Page 133 - Trump University Commercial Real Estate 101

6

Ho w to Disco ver the

Truth Behind a Deal

How to Manage the Due Diligence Process

If you ’ re investing smart, you ’ re investing very little time on the stream
of deals that come to you when you have an effective deal - attraction
machine.
Week after week, you ’ re getting better at reviewing deals and
knowing when you have a potential gem on your hands. With the let-
ter of intent, you and the seller are taking the transaction to a serious
level. You ’ re pulling out the 80/20 rule again, but this time you ’ ll be
spending 80 percent of your time on potentially great deals.
In real estate, the 30 - or 60 - day period after an offer is accepted is
called an inspection period , but the process is more commonly called
due diligence . The term comes from Wall Street, where brokerage
houses must thoroughly review a company before offering its stock to
the public.
Your due diligence will be in three main phases:

1. Financial. Do this phase first because the other two steps

require you to take money out of your pocket, and you won ’ t be

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