Page 253 - Trump University Commercial Real Estate 101

The Right W a y to Sell for Maximum Profit

mile or two of our property. That was another leading indicator that
four new properties would come online near us within the next
two years.
If ours was a C property , this would have been great. It would mean
that the value of the entire area would increase and we would be able
to charge higher rents. Moreover, we wouldn ’ t have to worry about
our C tenants moving to the A property, because they would not be
able to afford it.
The problem? Our property was a B . Those other properties
would all come online at about the same time, and they ’ d be actively
cutting their rents to poach B tenants from properties like ours.
If our tenants could get brand - new space for the same amount we
were charging, and they would get better amenities, too — that would
be a no - brainer . When our occupancy dropped, so would our net oper-
ating income and property value — within the next two years.
Our regular check - in with the building department gave us the
information we needed to know that now was the time to sell. We could
have stuck it out if our plan were to hold properties in that market for
the long term. It wasn ’ t. We therefore grabbed the $4 million profi t
while the grabbing was good .

Leave Some Meat on the Bone

This is solid advice, regardless of your exit strategy.

If you ’ re a fi x - and - flip investor, you ’ ll do your flip that much faster
if your deal is attractively priced.
If you ’ re selling after there ’ s been a big run - up in prices, this is
defi nitely the time to leave some profi t in the deal for the next buyer.
You do that by selling into strength, and by definitely not waiting

until you see the market flattening before you sell.
Look, your buyers are watching that market, too. If they see noth-
ing but strength at the time you are selling, the transaction will be a
breeze. If both you and they are watching the gathering clouds, you
will really have to discount your deal to make it move.

233

10/14/08 11:31:45 AM
c12.indd 233
c12.indd 233 10/14/08 11:31:45 AM