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TR U M P STR A TEGI ES FO R R E A L ESTA TE

Small real estate investors can take the same approach by bor-
rowing small amounts, investing it wisely, paying the loan back
promptly, or ahead of time, and then subsequently asking to borrow
more. This approach requires that you start small, but it can lead to a
very large credit line, and is the foundation of any real estate in-
vestor’s ability to get financing, whether you are dealing with banks
or private investors. It is extremely important to never forget that the
key to borrowing money or attracting investors is establishment of
trustworthiness. If you promise something, especially money, deliver
it when and how you said you would. A happy lender or investor is
your best salesman for attracting new ones.

BORROW AS MUCH AS YOU CAN FOR AS
LONG AS YOU CAN

The theory behind this is simple. If the loan market goes well (i.e.,
interest rates go down), and you have a right of prepayment without a
major penalty, you can effectively refinance at a lower interest rate
and save money. If the market goes sour (interest rates go up), you
don’t have to worry about refinancing because the rate you’re paying
is probably lower than the then higher prevailing market rate of in-
terest. But that’s only part of the story. Remember that the key to a
successful investment strategy is to have extra money on hand that
you have no immediate use for! If you keep yourself liquid then you
can act when an opportunity presents itself, which often occurs
when money is tight and there are few buyers with significant cash in
the market. The fact that you have available cash enables you to snap
up the bargains that are available. Two other factors to consider are
that loan proceeds are not treated as taxable income and interest paid
on loans for business purposes is deductible from taxable income.
The proper leveraging of borrowed money can save you many dollars
that otherwise would go to the government.

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