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

can give to any real estate investor is to gather as much information
as you can from as many sources as you can and reach your own in-
formed conclusion as to market trends.

Selling When the Market Is Hot

A classic example of timing a sale was demonstrated by Leonard Kan-
dell who made his fortune by constructing and leasing residential
apartment buildings in New York City. Traditionally, he was a long-
term holder. However, when the idea of converting apartment build-
ings into cooperative apartments became red hot, there were any
number of avid buyers scrambling to buy residential rental buildings
with the objective of converting them into co-op apartments, so the
units could be sold individually for high prices. The problem faced by
any owner wishing to convert a building to cooperative ownership was
getting 15 percent of the renters in the building to agree to buy their
apartments. That was a legal requirement in the State of New York be-
fore the owner was permitted to declare his cooperative plan effective.
That’s where extensive negotiation came in. If you didn’t get 15 per-
cent, you couldn’t declare the co-op plan effective and there was a
waiting period before you could try again. So getting 15 percent of
tenants to buy often involved complex negotiations relating to the
price they would be willing to pay for their apartments and what they
wanted the owner to do for them to induce them to become buyers.
Once the co-op plan was effective, eviction proceedings were possible
to permit the owner to get possession of the remaining units and sell
them to new buyers. Agreeing to exorbitant payoffs to some tenants
became the norm.
Kandell owned many apartment buildings and he regarded his ten-
ants as family. When I asked him why he didn’t cash in on the conver-
sion boom he said, “I don’t want to fight with my tenants over turning
their building into a co-op. Let someone else have the headaches and

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