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T HINK B IG

be eager to buy luxury apartments for their senior diplomats across
the street from the UN building. TrumpTowerhasa5thAvenue
address which is very prestigious as is the Wall Street address of the
Trump building at 40 Wall Street. A small investor purchasing a
real estate parcel should consider whether or not the location or the
address is desirable for the people you intend to attract. If your tar-
get is high-income families, then you have to buy in an area that al-
ready contains luxury residences. If your intended target is
middle-income families or low-income families, pick an area con-
sideredtobedesirable among members of that group.

Growth Potential

Any real estate acquisition by Trump must have some growth poten-
tial or it won’t pique his interest. The most important questions to be
answered are: “Will this investment keep up with changing times?
Will rents keep up with inflation? Is the area stable, getting better,
or deteriorating?” Any serious investor in real estate should be ask-
ing and answering the very same questions if you expect to be suc-
cessful. One of the best places to look for undervalued property is in
marginal areas that are near very successful locations.
Land banking may be appropriate in many cases. Land banking is
buying land on the theory that, in time, it’s going to go up in value,
perhaps because it’s in a strategic location. Meanwhile, you’re going
to pay the taxes and other carrying charges on it. To the extent you
have no offsetting income—that’s your investment. You may not in-
tend to develop it or build on it yourself. Your intention may be to
own it until the value of its location increases. In New York City, a
good example of land banking might be acquiring an existing parking
lot in the midst of surrounding underutilized parcels. Your immedi-
ate intention might be to continue the property’s interim use as a
parking lot, until a more profitable use comes into view.

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