This Issue: Avoid the Mistakes that Kill First-Time Property Investors

One of the biggest challenges candidates face on The Apprentice is managing difficult teammates. Even the most talented of project managers often struggles when he or she has to lead individuals who are disliked or disruptive. It drains energy from the rest of the group and it can make the work environment a divisive one.

Recently, a combative candidate Marisa was blamed for the downfall of her winning team. She fought ... perhaps too strongly ... for her own ideas and, in the process, alienated and annoyed the rest of her teammates. When it came time to point fingers for the team’s loss, every single member of the group blamed Marisa. Whether she deserved all the responsibility or not, she got it because the rest of her team couldn’t stand her.

If you’re in a leadership role, there are some keys to managing people you dislike. The obvious is to find something that you do like about them. Everyone has hidden potential and a good manager will find it. Good managers will also look for qualities that they like about the people around them ... what they have in common can be used to build strong relationships.

It’s obvious that no one is perfect. We all have strengths and weaknesses. It’s your job as a good leader to recognize the strengths instead of becoming obsessed with the weaknesses.

Donald J. Trump, Chairman of Trump University, shares his insights in many of our courses, including The Real Estate Investor Training Program.

A Note to Apprentice Fans

Because there was no televised episode of The Apprentice last night, there will be no --What I Learned-- article from Paul C. Quintal this week. Look for Paul's next installment a week from today.

Is it a great time for real estate investing? Or is it a terrible time?

Today and every day, those are difficult questions to answer. Some things are bad about the current market ... we’ve all read that housing starts are down and that there are many houses sitting unsold on the market. But we are getting a very mixed message. Just last week, the Mortgage Bankers Association predicted a strengthening market by mid-2007. Of course, that’s good.

So is it a good time to invest, or a bad time?

I have a simple answer. It is a good time for real estate investing... a very good time ... if you know what you are doing. If you have the knowledge and the skills to structure deals that take advantage of the opportunities in the current market and minimize the dangers, then real estate still offers a formidable way to amass wealth.

We get comments from Trump University members almost daily that reflect the fact that people who know what they are doing can structure smart deals today. Here’s one such comment posted on this blog just last week, on February 1.

--Location Location Location!-- You always hear that when looking to purchase property; let me explain my --deal of the century-- that worked.
I found a single family home in an excellent location for sale by owner. The price was a steal and I asked the sellers to carry part of the mortgage for five years at 7.5%. With a small down payment, they agreed. They financed half the asking price for five years with a balloon payment for the rest at the end of five years. I payed the principal and interest every month and banked the rest of the rent after taxes and insurance. I had enough in the bank at the end of five years to make the balloon payment. The balloon payment was interest free! The house is generating a handsome profit that I'm putting into an IRA every month! The house sits in proximity to some of the best commercial property locally. In years to come, it'll be a real gem!

So you see, making the numbers work and knowing your regional market can help investors make great deals today, or at nearly any other time.

One thing is certain. You will never make a dollar in real estate investing if you stand on the sidelines waiting for things to be exactly right for you to take the plunge as a real estate investor.

I’d encourage you to review all the estate courses offered at Trump University, especially The Real Estate Investor Training Program. A success story like the one I shared above is in your future, if you want it to be. But first, you need to jump in the pool!

Donald Trump is back with a new book. In Trump 101, The Way to Success, the real estate magnate who became a legendary figure in the business world pulled yet more advice and hints from his hat for those who dream of professional success, and who knows, maybe accumulate a few $million, or $billion along the way. And as always happens when a book of this nature reaches the stands, the question everyone asks is: Is it really possible to learn something from a book like this?

I may be able to answer that question by speaking a little of my own experience. Throughout my entire professional life, there have always been those I consider mentors. These are professionals whose examples inspire me and continue to inspire me. Being able to live with these mentors has provided me with an invaluable learning experience. With them I was able to learn what is not taught in school; practical lessons in life and work that showed me how to overcome obstacles and succeed. Donald Trump was one of those people. When I looked him up to sell him my idea about building a real estate venture in Brazil, I was given a true lesson in how to negotiate. This lesson, incidentally, was motivation I put to good use when I wrote a book called You Have 3 Minutes! Learn the Secrets of the Pitch from Trump's Original Apprentice, published in the US by McGraw-Hill and now translated into more than 10 languagues.

Of course, we do not always have the opportunity to accompany these people up close and absorb firsthand what they can teach us. But that is why books exist. So, returning to the initial question, yes, I do believe it is possible to learn something from books like Donald Trump’s. Obviously, I am not saying that by simply reading the book you are guaranteed to become as rich as Donald Trump. What I am saying is that after reflecting, digesting and adapting what he has to say, you may get a new insight into solving an old problem, or you may get uplifted and be able to get back up on your own two feet and continue your march forward. Or you may begin to question your methods and imagine new ways to proceed. And if any of these possibilities truly happens, then the book will have served its purpose.

When Trump speaks about things like thinking big or being passionate about what you do, skeptics rush to accuse him of creating a list of obvious ideas. The fact of the matter is, there is no secret and bombastic ingredient capable of making someone an instant success. From this perspective, the greatest revelation in Trump’s book is to show that the ingredients for success are always the same: determination, passion, enthusiasm, effort, and hard work. How to manipulate them and use them in your favor, with utmost efficiency, is what really makes the difference. And that is something only those who do it can teach.  

When you investigate properties to buy, look ahead. What will their neighborhoods look like in the years and decades to come?

Take a close look at what needs improving, because the problems you see are opportunities. The more of them you can correct, the faster your property values will soar. 

With the help of other property owners in the area, you can make improvements like these:

Improve traffic patterns. Would a stoplight, a revised parking plan or a new arrangement of one-way streets be an improvement? Would closing off some streets or making them dead-ends make it harder for motorists to speed through carelessly?

Increase public transportation. Something as simple as a new bus stop on an existing route can dramatically improve the quality of life for residents who commute.

Attract businesses. New retailers and restaurants inject new life into any neighborhood and halt decline.

Beautify. Start a civic organization to plant trees and shrubs in public areas. Find ways to eliminate or improve properties that have become eyesores. “Curb appeal” applies to a neighborhood, not just one home. 

Change zoning. If you can prevent people from breaking single-family houses into apartments, for example, you can boost the value of other properties in the area.

Fight for better schools. Excellent or improving schools attract families and developers who specialize in family-oriented properties.

Improve safety and security. Pressure the city increase police presence. Make sure that street lamps are working and urge city hall to install new ones if needed. Meet with the school board and have them install speed bumps on streets were schools are located.

Organize neighborhood celebrations and events. They offer a great way to generate word-of-mouth “buzz” about the fact that your neighborhood is safe and good for families.

Promote the neighborhood. Talk it up with your friends. Get a local newspaper to write about improvements.

Get help. Mobilize mortgage lenders, businesses, other property-owners, religious institutions, police, elected officials and civic associations. Get them behind your efforts to improve. 

We have all heard that location is critical in real estate. But location can mean many things. If you can improve a neighborhood, the value of the properties you acquire in it can double or triple in only five or 10 years. That’s an especially attractive strategy for real estate investors who aren’t yet ready to buy expensive properties in upscale locales.

This blog post is adapted from Trump University Real Estate 101 by Gary W. Eldred, PhD. Dr. Eldred is the professor for Trump University’s Real Estate Investor Program. Classes are now forming.