Trump Strategies for Real Estate

1. Develop key personal qualities for real estate success

"Everything worth doing is difficult, and in order to accomplish it, you have to be tenacious."

Enthusiasm is contagious. Trump's success in real estate is built on five key personal qualities: enthusiasm, relationship-building skills, showmanship, preparation, and tenacity. These qualities help inspire confidence in others and make them want to help you or see things your way.

• Enthusiasm: Communicate your vision over and over to all involved parties
• Relationship-building: Forge strong cooperative relationships with all parties
• Showmanship: Find concrete ways to communicate your vision to potential partners
• Preparation: Anticipate problems and questions, have answers ready
• Tenacity: Turn roadblocks into additional benefits for your investment

Developing these qualities will give you a powerful advantage in real estate transactions, helping you negotiate better deals, sell properties for more money, and dramatically improve profits.

2. Think big and create value in prime locations

"There's no right price for the wrong property."

Location matters, but vision is crucial. Trump's philosophy is to "Improve any Location" by using creativity and vision to change how a location is utilized. He focuses on four key factors when evaluating a location:

• Great views
• Prestige
• Growth potential
• Convenience

To maximize value, Trump looks for undiscovered potential that is not already factored into the selling price. He's willing to pay a premium for a prime location if he can devise a plan to dramatically change how people perceive and value the property.

Small investors can apply this principle by thinking creatively about ways to enhance value, such as:

• Renovating or building an addition
• Increasing the number of units or quality of tenants
• Changing the use from residential to commercial or vice versa
• Seeking a variance or zoning change

3. Master the art of negotiation in real estate deals

"Information is power in a negotiation."

Preparation is key. Trump's negotiation strategy involves several key principles:

• Create an aura of exclusivity
• Don't be misled by the aura of legitimacy
• Every negotiation requires preplanning
• Avoid a quick deal
• Use the "invested time" principle

To negotiate effectively, focus on building relationships, understanding the other party's position, and finding creative solutions to problems. Use tactics like creating deadlines, delays, and deadlocks to your advantage.

Negotiation tips:

• Insist on negotiating directly with decision-makers
• Be willing to walk away from a deal
• Use silence as a powerful tool
• Always have a Plan B
• Be patient and persistent

4. Create "sizzle" to command premium prices

"Spend money where it can be seen."

Perception drives value. Trump is a master at creating awe-inspiring buildings with unique, dazzling features that command premium prices. Key elements that add "sizzle" include:

• Distinctive architecture
• Impressive interior design
• Strategic landscaping
• Prestigious location

Small investors can apply this principle by adding eye-catching, unique features to their properties that will impress buyers or tenants. Focus on:

• Creating spaciousness (e.g., higher ceilings)
• Using high-quality materials in visible areas
• Adding luxurious amenities (e.g., Jacuzzi tubs, built-in closets)
• Enhancing curb appeal with landscaping

Remember, it's not just about the features themselves, but how you present and market them to create perceived value.

5. Raise money strategically for real estate investments

"Borrow as much as you can for as long as you can."

Leverage is crucial. Trump typically puts up less of his own money than you might think, often using partners or investors to finance projects. Key principles for raising money include:

• Develop relationships with lenders and investors
• Use creative financing structures
• Don't sweat the details of loan agreements
• Consider mortgage alternatives for small investors

Strategies for attracting investors:

• Show that you have skin in the game
• Offer various investment options (e.g., fixed return vs. profit share)
• Create a detailed business plan
• Leverage your track record of success

Remember, it's often easier to borrow money when you don't need it. Establish credit lines and relationships with lenders before you urgently need funds.

6. Assemble a team of top real estate specialists

"Never try to get something for nothing; always pay for it."

Expertise is worth the cost. Trump retains top real estate specialists for every project, including architects, lawyers, leasing agents, accountants, contractors, engineers, and designers. Small investors should focus on hiring key specialists essential to their project's success.

Tips for hiring specialists:

• Hire based on reputation and track record
• Be willing to pay a premium for top talent
• Play up the prestige of your professionals in marketing
• Use local experts whenever possible
• Check references thoroughly
• Negotiate fees in advance

Consider offering professionals a small piece of the profits to align their interests with yours. Remember, the value they add to your project can far outweigh their fees.

7. Manage construction projects efficiently and on budget

"Don't wait until it's broken to fix it, fix it before it breaks."

Details matter. Trump learned the construction business from his father and is known for his hands-on approach to monitoring progress. Key principles for managing construction include:

• Be your own general contractor when possible
• Create incentives for early completion rather than penalties for delays
• Be fanatical about details
• Motivate workers with praise and recognition

Use tools like critical path analysis to manage timelines and coordinate different aspects of the project. Stay vigilant about quality control and be prepared to make quick decisions to keep the project on track.

8. Market properties effectively to attract buyers and tenants

"One picture is worth a thousand words."

Sell the sizzle. Trump's marketing strategies focus on communicating the value, excitement, and appeal of his properties to potential buyers or tenants. Key elements include:

• Creating dazzling presentations (e.g., scale models, videos)
• Using high-quality marketing materials
• Targeting advertising to the right audience
• Employing intelligent promotions

Marketing tips:

• Focus on unique selling points
• Use professional photography and videography
• Create a compelling narrative around the property
• Leverage social media and online platforms
• Host exclusive events or open houses

Remember, the goal is to create an emotional connection with potential buyers or tenants, making them feel that your property is special and desirable.

9. Manage properties as a customer service business

"Make people want to be in your building because you care about your property."

Tenants are customers. Trump's approach to property management involves treating it as a "customer service business" and seeing tenants as valued customers. Key principles include:

• Developing an eye for detail
• Treating tenants as treasured customers, not problems
• Being vigilant about repairs and upkeep

Property management tips:

• Hire customer service-oriented staff
• Implement systems for quick response to tenant needs
• Maintain impeccable cleanliness and appearance
• Offer unique amenities and services
• Regularly seek tenant feedback and act on it

By providing exceptional service and maintaining properties to high standards, you can command premium rents and retain tenants longer.

10. Implement smart holding and exit strategies

"If he sells any of his real estate holdings, he would have to reinvest the proceeds in something, and what better place to have your money than in a good solid chunk of mother earth."

Plan for multiple scenarios. Trump rarely sells properties that are good income producers. However, it's important to have clear strategies for both holding and potentially exiting investments. Consider:

• Short-term vs. long-term investment horizons
• Market cycles and economic conditions
• Potential for value appreciation
• Cash flow and income generation
• Tax implications of selling

Holding strategies:

• Refinance to access equity without selling
• Improve the property to increase income or value
• Convert the property to a different use

Exit strategies:

• Sell to a 1031 exchange buyer
• Seller financing or installment sale
• Partial sale (e.g., selling some units while retaining others)

Always have multiple timelines and scenarios planned, allowing you to adapt to changing market conditions and personal circumstances.

Last updated: August 15, 2024