Page 141 - Trump University Commercial Real Estate 101

Ho w to Disco ver the Truth behind a Deal

Incomplete Maintenance Requests

This is crucial, because the number one reason your tenants will move
out is if their maintenance requests are not being met.
Review the items that are still outstanding; this should provide a
sense of your exposure at the time of takeover, not to mention tenant

attitudes. You may find that you need to advertise heavily the message
that the property is under new management and that new manage-
ment cares.
If you see many requests, then make a note to yourself: If you go
ahead with the deal, the fi rst thing you must do at takeover is to have
the management company visit each tenant to discuss the open
items. You want the manager to be giving a specific deadline for that

tenant ’ s item to be done. Tenants are jittery enough when a property
changes hands, and they ’ re at risk of moving. This is your chance to
create a stick campaign to keep those tenants happy and paying you
monthly rent.
Tenant turnover will be your highest expense at many commercial
properties, so it should be a very high priority to anticipate and solve
maintenance issues.

Is Renegotiation Necessary?

You ’ ve received all the financial due diligence information. You and
your mortgage broker have reviewed it. If it checks out, then it ’ s time
to take the next step.
If you ’ ve hit some surprises or discrepancies, you must now revisit
your calculations. Are these new factors large enough to affect how
much you can pay for the property? If so, you must go back to the
seller and explain what you have found.
Some sellers will simply tell you to take it or leave it. Others will
be embarrassed because their own numbers seem to contradict what
you were originally told about the deal. Still other sellers had just been

121

10/14/08 10:54:44 AM
c06.indd 121 10/14/08 10:54:44 AM
c06.indd 121