This Issue: Foreclosures: Why You Need Up-to-the-Minute Strategies to Succeed

The Donald Trump blog is in the running to win the “Best Celebrity Blog Award” in the 2007 Weblog Awards.

And don’t you think we should win? We certainly do. The problem is, voting ends in a few days and some other celebrity blogs are ahead of us in the poll.

But not for long! You can help us close the gap and win by CLICKING HERE to cast your vote for the Donald Trump Blog.

So please take a moment to help us - and Donald J. Trump - win.

Thank for you helping to make your favorite mentor the king of the blogosphere!

When you’re buying foreclosed properties, you can throw away all the classic wisdom about real estate investing, right? It’s a whole new world with new rules.

No, wrong. The fundamental rules apply, only moreso. Let’s take a closer look.

Rule One: Foreclosure or not, location is still of prime importance. You still need to look for properties in locales that promise growth and appreciation. So always consider the trends in municipalities where you might buy investment property. A new commuter line, a new hospital or a new school can dramatically increase property values. Even though you will find more foreclosures in dying communities, stay away from them. Location is still king.

Rule Two: There must be a way to increase the value of what you are buying. If there is no potential for growth, why invest? Remember, not all foreclosures are the same. As with all properties, some are standouts and some are duds.

Rule Three: Cash flow is still king. Even if you are applying a prudent“buy and hold” strategy, how will you generate income from your holding? Remember that the “on paper” value of the properties you own is fine, but that negative cash flow can drain the lifeblood from your investments and sink you.

Rule Four: Comparable values are still the yardstick for success. Comps are the yardstick you must use to evaluate the potential of your investment. So do the math. When buying a house to renovate and sell, deduct the cost of your renovations from its fair market value. That’s how much you should pay, not one cent more - whether the property is a foreclosure or not.

Rule Five: You still need expert advice and counsel. Buying a foreclosure does not entitle you to get sloppy and make decisions on the fly. You need a good attorney, a capable home inspector and all the other pros who can help you minimize risks and avoid mistakes.

Rule Six: Take your time. Even with “foreclosure fever” in the air, the first foreclosed property you see is probably not one you should buy. Yes, there might be a limited period of time left to take advantage of the current foreclosure boom. But that doesn’t mean that you should rush to snap up the first property you consider and make unwise mistakes. You need wisdom on your side. If you don’t know where to get that wisdom, I’d urge you to investigate all the new foreclosure seminars we are hosting this month across the country - and sign up now.

“No person who is enthusiastic about his work has anything to fear from life.” -- Samuel Goldwyn

Lots of people are unable to motivate themselves. They don't know how to move themselves into a position to succeed.

I believe that success starts with your attitude. You must be convinced that you will succeed! When you think that nothing can stop you, others will adopt your view. They will support you, jump on your bandwagon, and contribute to your success. They will give you help that they won't provide to people who don't believe in themselves.

One key is to learn to project a winning, confident attitude that inspires success.

Begin by working with your internal processes. For example, change the way you greet each day. Before you get out of bed, take a few moments to welcome the day. Think of the reasons why today can be special or important for your future. Say aloud to yourself, "What a great day!" Think about how you can make wonderful things happen.

As ideas flow through your mind, feel the enthusiasm that your positive attitude has generated and the smile on your face.

You'll be amazed at how energetic it will make you feel. That energy will carry you through the day and help you to be happier and more productive.

It is also critical to challenge yourself. I thrive on challenges -- on doing what others think cannot be done. I use challenges for self-motivation.

To me, the best challenges are the ones I give myself. At this point in my life, I don't need to impress anyone, but I still need to satisfy my own goals and become involved in things that excite me.

After Trump Tower was completed and hailed as such a rousing success, I knew it was just the beginning. I wanted more. I needed to become involved in larger-scale projects.

The lesson is to compete with yourself. Don’t be a one-hit wonder. After you succeed, find ways to surpass what you’ve already done. I am convinced that no matter what I do, I can always to something bigger and better.

Always try to reach new heights, with bigger and better results. Being satisfied can only undermine your future and keep you from reaching your potential.

Experience testifies to the low-risk nature of property investments. However, you shouldn’t naively interpret the words “low risk” to mean “no risk worth noticing.”

Tens of thousands of homebuyers and property investors, often speculators, have lost vast sums of money in real estate. And these same people will continue to lose vast sums in the future too.

Why do they lose? Let’s take a look at some of the most common reasons:

Ignorance. They fail to gain detailed knowledge about the markets where they are investing. In other words, they do not consider the laws of supply and demand.

Unjustified optimism. They blindly assume that the near future will mirror the immediate past. They take on more mortgage debt (or accept higher interest rates) than they can realistically pay.

Gullibility. They foolishly believe the infomercial gurus who preach “No cash, no credit? No problem!”

Unwillingness to work the numbers. They fail to anticipate the maintenance and renovation dollars that must be invested to sustain and enhance a property’s value.

Personal lack of discipline. They destructively spend and borrow to support a conspicuous lifestyle they cannot legitimately afford.

In other words . . .

People who suffer losses in property don’t lose money because property investing entails high risk. They lose money because they fail to learn and apply the principles of property investment analysis and personal financial management.

So please ignore the advice of anyone who claims that owning property itself  will make you rich. Place the focus and responsibility for success on yourself.

Repeat these words: “If I educate myself, if I discipline my spending and borrowing, if I learn the art and science of investing wisely, then through property I can build as much wealth as I want or need.”

Acquire the knowledge that opens your mind and stimulates entrepreneurial insight, and then follow through with action. You have come to the right learning center. Trump University is the place to make it all happen.

Editor’s note: As always, Professor Eldred’s wisdom shines through in the advice he has chosen to share with us today. It can help the members of Trump University evaluate the true profit potential in the foreclosed and other properties they are considering. To learn more about making sure that foreclosed properties will provide profits, sign up for one of the Profit from Foreclosure Investing seminars from Trump University.