Page 112 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

You may very well be told that some of this information is not
available, as in “ I have two years of profi t - and - loss statements, but
not for the third year. ” This is not a reason to kill the deal right away,
because you may be able to get the information in other ways. For
instance, the profi t - and - loss might be reconstructed through inspect-
ing vendor invoices and utility bills.
It comes down to just how good the deal is: If it looks really good,
you won ’ t mind working harder for the information. If it ’ s a so - so
deal, you may be right in dropping the offer and moving on to the
greener pastures that your marketing machine will soon direct you to.
Attach this laundry list to your LOI, but don ’ t sweat the details:
I explain all of these items and the entire due diligence process in the
next chapter.

Deposit

You ’ ll usually put between one and three percent of the purchase price
down as a deposit. This money will be held in escrow until the closing
and will be credited to you at the closing. You will get this money back
if you walk away from the deal within the Inspection Period — that is,
as long as you didn ’ t offer hard money at the time of deposit.
Hard money means you agree that you won ’ t get that money back if
you decide to drop out of the deal. Why would you ever offer such a
thing? Some sellers require that you put up hard money at the begin-
ning of a deal.
I don ’ t recommend this. If you do, you had better be sure that
you ’ ve done a lot of your homework before you get into the deal, and
that it has a very high probability of going through. As with most things,
it ’ s a judgment call relating to just how good the deal is. Resist the
temptation until you get extremely comfortable analyzing deals, and
even then put down hard money very sparingly.
Your deposit automatically turns into hard money after the inspec-
tion period is up. Sometimes a seller will require a second deposit after
the inspection period, and this money will immediately go hard .

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