Page 110 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

if the seller insists on getting interest, offer simple interest to be paid
with the principal in five years. This again avoids making payments.

Cash flow is king in our business; you must guard it energetically.
If the seller balks at that request, at least he knows you ’ re negotiat-
ing like a pro! Your third offer will be for simple interest payments
monthly, principal to be paid in fi ve years . Save this version for when the
seller insists on a monthly payment.
Your fourth negotiating position is reserved for the moment when
the seller insists on acting like a bank and getting principal and inter-
est payments monthly. Your offer then might be 10 percent owner -
financing amortized over 25 years, with a 5 - year balloon.

Translated, that means the loan payments will be calculated as

though you will pay them over 25 years, and for the fi rst five years of
payments, that ’ s all you will pay. However, at the end of five years, you ’ ll

make one large payment to bring the loan up to fully - paid status. This
has the effect of dropping five years of your payments to a lower level.

I know this sounds like a lot of back - and - forth with the seller. Believe
me, it ’ s worth it. Besides, some sellers will accept your very fi rst offer.

Time Frame

A typical timeframe clause looks like this:

Seller shall submit a bona fi de Purchase and Sale Agreement (the “ Agree-
ment ” ) to Buyer with respect to the purchase and sale of the Property
within ten (10) business days from the date this letter of intent is fully
executed and accepted by both parties. The date the Agreement is exe-
cuted by both Buyer and Seller and receipted with the Title Company

(as hereinafter defined) shall be the Effective Date of the Agreement.
Buyer shall have Thirty (30) days after Effective Date (the “ Inspection
Period ” ) to make best efforts to perform physical inspections and other
due diligence with respect to the Property and decide, in Buyer ’ s sole
discretion, whether the Property is satisfactory to Buyer.

The Effective Date mentioned above is very important. It ’ s the date
on which both the seller and buyer are agreeing to sign the purchase
and sale agreement.

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