Thursday, November 08, 2007

Inauguration of the Clinic - Buying the place

Let me share with you all the major event that happened in late October: the inaugural function of my new clinic. In this post, I will tell you about how we got to acquire the place where the clinic came up. My wife Nishrin and I had, over the past year and a half, been looking for a large premises, at least 350-400 sq. ft. floor area, to be able to start her parlour and a small place within that for my new clinic. Our search had started at Mazgaon over two years ago, but its scope widened to areas like Clare Rd., Byculla main road, J.J. Hospital area and even the Bohri Mohalla area where Nish currently runs her parlour from a rented premises. Things weren't moving, and in the meantime, realty prices began to zoom up like mad. We had funds to the tune of 22 to 25 lacs, which, later, we hiked to about 30 lacs, but there weren't any decent premises available in that budget.

Our search narrowed down to a 350 sq.ft. place near the J.J. traffic signal, and before we knew it, that owner refused to sell the place and backed off. Sometime around mid-May, a broker approached us with a proposal from another party which had a main road shop close to the J.J. signal, but was a bit smaller, at around 250 sq.ft. Negotiations started with the party asking for 40 lacs net, and promptly broke down as we simply did not think the place was worth that! Remember, we had to give an unspecified amount to the landlord - this would be anywhere from a fixed amount of 5 lacs to a fixed percentage of the amount we paid to the owners. Thus, we would have to shell out an additional 7-10 lacs for the landlord, and we simply did not have that kind of money.

Our thinking got to the point where we almost gave up the whole idea of buying a place in these cost-inflated times. Then, we got used to the idea that that place was really good, and we would not want to give up on it; so we began to discuss how to raise additional capital. Loans would have to be taken, there was no question. We put a counter proposal of 35 lacs including the amount to be paid to the landlord.

This was not fair to the owners, since they too did not know what the landlord would be seeking. Hence we gave them another figure: 30 lacs Net, take it or leave it. In the final meetings, this figure was re-negotiated to 32 lacs net. and then the talks with the landlord took place ... this was between the landlord and the owners. The former asked for 10, and finally settled for 7.

Thus, the deal finally cost us 39. We paid a brokerage of 0.60, and spent another 4.5 on the renovation of the place. The clinic has thus cost us nearly 44 lacs, give or take 25000 rupees. To raise this huge difference between what we had (30) and what was needed (44), we took loans from doctors, relatives, and friends, plus a 3 lac loan from a bank to part meet the cost of the renovation.

We got possession of the place on 31st July, and began work on the premises by mid-August. The work went on for over 2 months, and the place was finally ready on Sunday 21st October 2007 for the official inauguration.

More in the next post.

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