Page 131 - Trump University Commercial Real Estate 101

Locking in Y our Profit

One done, even in the rare case that a bank does not require one, or
you are doing a deal that doesn ’ t involve fi nancing. It ’ s an insurance
policy against getting stuck in a nightmare situation where you cannot
resell a property.
I further discuss Phase One and Phase Two environmental inspec-
tions in the chapter on due diligence.

Overview of the Process from Here On

If you ’ ve followed my advice on attracting, analyzing, and negotiating
your deal, you ’ re likely to be in the proud position of working a live
deal. We now have to turn it into a done deal .
We go into much detail in the coming chapters, but here ’ s a sum-
mary of the steps coming up:

• Put down a deposit of one percent to three percent of the pur-
chase price. Remember, you may be getting that deposit from
your private lender/partners.
• Get the seller ’ s financial due diligence package and confi rm that

your offer is still practical, based on all the additional informa-
tion you now have. If it is not, renegotiate for a better deal. If
the seller will not renegotiate, walk away.
• Start the physical due diligence and start to decide whom you
will use for financing. Walk the property with your property

inspector. This is the first time that you ’ ll take money out of
your pocket — money you will not get back — because you will

pay for the property inspection. That ’ s why we first do the inex-
pensive financial analysis, and only later do the physical

analysis.
• Engage an attorney to start the title work and legal due diligence.
Sign a term sheet with the lender with whom you will fi nance the
deal. The lender will require a nonrefundable deposit between
$ 7,000 and $ 25,000, depending on the size of the deal. This
deposit pays not only for the lender ’ s time, but also for the

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