Page 28 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

I remember sitting at a restaurant in Boston with a friend, James
Romeo. At the time I owned several small multi-family buildings. He
knew that I had been spending a lot of time in my investment business
and that I had accumulated a nice little portfolio.
James asked if I would be available to go to a social event he had
planned. I told him I had to look at some new properties. He sighed
and said, “ Dave, when will enough be enough? ” I looked out the win-
dow and said, “ When I buy that . ” I was pointing at the Prudential
Tower skyscraper.
He rolled his eyes, because he knew the biggest thing I owned was
a six - family building. But I was already thinking big back then. I later
made sure to send James a magazine that featured my story and
described my portfolio, which did not include the Prudential Tower,
but had increased 20 times since we met for lunch that day.
Start as small as you like, but again the most important thing is to
start . Once you see the system working for you and that monthly cash
flow check being delivered, you ’ ll soon be thinking ever bigger. You

will realize that economies of scale favor larger properties and it ’ s actu-
ally easier to own larger properties, because they can support a larger
team to run them for you.

When You Follow Proven Systems, Commercial
Properties Offer Lower Risk

I know: How can something bigger than a house have less risk than a
house? It seems odd, but it ’ s true.
Let ’ s say you ’ re renting out a single - family residence. If you lose
your tenant, you ’ ve lost 100 percent of your income. If you can ’ t fi nd
another tenant, pronto, you ’ ll be covering the next mortgage payment
from your own pocket.
In a commercial property, you ’ ll have several tenants, and even
hundreds. You still may lose one, but the others will continue to pay

rent. This cash flow should cover most, if not all, of your mortgage
payment. Each tenant is like a pillar supporting your investment. If
you ask me, it ’ s better to have lots of pillars, rather than just one.

8

10/14/08 10:35:16 AM
c01.indd 8
c01.indd 8 10/14/08 10:35:16 AM