in a dark business suit and white shirt. (As usual) she had not any make up on (I think that some ladies think that wearing make-up makes them less serious, which is wrong). She was looking at the guy who was trying to flirt with her… from his unbrushed hair, to his dirty shirt and his shaking elbows. The more he was trying to flatter her, the more she was doubting every single word he was saying. She kept on asking questions…
“This is one bread and this is one piece of cheese. Why is it so difficult to give them to a Romanian villager?”
In the end he exploded… “I don’t understand why we are still talking about this case. It is simple, bread and cheese. This is one bread and this is one piece of cheese. You take the bread, cut it into slices and give one slice to each person. Then you do the same with the cheese. We will distribute money to the owners like this. You complicate things too much. We will meet the people, give them their money and everything will be ok”
At that moment the lady stopped. “I cannot continue anymore, please provide me with this list of documents and we will discuss afterwards”. As we were walking out, he insisted: “She likes me, but plays hard to get”.
Too bad she did not like him… because once he delivered some documents, she immediately verified that the forest in question had 14 litigations in court. He tried to convince me that all of them can be resolved by paying some money in advance (from our future profits), but God did not want to punish me anymore. It was the 28th of October and I told him “no”. This is when he stopped appreciating me and slammed the door in my face.
My lesson: Once you hear about forests with many owners, stay away. Things are even worse than in the agricultural lands department. There we can, at least, assume that each owner owns a piece of land. How do we split a forest? We give each owner a few trees?
If the owners are more than 4 – 5, forget it. If there is just one, then you have a real investment option to examine.
If you like to mess with many owners, be ready to find a way to distribute… “bread and cheese”…In the forest