Page 151 - Trump University Commercial Real Estate 101

Ho w to Disco ver the Truth behind a Deal

If you do resolve any issues, be prepared for your deposit to become
nonrefundable very soon. You might even be asked to put down more
nonrefundable money as you work your way to the closing.

One Very Key Step

Before you sign off on the due diligence, be sure you have a written

commitment from a lending institution to finance your deal. If there
are any items in the loan commitment letter that must be satisfi ed
before the closing, now is an excellent time to make sure you ’ ll be able
to do them all.
And I do mean written commitment. I had a four - property com-
mercial portfolio under contract in Louisiana for $ 12.1 million, with
$ 130,000 down as a deposit. It was a week before the expiration of the
inspection period, and the bank had not yet given me a commitment.

I kept calling my loan officer and he assured me that everything

would be fine. He said the loan committee would be meeting on
Thursday and that he had already received the green light from a cou-
ple of key people on the committee.
Thursday came and two of the committee members were on vaca-
tion. Now they didn ’ t have enough members to vote, and my deal was
pushed off to the following week.
I had a choice: Sign off on the due diligence and take my loan
offi cer ’ s word that it would be approved next week — or get an exten-
sion from the seller. I opted for the extension.
I called the seller and explained that I needed a one - week exten-
sion. He said “ Hey, Dave, no problem . . . as long as you ’ re willing put
up another $ 65,000 hard ” (that is, nonrefundable). I told him “ No way. ”
I wanted the extension, but I wasn ’ t putting up any money hard.
He asked me to prove my confidence with the lender by putting

up that nonrefundable money. I didn ’ t trust the loan officer enough to
bet $ 65,000 on his word. I told the seller that I wouldn ’ t do it. The
property would have to go out of contract and back on the market.
When I got my loan, we could go back into contract if he wanted to.

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