Trump University Real Estate 101: Building Wealth with Real Estate Investments

How to Become A Real Estate Entrepreneur

To Mr. Trump, the characteristics that lead to success include the following:
1. Think positively: It's your choice. You can find excuses or you can accept responsibility. You can find those who will complain with you. Or you can surround yourself with people who believe in what you (and they) can do, not what you can't do. Your attitude gives wings to your wants and goals.
2. Don't do it (just for) the money: "Choose your goals so that you can pursue them with passion and enthusiasm," says Mr. Trump. "You will hit tough times. Your passion and enthusiasm will keep your momentum. Your passion and enthusiasm, your sense of accomplishment will get you over, around, under, or through those brick walls that will undoubtedly stand in your way. With enthusiasm, problems provide you a challenge, not a reason to quit."
3. Set the standard: "Ask yourself," says Mr. Trump. "What standards would you like to be known for? What standards will exceed what your customers want? My father set great standards for his bread and butter houses and apartments. When I built Trump Tower, it opened to wonderful reviews, and established itself as a landmark building. Like my father, I set and then surpassed my standards, and in a big way."

Simply stated, these three Trump principles will guide your entrepreneurial success:
(1) develop and nurture positive habits of mind,
(2) enjoy the money,
but motivate yourself with passion and enthusiasm, and
(3) set the standard that pleases yourself, your customers, and forces others to follow.

Compete with yourself to be the best you can. Entrepreneurs know that competing with others lowers their standards.

Magnify Your Favorable Odds
Encountering an obstacle doesn't necessarily mean going through it; you can try going around, under, or over it. I never give up until I've exhausted all of my possibilities.

Guide Your Life with Entrepreneurial Principles
So here's our thoughts on how you can become a top-gun real estate entrepreneur:
1. Elevate your attitudes.
2. Program your positive self-talk.
3. Dig your well before you're thirsty.
4. Curtail your destructive spending and borrowing.
5. Plan your time, shape your life.
6. Honor your appointments, promises, and agreements.
7. Learn continuously, improve continuously.
8. Make great decisions.

Elevate Your Attitudes
"Your attitude determines your altitude." To achieve large goals, think positive, think big.

Program Your Positive Self-Talk
Have you let the following (or similar) types of self-talk stifle your wealth-building possibility thinking?
 I should have invested earlier; interest rates are heading back up.
 I'll never be able to come up with the cash necessary to invest.
 There's no way we can cut our spending. We're going without now.
 Property is no longer a good investment.
 The world is full of haves and have-nots. I'm a have-not.
 At these prices, it's cheaper to rent than own.
 There's not anything out there I like that I can afford.
 My credit score is too low.
 My bills are too high.
 Our generation has it tougher than those who came before us.
 None of my friends has money to invest.
 It's too late. People who bought earlier were lucky.
 I hesitate to invest. I hardly know the first thing about it.
 I don't know any real estate agents, loan reps, or investors.
 Sure, I would like to buy property, but I don't have the money.
 Sure, I would like to invest someday.

Negative Self-Talk Blocks Positive Fact-Finding
Every time a negative thought comes to you, zap it. Replace it with a positive thought. This takes energy, but the result will be stamina—positive stamina, a necessary ingredient for success.

Reprogram Your Self-Talk Tapes
 What are six ways I can save more?
 What are six ways I can cut spending?
 What are six ways we can increase our income?
 What kinds of finance plans allow me to invest with little or nothing down?
 What are four ways we can overcome our credit problems?
 Who can serve as role models or mentors for us?
 Who do I know who can recommend a real estate agent who works with investors?
 What leading economic indicators are positive?
 What types of finance plans permit lower monthly payments?
 Where are the lower-priced up-and-coming cities and neighborhoods?  Where and how might we find bargain-priced properties?
 What techniques are available to make investing easier?
 How can I persuade sellers to offer financing?
 Where can I find below-market interest rates?
 Who could I get to help us invest: parents, family, friends, investor, employer, co-owner, Donald Trump?
 What are 10 ways I could create value for this property or neighborhood?

Dig Your Well before You're Thirsty
No one makes it alone in real estate. You need a network of relationships with loan reps, real estate agents, title companies, property inspectors, lawyers, zoning/building regulators, handymen, contractors, and, of course, sellers, tenants, and, at some point, buyers.

Curtail Your Destructive Spending and Borrowing
Entrepreneurs know differently. To achieve wealth and financial freedom, ration your spending and eliminate destructive debt. If you earn $60,000 a year, live on $40,000 (or less). If you earn $100,000, live on $60,000 (or less). Never borrow to finance new cars, clothes, jewelry, travel, entertainment, or other affectations of the "good life." Only use your credit cards for convenience. Never use them to borrow money to finance what you otherwise can't afford.
Want to impress your bankers or property sellers? Do it with your strong credit score and financial statement, not a new Mercedes, a prestigious address, a Rolex watch, or an Armani suit.

Plan Your Time, Shape Your Life

Your Three "Budgets"
Everyone faces a mental budget, a money budget, and a time/ activity budget. Your mental budget refers to how well you allocate your thoughts, attitudes, and beliefs. Do you program your mind with negative self-talk, self-imposed limits, and puny aspirations? Or do you affirm and explore expansive ideas and creative possibilities? As to money, do you favor consumption over investment? Or do you discipline your current spending and destructive borrowing to ensure a prosperous future?
Ideally, up to this point, you've inventoried and reformed your dominating attitudes and beliefs. You've figured out how to allocate your finances more profitably. Now, inventory your hours.

Honor Your Appointments, Promises, and Agreements
We encourage you to build productive, quid pro quo relationships. To obtain insightful information, referrals, and recommendations, provide others with information, referrals, and recommendations. But your successful career requires something more: dependability. When you agree to perform, perform as agreed.

The lesson: Distinguish yourself from the weasels, sharks, and pretenders. Establish your dependability. If your appointment is set for 9:00, show up at 8:55. If you shake hands on an agreement, don't try to extract a later concession without quid pro quo. If something changes and you must amend or default for good and unavoidable reasons, draft a revised plan of commitment that you can honor. Once you prove that others can count on you without worry or suspicion, I guarantee that good deals will seek you.

Learn Continuously, Improve Continuously
Search for Possibilities


Offer Your Customers What They Want

To attract and retain good rentpaying tenants, you must offer tenants something better than your competitors (remember the MVP goal). To achieve this objective, the Trump team (among other things), created a new set of features and benefits:
1. Eliminated bad tenants. Bad tenants drive out good tenants. If you don't quickly deal with problem tenants (or the problems that tenants present), you'll soon find that your entire property has turned into a money pit of vacancies and repairs.
2. Beefed up safety and security. It's not just the rich who care about safety and security, all decent people want to live free of hooligans and drug dealers. The Trump team initiated safety and security measures that included a grounds patrol.
3. Improved the aesthetics. Good tenants want to live in a home that shows pride of ownership. When serving the less well off, many property owners forget this fact. Mr. Trump thought differently. So, he attended to not just big ticket maintenance issues. He also cared enough to add special homey touches such as white shutters, colonial white doors (to replace the ugly, cheap aluminum doors), and an impeccable cleaning program.

Search for Competitive Advantage (Create Your MVP) (most valued property)
To create an MVP, intelligently survey and inspect competing properties. This market knowledge helps give you the insight you need to strategically customize your properties to make them stand out from competitors. When you adopt this MVP approach, you add to your profits (and to the value of your properties) for two reasons:
1. Better Resident Relations: The residents of your properties will reward you with lower turnover, fewer problems, and higher rents.
2. Alert to Opportunities: With a customer-oriented, constant improvement attitude, you will consistently look for and come up with ideas that will add value to your property operations.

You can create a prestige effect with any property. Just make it the best of breed for your market segment.
 Views.
 Energy usage/efficiency.
 Square footage (rentable, usable).
 Natural light.
 Ceiling height.
 Quiet/noisiness.
 Parking.
 Room count.
 Appliances (quality, quantity).
 Landscaping.
 Quality of finishes.
 Heat/air-conditioning.
 Decks/patios/balconies.
 Cleanliness.
 Carpeting/floor coverings.
 Electrical outlets.
 Emotional appeal.
 Color schemes/aesthetics.
 Living area floor plan.
 Closet space.
 Storage space.
 Kitchen functionality.
 Entryway convenience.
 Tenant demographics.
 Tenant lifestyles, attitudes.
 Lighting.
 Security.
 Laundry facilities.
 Fireplace.
 Physical condition.
 Window coverings.
 Types/style of windows.
 Image/reputation.
 Furniture.
 Kitchen pizzazz.

This checklist doesn't mention other important tenant concerns, such as the amount of the security deposit (total move-in cash), the terms of the lease, the quality of the management, and, last but far from least, location.

What's Your Overall Impression?

Pay Special Attention to Kitchens and Baths
As you inspect these key rooms, focus for at least 30 seconds on each of the following:
 Floors.
 Ceilings.
 Sinks.
 Toilet bowl.
 Windows and windowsills.
 Electrical outlet plates.
 Lighting.
 Faucets.
 Walls.
 Cabinets.
 Cabinet and drawer handles.
 Appliances.
 Countertops.
 Mirrors.

Cleanliness Generates Profits

Natural Light and Views
Add a view, add value. We built Trump tower with a spectacular design to give commanding views that gave us commanding power to sell apartments at prices that towered over competitors.

Special Touches
For those special aesthetic touches, accent with chair railings, wallpaper borders, upgraded door handles, paneled doors, and wood stains (rather than paint). Upgraded light fixtures, too, can help you add pizzazz. The newer track lighting systems have gained popularity with some market segments.

Safety, Security, and Convenience
Increase the number and capacity of electrical outlets.
Peepholes for entry doors also match up security with convenience. Many people like to learn who's there before they open their door.
Other safety issues of concern include smoke alarms, carbon monoxide detectors, fire escape routes, door locks, first-floor windows, and first-floor sliding glass doors. As security against break-ins, verify that all windows and doors lock tightly and cannot be jimmied with a credit card or even a screwdriver.
Double-deadbolt locks are best.

Stairs, Carpets, and Bathrooms
Repair steps or stair railings that may be loose or dangerous. Frayed carpets and bathtubs that lack no-slip bottoms and handrails can result in falls.
Itemize and remedy each safety and security hazard within the property.

Rightsize the Rooms
Create a Sense of Proportion

Create More Storage
To add appeal to your rental houses and apartments, add storage space. You can add storage space in two basic ways:
a) Bring dead space to life.
All houses and apartments include opportunistic quantities of dead space that you can bring to life:
 Under stairs and stairwells.
 Bay windows with storage built under the window seat and under the outside the window.
 Garden windows.
 On top of kitchen cabinets.
 Dead-end cabinets.
 Walls suitable for shelving.
 Recessed storage between studs (as with an in-wall medicine chest).
 Kitchen hanging bars for pots and pans.

b) Increase the usefulness of existing space.
As ideas from this innovative firm have proven, you can double (or triple) your storage capacity without adding one square inch of new space. Redesign space that already exists.
In addition, multipurpose some space. For example, install a Murphy bed that folds up against (or into) a wall. A Murphy bed not only adds usable floor space but also creates possibilities for shelving alongside the bed. Use the existing wall cavity or create a larger cavity by bringing a new wall out even with the Murphy bed. Thoroughly inspect and note each opportunity a property offers to use space more effectively—both for storage and livability.

Abate Noise
Check for Neighborhood Noise
If you invest in the property, can you invoke noise ordinances against these noisy tenants (or home owners) who show no respect for anyone else? Can you add features to the property (soundproof windows, heavy doors, more wall insulation, or tall, thickly growing hedges) to abate noise from either outside or inside the building? Suppress noise and you strengthen your MVP.

Overall Desirability: Summing Up
To build a great brand, be conscious of the image and the quality of the product. Trump Tower was focused not only on location, but the quality of the building—the windows, floors, rooms, kitchens, the whole thing.

To create an MVP, provide people a home. As you survey a property, imagine whether the units will live well for your target market:
 Do the units offer enough square footage?
 Are the units spotlessly clean, fresh, and bright? Do they smell clean and fresh?
 Do the room counts and room sizes represent the most profitable use of space?
 Do the aesthetics of the units excite with emotional appeal?
 Does the unit bring in enough natural light?
 What views will the tenants see from inside the units looking out?
 Do the units offer generous amounts of closet and storage space?
 Are the units quiet?
 Will tenants feel safe and secure within the units?
 Do the kitchens and baths offer eye-pleasing pizzazz?


For more Information
* Real Estate Investing, Strategies for Real Estate Success, Investing In REITs, The Real Estate Agent's Guide, The Real Estate Investor’s Pocket Calculator*

Trump University Real Estate 101: Building Wealth with Real Estate Investments