Page 268 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

Beware of investors like this. They have no integrity. And get that
proof of funds document.

Also ask for a financial history from the buyer. You ’ re unlikely to
get a pile of tax returns, but it would be reasonable to get a letter from

his lender stating that he is qualified to take down the deal.
Make sure you get a big enough deposit to keep the buyer in the
deal. Many buyers naturally want to put down as little as possible, and
some will even suggest with a straight face that a few dollars should be
suffi cient. That ’ s when you simply smile and suggest that a few per-
cent of the purchase price would be suffi cient — say, one to three
percent. The bigger the deal, the lower the percentage.
If you ’ re smart, you ’ ll get a down payment before the due diligence
period and then ask for more money when the buyer signs off on the
due diligence. This would mean that all of the buyer ’ s deposits into

the deal would be considered hard — in other words, if he walks away,
he loses it all. It ’ s a good way to keep him in the game. If he doesn ’ t
want to put up any additional funds, perhaps he isn ’ t serious after all.
A few buyers will put money down hard right at the offer stage.
I like these buyers! They let you know they are committed to the deal
by giving you tens of thousands of dollars that they know they ’ ll not
get back unless they close. That gets my attention.
Why would a buyer do this? He may already have done a lot of the
due diligence and likes what he sees. He may know it ’ s a competitive
situation, wants the property, and is willing to take a risk to get it. He
correctly knows that by going hard early, he ’ s telling the seller he is a
closer, and if the seller takes the offer, the deal is very likely to happen.

Google Is Your Friend

It ’ s true that some of the best things in life are free. When it comes to
real estate transactions, your use of the free Google search engine is

definitely a wonderful thing.

Google your buyer and find out everything you can about him.
Sometimes you ’ ll verify that the buyer is indeed credible and substan-
tial. Other times you ’ ll come up with very surprising results.

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