This Issue: Spot Real Estate Opportunities the Donald Trump Way

I talk a lot about education because I think a good college education can really take you far in life. At the same time, however, some people are incredibly book smart but are clueless when they deal with the real world. Others are street smart but can’t handle anything other than what they’re accustomed to.

A couple seasons ago, we based an entire season of The Apprentice on this premise, pitting highly educated candidates against those with less formal schooling. In the end, we discovered that the key to success was experience, not education. Learning how to write a business plan isn’t the same as actually writing one.

Knowledge is essential, but knowledge alone certainly isn’t enough. You must be able to act on your knowledge. You must put it to work because doing is how you learn and how you ultimately prove yourself.

I’ve certainly taken a lot of risks and not all of them were rousing successes. Few things worth doing are risk-free, so prepare to take chances.  Don’t always play it safe, but do try to minimize danger and be aware of what you could lose. Often, the risk will be worth the gamble, but sometimes it’ll be more than you can afford.

Don’t underestimate anything until you try it. You need hands-on involvement to understand anything - whether a task or an entire business operation - to know the problems you’ll face. You have to gain experience, and that only comes from actually doing - and doing often.

“Education, research, knowledge - learning in general - are at the core of my success.” - Donald J. Trump

We’ve been working on a new book here at Trump University, Trump University Wealth 101. It won’t be published for a few months, but I didn’t want to make you wait that long to learn some truly remarkable insights from our Chairman, Donald J. Trump, on the art and science of developing properties.

Trump Secret #1: Be Thorough

“Plug in and learn everything you can,” Mr. Trump writes in the new book. “You never know when information will come in handy.”

For example, Mr. Trump spent years investigating the building located at 40 Wall Street in lower Manhattan before he bought it. He learned about the building itself. He studied everything about the area. He knew how much money the property was generating from its tenants - and how much money it could earn. He knew about the owners’ activities and overall situation.

So when the time was right in 1995, Mr. Trump was able to buy the building (the tallest in lower Manhattan, right down the street from the New York Stock Exchange) for $1 million. That’s not a typo - he really bought it for about the same price that relatively modest condominiums now sell for in Manhattan. And you can imagine what it is worth today. He was able to do that because he is one of the world’s most powerful negotiators, but also because of his depth of knowledge about the property, its owners, and nearly everything else.

So the message is that your knowledge can help you recognize opportunities that other people pass by - and seize them too.

Trump Secret #2: Be Tenacious

Some things take time. For example, The Trump Organization is currently completing Trump Place along the Hudson River in New York City, on the Upper West Side. With 16 buildings, it is the largest development ever approved by the New York City Planning Commission. Yet you might be astonished to learn that Mr. Trump actually acquired the land for Trump Place - now universally acknowledged to be one of the most valuable pieces of land in the world - way back in 1974.

“That’s a long time to wait,” Mr. Trump writes. “If I hadn’t been tenacious, Trump Place would still be in my head. Tenacity enables you to work through obstacles and problems along the way without becoming worn-out or negative. In fact, you should expect problems, so you don’t waste energy.”

Trump Secret #3: Value Your Competition

Mr. Trump likes competition. He thinks it is healthy.

On July 12, 2005, for example, he broke ground for the Trump International Hotel & Tower in Las Vegas. It is the first of his real estate ventures in Las Vegas. That property doesn’t hide from competition. In fact, it is located right across the road from Wynn Las Vegas, the signature property of Steve Wynn, a man who reinvented the Strip with such mega resorts as The Mirage, Treasure Island, and the Bellagio.

“Competition fires me up.” Mr. Trump writes, “Competition pushes me to expand and extend my efforts beyond what I thought was possible. Competition forces me to outdo myself. I love competition because, ultimately, it makes me bigger.”

Now that is remarkable thinking. If your competitors are achieving success in a particular region, your wisest move could be to go right there and establish a beachhead as a developer too. Don’t hide from your competitors. Use what they are doing to impel your own activities to greater success.  

Editor’s note: If unusual wisdom like this fires you up, you will find even more of it in all Trump University courses, including The Real Estate Investor Training Program.  

Real estate agents aren’t only for families who are looking for homes. They can also be important allies for real estate investing.

An agent who knows your investing priorities will be out there working for you every day, culling through new property listings on your behalf. If you turn out to be a good customer, he or she will also tell you about properties before other investors hear about them.

Although you have to work with an agent for months before you can know how well the relationship is working, you can ask these questions as soon as you meet to gauge whether he or she has the potential to be a valued ally:

“Which currently available properties are best for real estate investing?”

• Bad answer: “All our properties are great investments!” (That tells you that the agent is going to waste a lot of your time.)
• Good answer: “That depends on your investing priorities.” (That tells you that the agent will invest the time to understand what you are looking for.)

“Can you tell me about some real estate investment properties you have sold in the past and how well the buyers did with them?”

• Bad answer: “All the properties we have sold turned out to be very good investments for the people who bought them.” (See above.)
• Good answer: The agent begins to describe a string of specific properties and how much profit they generated for the investors who bought them. This answer lets you hear about the kinds of properties the agent has sold, and what represents a good deal in his or her thinking - and a lot more.

An agent who does a good job of pointing you toward promising properties could be the best agent to sell your properties too. But not necessarily! In the Real Estate Investor Training Program at Trump University, we teach a separate set of screening criteria to help investors be sure their agents can make those critical sales. Watch this blog over the next week for a post on that topic too.

A success strategy you need today from The Wealth Builder’s Blueprint

You meet with a venture capitalist to obtain funding for your new company, and you get shot down. Or a loan officer shreds your mortgage application before your eyes.

Those are the times when you are very likely to just give up on your dream. It can be nearly impossible to try again. But the second attempt is the most critical. It represents the time when you begin to learn significant information about what you are doing - information you need to succeed.

Part of the problem is that we are biologically programmed to avoid repeating negative experiences. Our brains try to rescue us from them. And how can our brains do that? They help us figure out ways to avoid going through the difficult experiences for a second time. They encourage us to procrastinate, avoid, make excuses, minimize the importance of what we need to do - and find many other ways to avoid going through the painful experience again.

So how to you outsmart your brain? Let me make two suggestions:

• Do not think. Just do it. File that application. Of course you will prepare carefully, but try not to plan or think too hard about just how the experience itself will go. When you are in the middle of it, you can count on yourself to know how to handle it.
• Just make a start. I have a friend who is a famous 400 meter hurdler. She tells me that when she begins a race, she is only thinking about running the first 100 yards. “After that, I will decide whether to run the next 300 meters,” she says. And of course, she always finishes the race.

Before you start a 30-minute drive to a mortgage broker, you can say, “I will get in my car and drive for 10 minutes. If after that I don’t want to go, I will turn around and drive home.” The odds that you will do that? Practically none.

So master the art of trying a second time. Trick your brain, do whatever else you need to do. It’s uncomfortable, but critical. The second try is critical. It's the time when you either secure your chance of success - or let it slip away.

For more potent success strategies, put the power of The Wealth Builder’s Blueprint to work for you. Click here to learn more.