Page 192 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

explain their process for filling and maintaining the property. They ’ ll

also include one - year and fi ve - year projections for the property. This
is great stuff to have in your binder.
You may think that I ’ m being inconsistent here, suggesting that
you include projections when I blasted the use of pro forma numbers
in previous chapters. There is no inconsistency. I said you should not
base your buying decision on the seller ’ s projections. You defi nitely
should have developed some projections of your own, with the help
of your management company. It ’ s simply good business to manage
to goals.
The whole idea is to sell yourself and the deal. The underwriting
package you create is actually a marketing package that shows your
professionalism. The better you anticipate and answer any objection
that might be in the lender ’ s mind, the better your chances of getting
the deal funded. And believe me — your professional package will be
a rare treat for these people. There you go again, being easy to do
business with!

Assuming the Existing Debt

Some investors get excited when they hear that the seller ’ s existing
loan can be assumed. They think they can just take over the pay-
ments and be done with the financing, without lots of paperwork or

closing costs.
Times have changed. Now you must be qualifi ed by the bank who
holds the mortgage. They want to make sure you know what you ’ re
doing and can make the payments. They also will charge you one point
along the way.
In addition, though the closing costs can be much less than with a
new loan, you still must pay certain expenses because you still need to
do your due diligence.
You don ’ t always have to cajole a seller into assuming the debt. In
fact, sometimes the seller will state in the listing agreement that the

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