You Can Learn Tips On Buying Foreclosures From Donald Trump
Love him or hate him, Donald Trump is one of the most recognizable faces in real estate investing. His real estate portfolio that started in New York has grown to a multinational conglomerate that is the envy of most real estate investors across the globe. While you may not be ready to put your name across a skyscraper adjoining the NYC skyline just yet, there are tips and techniques from “The Donald” that you can integrate into your real estate business that will prove beneficial as you start buying foreclosures.
The Most Important Part When Buying Foreclosures
The first thing you should be doing when you are buying foreclosures is drafting a business plan for the property. As George Ross, one of The Donald’s legal advisers, stated in his book, Trump Strategies for Real Estate, this was the first thing Trump would have his staff do as they looked at investment merits of a particular piece of property. What should you focus on when writing out your business plan? Anticipated costs, available financing options, estimates of income, and projected timelines are all good places to start. After that, design the most important part of your plan when buying foreclosures- your exit strategy.
A famous saying that you may have heard is: “People never plan to fail, they only fail to plan.” The truth is, you always have a plan whether you know it or not. You either design a plan beforehand, or you plan by default, i.e. make one up as you go along. This is akin to a chicken running around after its head is cut off. If you treat buying foreclosures as a business and design a plan, you will be able to see the deal from all possible angles, and therefore have a much greater chance of making it work and most importantly, maximizing your profits. Be prepared, and write that business plan before you start any negotiations.
Create Win-Win Situations When Buying Foreclosures
We all know Donald Trump likes to talk about the great deals he makes, but what makes them such great deals? Ask yourself this: would Trump keep getting great deals if people were thinking they were being taken advantage of? Of course not. Trump realizes that to keep getting that “great deal,” you need the other side to think they are getting a “great deal,” too. By creating win-win situations, both sides can think they are involved in a great deal and that gives you the opportunity to make huge profits buying foreclosures.
When you are buying foreclosures, negotiating with homeowners who are in distress, what they may need and what you want may not be aligned. They may just need some extra time to get their affairs in order; maybe they need some help in relocating. We’ve had tremendous success in buying distressed notes, and property owners have been happy to deal with us in selling their deeds for little money as we forgave their debt and gave them a chance to start fresh. When you are buying foreclosures, sometimes your creativity in getting them what they need, will give you what you want.
Keep Expenses In Line When Buying Foreclosures
Now that you’ve negotiated your property, and bought your foreclosure, what’s next? Let’s look again to the man with the famous hair. Donald Trump shot to fame in the 1980’s when he took over Wolman’s ice skating rink in Central Park. New York City had closed the rink for renovations in 1980 that were supposed to be completed in 2 ½ years. By 1986 the job was not complete. Trump took over the project and completed the major work in 4 months, under budget and opened 1 year ahead of schedule. How? By keeping his contractors on a timeline and holding them accountable. You need to stay in constant contact with the professionals you brought in at the beginning and make them hold the line on costs and their timeline. Managing your property and project is vital to your business, otherwise, it runs the risk of ruin.
Extra costs in construction or costly delays could mean the difference between huge profits in your foreclosure business or losses that can absolutely be avoided. If you want to be like Donald Trump when you are buying foreclosures, may sure contractors keep to their timeline and stay on budget.
You Don’t Need To Be Born Into The Business Of Buying Foreclosures
We might not all have been born to a father who was a successful builder, with a large network of industry wide contacts, but there are tips and techniques that you can take from Donald Trump that will work whether we are buying a large commercial building in Manhattan or buying foreclosures in a market like Phoenix, Arizona. Start with an effective plan, negotiate a great deal and keep a close eye on your project’s progress, and you will on your way to running a successful and lucrative business buying foreclosures.