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Richard Branson, the head of Virgin Group, is one of the most famous and successful entrepreneurs in the world. His portfolio of assets now include everything from media companies and airlines to telecommunications companies and real estate.
But one of Branson’s smartest early purchases was Necker Island, a 74-acre island in the Caribbean that he visited in the late 1970s and quickly fell in love with.
Entrepreneur Luke Murray recently recounted how the deal went down on Virgin’s blog.
When Branson visited Necker at age 28, it was owned by Lord Cobham, who was asking $5 million for the uninhabited property. Branson boldly decided to offer $100,000 and was quickly evicted by the insulted landowner.
Over the next few months, Branson slowly increased his offer while looking for the necessary funds, according to Murray. It just so happened that Lord Cobham was in need of short term cash, and he finally accepted an offer of $180,000, more than a 96 per cent discount off the asking price.
The purchase did come with some stipulations. The government required any foreigner who purchased the island to build a resort, or the state would reclaim ownership.
It took Branson five years and $10 million to construct his island haven, but it was a worthwhile investment — despite the fact that part of the resort was destroyed in a fire last year.
In addition to the enjoyment that guests have had over the years, Branson estimated in 2006 that the island’s value had grown to approximately $60 million, a 33233 per cent increase over what he paid for it.
Unsurprisingly, he called it his “best financial move” in an interview with UK website This is Money.
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