Page 181 - Trump University Commercial Real Estate 101

8

Use a Money

Multiplier

AMATEUR M ISTAKE: “T HE BEST DEALS ARE
THE NO- MONEY- DOWN ONES.”
I remember getting a call from a very excited student one afternoon.
“Dave, did you get a chance to look at that great office building deal I

sent you?”
“Yes, Paul, I did. It doesn’t cash fl ow.”
“I know, Dave, but I can get in with no money down!”
“Great. Then you’ll have the pleasure of paying out of your own
pocket every month to keep this deal afl oat.”
Getting into a deal with the main feature of no money down is simi-
lar to buying a car based on the amount of the rebate you’ll receive on
day one. At best, these elements are a superficial measure of quality.

At worst, the feature is masking deeper problems with the deal.
In case you jumped ahead to this chapter, I’ll repeat a key point:
The best commercial deals almost always require that a substantial
down payment be made. Fortunately, the payment doesn’t have to
come from your own pocket.
That’s where your relationships again come into play; this time with
money partners. Your lender will lend whatever its guidelines allow,
and your money partners can put up most or all of the rest. We discuss
this more later in the chapter.
(Continued )

161

10/14/08 11:21:41 AM
c08.indd 161
c08.indd 161 10/14/08 11:21:41 AM