Page 50 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

A MATEUR M ISTAKE: “ I ’ LL WA I T UNTIL
THE MARKET CHANGES BEFORE I JUMP IN. ”

A great many investors fall into what I call the local paradigm . Here ’ s
how it works:
The commercial market starts to recover and prices rise. Investors
look at the opportunities on the market and kick themselves — they
could have bought these same properties six months ago for 20 to 30
percent less.
They put off buying a property until the market corrects , and prices
come down to where they should be . Unfortunately for them, the mar-
ket simply continues its upward climb.
Another six months go by and prices are up another 20 to 30
percent. These investors now exclaim to anyone who will listen: “ These
buyers are crazy! I ’ ve lived in this market all my life and I can tell
you — nobody will buy commercial real estate in this area for those
prices! ”
They continue to stay on the sidelines. And — you got it — prices
continue to climb.
When these local experts endure this self - kicking two or three more

times, they finally throw in the towel and go with the fl ow . They, too,
buy into the market.
Only now they ’ ve waited so long that they truly are buying at the
top. By defi nition, the top is when there ’ s the greatest amount of posi-
tive news to report, and it took that much news to convince these
people.
Don’ t let this happen to you. Make sure you are guided by facts and
research, and not by any decades - old impressions of the market that
you ’ ve known since you were a kid.

I ’ m often asked, “ When is a good time to buy commercial real
estate? ” I answer “ Now — if you are buying the right property type, in

the right emerging market, at the right price. ” That ’ s a much more
accurate and useful answer than “ Oh, the right time is one year from
now, ” without qualifying the statement.

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