Page 99 - Trump University Commercial Real Estate 101

Ho w to Read a Deal

process for doing this, and I outline it in my book, Multi - Family
Millions published by John Wiley & Sons (2008).
,
I ’ m not talking about slapping a new coat of paint on a property
and charging more. If you reposition incorrectly, you simply pour
money down the drain. If you do it properly, and give the right time
and attention to each phase, it can be wildly profi table.
The ultimate is to reposition a property in an emerging market,
where not only the property and tenants get better, but the entire market
takes off. You only need to do one of these deals in your lifetime to put a
permanent grin on your face and lots of zeros on your bank balance.

How to Run the Numbers

Let ’ s sink our teeth into a couple of deals and see how the analysis
works.
Have the past two years ’ operating statements broken down into a
twelve - month trend report showing each month side by side. You ’ ll
also need the year - to - date operating statements broken down the same
way, plus the current rent roll. Remember, we don ’ t care about the
seller ’ s projections or pro forma numbers. We don ’ t want the thrilling
fiction the seller hands us about future performance, but instead want

to focus on the nonfiction of past and present results.
Note: Occasionally a seller will not give you actual numbers until
you put in an offer. This is crazy because you can ’ t make a rational
offer without them.
If this happens, consider moving on to the next deal. If you really
want to pursue this one, the only thing you can do is offer based on the
numbers you were given. Then, once you get the actual numbers, you
can renegotiate your offer if those numbers are drastically different.

Case Study 1: Apartment Complex

You get a property package for a 144 - unit apartment complex. It was
built in 1984 and tenants pay all the utilities. The seller is asking a

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