Posted by George (OH) on January 22, 2000 at 06:26:30:
-nt-
Donald Trump - Posted by George(OH)
Posted by George(OH) on January 21, 2000 at 08:58:31:
I recently finished reading a book about the King of Flashiness; it wasn’t “The Art of the Deal”; it was something like “The Deals, The Downfall” written by someone else. Anyway, the book goes into detail about his many real estate transactions, as well as his father’s, who was a success in his own right, maybe more so than Donald.
My question to the “masters” of this site is how does Donald’s dealings, although large-scale commercial, relate or compare to what most of us on this site are trying to accomplish? According to the book, it seemed that Donald did a lot of deals by using his and his father’s credit, as well as manipulating property values to his advantage. I just thought it might make a good topic for discussion.
In light of the recent posts regarding J LaVerdi’s question, I realize that this won’t bring me closer to a deal; I just like to hear the opinions of professionals at this site. (smile)
Thanks,
George
Just read “Art of the Deal” - Posted by Steve (FL)
Posted by Steve (FL) on January 21, 2000 at 11:39:49:
(picked it up at Wal-Mart for $5, read it, and sold it at work for $5; now that’s a deal!)
The man is ruthless and cold, but he is saavy. I highly respect what he’s done, and I agree with Ed; he does what we’re all doing/trying to do, but on a much larger scale. He was just able to start with bigger deals thanks to his partner (father). No reason why anyone can’t do the same thing.
Re: Donald Trump - Posted by ray@lcorn
Posted by ray@lcorn on January 21, 2000 at 11:36:46:
Hi George,
I’ll throw in my two cents on “The Donald.”
In my opinion, if you strip away all the hype and ego, Trump is first and foremost a consummate dealmaker. Since that is my chosen vocation, I pay attention to those I consider masters of the craft. Trump is in the top five on my list.
There are a number of interesting sides to Mr. Trump, but the one that speaks to me the loudest is his absolute confidence in his abilities. Read the account of rebuilding the Rockefeller Center ice rink related in “The Art of the Deal”, and you will quickly see that Trump takes no prisoners when he has an objective to accomplish. I admire that, and aspire to the ideal of letting nothing stand in the way of reaching my goals.
Trump’s book had a direct influence on the completion of my first large-scale (for me) commercial deal. In the late eighties my dad was dealing with Wal-Mart on a piece of land in a city that we had been in business in for many years. This particular piece of land was on Main Street, and had a mobile home sales lot, a motel and a laundromat on it, all of which our companies owned and operated. Wal-Mart wanted to build a store there, but negotiations had stalled. They were requiring that a power line easement be extended up one side of the property, and the location of the easement was about thirty feet into the laundromat building, which was to be retained by us as an outparcel. It was an existing line built without an easement, but Wal-Mart needed to increase the size of the line and formalize the easement. With a recorded easement, if the laundromat building were to be destroyed it could not be replaced, which would severely restrict use of the outparcel. To move the power line was cost prohibitive (~$100,000), and the boys from Bentonville made no bones about the fact that they would walk from the deal unless they could get the easement, or move the power line at no cost to them. My dad had dug in his heels and said there was no way he was going to grant an easement over top of a building he owned, and he d*mn sure wasn’t going to pay a hundred grand to move it.
I had just come back to the family company after several years of self-imposed exile, and my dad handed me the deal and said if I could get it closed I could earn a pretty substantial commission. This was the first million-dollar deal I had ever participated in, so I was pretty excited. But when I talked to the Wal-Mart people, they were just as stubborn as my dad was. There seemed to be no middle ground between the parties. I had just read Trump’s “The Art of the Deal”, and happened to think back to his story of how he acquired the property to build Trump Tower in NYC. If you read it, you know that he used “air-rights” to gain control of the critical pieces of property for his building. I had learned about the bundle of rights with real estate way back when, but I had never thought about using them separately. I had a flash of insight that suggested I investigate whether this could apply to this deal.
I met with the power company and explained the dilemma. They confirmed that they either had to have an easement or move the line. I asked if we could give them an “air-right” to string their line between the two poles on each corner of the property, without an easement on the ground (over top of the building). The concept of an “air-right” was as novel to them as it was to me, but after some deliberation they agreed. They added a condition that we would have to pay for an attorney draw up the appropriate language to convey the air-rights, and an opinion that this indeed was an appropriate (legal) easement. I had to educate the attorney to the concept as well, but the deal got done, I got my commission, and that Wal-mart store is still on that parcel. Thank you Mr. Trump!
My favorite Trump quote:
“I like thinking big. I always have. To me it’s very simple: if you’re going to be thinking anyway, you might as well think big.”
ray@lcorn
Re: Donald Trump - Posted by Mark (SDCA)
Posted by Mark (SDCA) on January 21, 2000 at 11:23:07:
I think it relates reasonably well. Here are 2 examples (from the Art of the Deal).
He took an option on some Manhattan raw land. (I think this was the Penn Central land). Anyone ever talk options on here?? He put down a tiny amount (relatively anyway… I think it was 500K… hahahah).
And on one of his casinos, he tied up the deal and Holiday Inn approached him about partnering. They would put up X dollars (all that he had in the deal) and they would split the profits 50/50. Anyone on here ever talk about how long your money is going to be in a deal?
Obviously, there are differences. He is a builder and a developer, neither of which gets much play on here. And the scale is vastly different. But the concepts are the same.
Re: Donald Trump - Posted by Terry Vaughan
Posted by Terry Vaughan on January 21, 2000 at 10:44:37:
In his first book, he contracts to buy a building in manhatten, puts a new loan on it, which turns out to be $600,000 more than he paid for the building. Now I would call that creative financing!
He gets into trouble with his casino. He trades discounted fannie Mae mortgages (at FACE VALUE, bought at “cents” on the dollar) to the banks to retire his over due loans.
Yep, he’s a player!
Re: Donald Trump - Posted by Ed Garcia
Posted by Ed Garcia on January 21, 2000 at 10:13:15:
George:
I wouldn’t classify your question with Jims.
I don’t think Jim meant to, but some people may have felt that his question
was a little personal. I’m sure Jim was trying to just take a censes that he
felt would be inspirational.
My personal feeling about Donald Trump is that,
You think you’re a Player, until you meet a Player.
Donald Trump with out a doubt, is a Player.
A man like that can be an inspiration to THINK BIG. Yes he was
resourceful, but we can do it too.
Just remember one thing George,
You can do, what ever you think you’re big enough to do.
Your only limitation, is you.
I’m glad you brought his book up, I think I’m going to go out and buy it.
Ed Garcia
Re: Just read “Art of the Deal” - Posted by Jimmy
Posted by Jimmy on January 21, 2000 at 22:44:24:
Actually Trump’s father was not the catalyst to jump start Trump’s career. His projects in the beginning were funded by “other” resources.
When you look at these… - Posted by George (OH)
Posted by George (OH) on January 21, 2000 at 13:15:22:
types of deals (large-scale, commercial development), it really makes what we at this site (most of us, anway) try to do look trivial by comparison. I love to see the particulars of deals and the insight of big “players”; it gives me the inspiration and lets me know that doing something “little” like flipping a SFH for a 3-5K profit is well within my reach.
Thanks for your post, Ray. You’re a true PLAYER! I think all of us newbies would do well to find other players on this site, as well as attend the convention, and put those ideas and practices to work ourselves.
Thanks to all who responded,
George(OH)
Re: Just read “Art of the Deal” - Posted by John P. SFL
Posted by John P. SFL on January 24, 2000 at 07:21:51:
The Donald used his dads resources to jump start his career. The Donalds dad also was involved in multifamily dwellings which the family still owns. Try renting an apartment in Flushing Queens and see hom many!
John P.
A transplanted New Yorker.
Re: Just read “Art of the Deal” - Posted by David Alexander
Posted by David Alexander on January 22, 2000 at 24:34:56:
He started off with money from his dad.
David Alexander
Re: When you look at these… - Posted by ray@lcorn
Posted by ray@lcorn on January 21, 2000 at 16:16:42:
George,
Don’t ever let yourself feel trivial in comparing deals. The same tactics go into leasing a single family house deal as in negotiating a lease for a commercial building. The size of the deal has absolutely nothing to do with proficiency. The only limiting factor is your attitude toward your deals. If you are a professional, deal in honesty with respect for all you meet, and run your business so that you wouldn’t mind the details on the front page of your local newspaper, then in my book you are a player. Notice that none of those criteria says a thing about deal size. It is irrelevant.
If you develop a comfort level with larger deals, you may want to pursue them. I like big deals, just because that is what I like. I’d rather have a few big paydays than many smaller ones. That’s just me, and does not make me better or worse for pursuing my preference, or you for pursuing yours. If you think you would like to try bigger deals, then put yourself in the position to learn how they are done and what they require. Funny thing, that is exactly what I will be discussing at the convention in Atlanta!
I know many people that are very proficient, and could negotiate and close a deal of any size that they choose, but they do what they enjoy the most. And that is as it should be. I would certainly consider them as fellow dealmakers. And I would not pass up the opportunity to listen to them to learn how they do what they choose to do. Dealmaking is not limited to the size of a deal, or even to real estate. It is a mindset. If I, or anyone else, can develop the mindset of making deals where others can’t, then by virtue of my participation in the marketplace I am a “player.”
Now go make a deal!
ray@lcorn
Re: Just read “Art of the Deal” - Posted by Pierre
Posted by Pierre on January 27, 2000 at 12:30:12:
The small projects may have been funded by his dad,
but the large projects in Manhattan were funded by "other’ sources. Donald nor his dad had that kind of money. Also omne must connected with certain circles
in order to make certain purchases in Manhattan no matter how much money one has.
Re: Just read “Art of the Deal” - Posted by Pierre
Posted by Pierre on January 27, 2000 at 12:23:35:
He may have stated with his Dad’s help, but the big
investments in Manhattan were funded through “other” sources. Donald nor his dad had that kind of money to
fund the first big projects in Manahttan.