Page 104 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

Now let ’ s find the annual payment on that mortgage:

$ 260,000 Debt Service $ 4,000,000 Mortgage Amount

.065 Interest Rate
Now let ’ s figure acquisition costs:

$ 1,000,000 Down Payment .20 $ 5,000,000 Purchase Price

$ 150,000 Out - of - Pocket Cost .03 $ 5,000,000 Purchase Price

Plugging in all our numbers, we get:

$ 409,000 NOI – $ 260,000 Debt Service
_________________________________
.129 Cash - on - Cash Return

$ 1,150,000 Acquisition Costs
In other words, a 12.9 percent cash - on - cash return, which is
not bad.
Am I saying that this quick analysis is enough to buy a property?
Of course not. But it is enough to do that quick, initial review of all the
deals that will soon be coming into your life.
Remember, you will apply the 90/10 Rule and spend only 10 per-
cent of your time on 90 percent of the deals. That will allow you and
your team to focus the bulk of your efforts on only the most
promis ing deals.

H ow to Borrow an Additional Set of Eyes

Let ’ s say that you review a deal and get pretty excited. Start the offer
process immediately, and send that deal to your mortgage broker to
have him take a look at the numbers.

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