This Issue: No-Fail Financial Strategies for Today's Market

We’ve all heard the saying “connect the dots.” I see it as having enough knowledge to be able to connect the dots in a reasonable and informed way.

In a conversation I was having a few years ago, one guy mentioned that the Trump name had become a famous brand around the world. Then he added, “What’s in a name?” and sort of laughed and then said to me, “In your case, a lot!”

I noticed that another man seemed out of the loop about the quip. So I said “That’s Shakespeare. ‘What’s in a name’ is a famous line from Shakespeare.” So he still looked perplexed and asked “From what?” And although I knew it was from Romeo and Juliet, I said, “Look it up. You might learn some interesting things along the way.”

I’m not proposing that you spend years studying Shakespeare, but a topical knowledge of certain things will greatly enhance your capabilities of dealing in the major leagues with people who are well educated in a variety of subjects. Don’t be left out! Take a few hours a week to review the classics in literature, or history, or something outside of your usual range of interests. Limiting yourself is not the best choice.

Many topics come up in the course of a business discussion or interview, and while we can’t know everything, we should know as much as we can.

There’s some good news. Despite all the uncertainty in the markets, you can still strategize your way to a great first mortgage in real estate investing by following these very basic tactics:

Strategy One: Build or rebuild your credit. Educate yourself with some good basic information about how credit reports work. If you don’t know your credit history, make an online visit  to Experian or Equifax. If you don’t have a credit history established yet, start by getting a credit card, using it, and making your monthly payments in full. Then take the next step by getting a loan and paying it back reliably. In less than two years, you can establish a record of excellent credit-worthiness.

If buying and holding new houses is your strategy for investing in real estate, this could be your lucky day. 

Thousands of new homes are on the market - and they are selling for record low prices. Here's what the Associated Press reported yesterday:

• 981,000 new homes sold in April. That’s a jump of 16.2 percent over April of last year - the biggest one-month jump in 14 years.  
• But at the same time, new home prices are tumbling. The median price of a new home fell 11.1 percent between March and April alone. As the AP article explained, “The big price decline indicated that builders are slashing prices in an effort to move a huge overhang of unsold homes.”

The handwriting is on the wall, written with a broad brush. This is a great time to buy a newly constructed home - or a block of them - for a rock-bottom price. But to take advantage of this opportunity, you need two things:

First, financial resources. If you are prequalified for a mortgage or have cash in hand, you will be just the kind of buyer that sellers are looking for. You’ll be able to move fast, negotiate hard for the lowest prices - and leave unprepared buyers far behind.

Second, current knowledge. Actually, the boom the AP reported was just a small tremor in some parts of the country. The strongest sales uptick - 27.8 percent - occurred in the South. But in the Midwest, sales actually dropped by 4 percent. So knowledge is power, and you can’t fly blind.

But if you know how to arrange powerful financing and negotiate deals like a pro, make no mistake about it. These are days of unprecedented opportunity for investors. And if you are simply looking for a nice new house for yourself and your family, now could be a great time to make your move.

The New York Times Book Review ran a comprehensive and well-researched articled about two years ago called Ghosts in the Machine, about ghostwriters and co-authors throughout history. There were books mentioned by Charles de Gaulle and Andre Malraux, Thomas Mann, and other notable people, and it ended with a critique of Donald Trump’s books. This critic concluded that his books were seamless, and despite having different co-authors, all of his books over the past eighteen years had retained the exact “Donaldian” voice of Donald Trump - which the critic considered to be “an astonishing achievement.” This was high praise coming from the New York Times.

But to me, this is not such a big mystery, and I can tell you the reason for that “seamlessness” of tone is that Mr. Trump is a colorful writer - and speaker - who   has an active part in the writing of his books. His books tend to be as lively as he is. I remember writing back to the critic to explain this aspect of his book writing, as he had assumed that all busy people had the attitude of “You do the work and I’ll watch” or “I’ve got the dinero, go fetch the Camaro” to quote the article precisely. I am especially fortunate in that I’ve learned a great deal from Mr. Trump not only about business, but about writing. For example, he makes the real meaning of the words succinct and cogent a tangible discovery, as in “get to the point” and - get there quickly and convincingly. It’s a great time-saving device for thinking, writing and delivery, and for life in general. He gets things done quickly, so he is capable of doing a lot of things because he knows how to use his time efficiently and effectively.

His work ethic is legend by now, but I will say there are some people who remain fixed on the Midas touch image. I was embarking on a trip one day and had a driver pick me up at Trump Tower, where our offices are. The young man, a disc jockey from India who was visiting the US, enthusiastically informed me that it was his first day as a driver, that I was his first passenger, ever, and that this trip would mark his first trip to the airport, ever. I didn’t want to be impolite, but I did want to get to the airport, so I asked if he knew where it was. He said he knew the general direction, but what he was really interested in knowing is if I’d ever seen Mr. Donald Trump. So I said, “Yes, I have.” He got very excited and asked “WHEN??” and I said “About five minutes ago.” He was stunned. “You saw Donald Trump five minutes ago? In Trump Tower?” So I explained that his offices were there, and that we worked there. He said “He WORKS there?” and right away I got it - his perception that Donald Trump lives in a penthouse, takes his helicopter to his jet, takes his helicopter back to his penthouse - but his feet don’t really touch the ground,  let alone carry him into an office where he might actually work!

This guy was so astounded that I had to remind him that we were trying to get to the airport, which we eventually found, but in the meantime I had to give him a detailed account of this so-called “office,” where I worked, because he was incredulous to the point of disbelief, like I was making it up. So I explained to the young man that yes indeed, Donald Trump has an office where he keeps very long working hours, and gave him a description of an average 10 or 12- hour day--the average for Donald Trump--and told him we had post-its and pencils and fax machines like any other office has. He was duly impressed and loved all the details, like Mr. Trump eating lunch at his desk because he doesn’t want to interrupt the momentum of the day,  turning the lights off in his office whenever he left to save on electricity, and not using an intercom because it wastes time.

This was a rather rollicking trip to the airport, which ended up being enjoyable for both driver and passenger.  I was also given some great insights into the perception of Mr. Trump and it remains a helpful episode now that we are writing Never Give Up about the trials and tribulations that even a mogul faces now and again. Actually, more like every day.

Just a few days ago I was speaking to Andy Weiss, EVP of Construction, who has worked at the Trump Organization for 26 years. Andy’s a pro all the way. I was asking about the Chicago project (The Trump International Hotel and Tower/Chicago), as I’d heard the architect had recently resigned from his firm, and therefore from the project, which was just another “little problem” that crops up regularly in the course of getting things done. However, the Chicago project is a huge one. It will be 92 stories high, the second tallest building in North America, and 2.7 million square feet. This project has had its share of dramas, including a leak coming in from the Chicago River, losing partners to a corporate scandal, and so on. But the development team here is indomitable in the face of obstacles, and even though the building isn’t finished yet, it’s already an incredible sight. I went out last October when Mr. Trump was speaking at the Learning Annex, and took the architecture boat tour of the city, and when you come around the corner and see this incredible building soaring into the sky, it will stun you. It’s that’s beautiful. Be sure to see it if you visit Chicago.

But these little glitches - or huge glitches when you consider the size of Mr. Trump’s projects - are to be expected. I’ve noticed they’re dealt with quickly and efficiently - succinctly and cogently - and whether you’re a writer, a student, a lawyer, or a tycoon, time matters. Learn to use it effectively.