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TR U M P STR A TEGI ES FO R R E A L ESTA TE

and then selling it for a profit. Trump often uses this strategy
but without selling the whole building. For example, Trump will
“flip” enough residential condo units in a building he has just com-
pleted to pay for the construction costs of the property and recoup his
initial investment. However, if it’s a good income-producing prop-
erty, he will also keep some kind of an ownership interest and enjoy
the income it produces.
Keep in mind that when you sell, it is not essential to sell the
property for all cash. Consider selling it on an installment basis under
a land contract or take back a purchase money mortgage at a favorable
rate of interest and earn profit for a longer term. When Trump bought
the GM Building in New York City, it was the biggest “fixer-upper” I
ever saw. This deal is discussed in detail in Chapter 6. He spent
millions of dollars creating a new plaza area; a magnificent lobby; and
state of the art elevators, electrical, HVAC, and other building sys-
tems. The completion of the improvements generated higher rental
rates, which increased the building’s value immensely. After only a
few years of ownership, the increased rents enabled the building to be
sold at a huge profit.
These are things to consider when you create timelines:

1. Do I think my ownership of this project is short term (five
years or less), or long term?
2. Do I want to pass ownership of this real estate to my heirs?
3. Do I intend to sell it without developing it (such as property
bought for land banking)?
4. Do I intend to develop it and then sell it?
5. Can I afford to hold on to the property if the real estate mar-
ket goes south for a few years and my rental income suffers?
6. When am I going to be required to make expensive capital
improvements?
7. Does the property throw off a good income?

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