Page 82 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

Fortunately, this is not a vague and slow process. We ’ re going to
walk through several simple calculations that will tell you very quickly
whether you have a possible deal, or just a dog.
The vast majority of what you see in the market will be of the
canine variety.

In Commercial Real Estate, the 80/20 Rule
Is More Like the 90/10 Rule

Ever heard of the Pareto Principle ? It ’ s also known as the 80/20 Rule . It
means that 80 percent of something is usually caused by 20 percent of
something else. In sales, for instance, 80 percent of your sales may
come from 20 percent of your clients.
Well, in real estate a similar rule is at work, except it could be
called the 90/10 Rule . Try to spend only 10 percent of your time quickly
sorting through 90 percent of the deals that come across your desk,
because 90 percent of your potential profits will come from that other

10 percent of deals.
As you get better and better at analyzing, you ’ ll also be building
better relationships. Your network will know what types of deals you
do and the quality of your in-box will improve. After a while, you ’ ll
have people sending you only the deals that make sense.

You Need Only 10 Percent of the Numbers
to Sort Out 90 Percent of the Deals

If you were so inclined, you could spend months analyzing only one
deal. But something tells me you ’ re much more inclined to make
money than crunch numbers — am I right?
Fortunately for us nonaccounting types, you need only a handful
of critical - but - easy calculations to determine whether or not a deal is a
strong candidate.

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