Page 165 - Trump University Commercial Real Estate 101

Take Onl y Intelligent Risks

street just rented to a dollar store and a teenage game arcade? This
neighborhood is changing in the wrong way.
Pretty soon, your target property will lose its higher - end tenants.
Then the only tenants you ’ ll be able to rent to will be lower - end ones
for lower rents. Lower rents very quickly decrease the value of your
property.

All properties are classified from A to D , and so are all areas. Avoid
doing business in the D areas. They can be highly profitable, but are

even more highly management - intensive. That ’ s another game you
can play in a few years.
You ’ re much better off avoiding all the headaches by investing in a
C property. This property will not be pretty, but will contain tenants
who provide steady income.

Properties That Have Been on the Market for a Long Time

The real estate market is just too active to let gems lie around for long.
If a property ’ s been on the market for a long time, your antenna should
be active, scanning for something wrong with it.
Remember the gauntlet of buyers that a broker will contact to sell
a property: First she will call her private list of best buyers; then the
rest of her list will hear about it; and last of all, her offi ce colleagues —
and their own lists — will have an opportunity to buy it.
If the property still doesn ’ t move, it will be advertised on the
Internet and in the newspaper classifi ed section.
After all these eyes review a property, the chances are very low that
it ’ s a great deal. I have found excellent properties that have been
picked - over by countless earlier investors, but it ’ s rare.

Do Not Fall into This Trap

I just finished saying that the chances are low — but not zero — of fi nd-
ing a good deal that ’ s been on the market for a long time. However, do
not use low chances as a reason for inaction!

145

10/14/08 10:56:18 AM
c07.indd 145 10/14/08 10:56:18 AM
c07.indd 145