Page 163 - Trump University Commercial Real Estate 101

Take Onl y Intelligent Risks

Let ’ s talk about the main reasons for deals to fall apart:

Bad Numbers

I know that I just finished telling you to make offers and not sweat the
fact that some of those deals are crummy. That is so you get out there
and acquire your deal legs .
Now I ’ m going to tell you something that appears to contradict
what I just said: Dump the deals when the numbers don ’ t work.
Here ’ s the trick: Be sure you ’ re out there making offers and not
dumping them too soon. But when you realize that a seller will not come

down on price, or will not give you great financing to counteract the
high price, it ’ s time to pass on that deal.
Remember to make a courtesy call to the seller or broker and
explain your reasoning.

No Numbers

As you know from an earlier chapter, when you ask for numbers , you
mean something specifi c. You want actual numbers from the past two
years, plus year - to - date profi t - and - loss statements. What if the seller
says “ I don ’ t have those ” ?
Believe it or not, you will hear that occasionally. At times I ’ ve been
told that the seller simply doesn ’ t keep such records, which might be
true in some cases. I ’ ve known sellers to say they just hired a new man-
agement company and the old company took all the records. That may
be an excuse or it may be true.
I ’ ve never been able to put a deal together unless the seller could
give me accurate statements.

Pro Forma Numbers

As you know, these numbers are merely projections and wishful think-
ing about what the property might do in the future. If all you receive is
pro forma numbers, this is a big red fl ag.

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