Lessons from US president-elect Donald Trump on how to outwit real estate “pretenders, wannabes, sharks, shirkers and weasels”.
“Real estate attracts more than its share of fakes, pretenders, wannabes, sharks, shirkers and weasels,” warns Trump in the second edition of Real Estate 101, a 2009 Trump University publication. Indeed, Donald, indeed. “Distinguish yourself,” advises the president-elect. Concentrate instead on “entrepreneurial investing”, which “works in all times and all places”. Except six times between 1992 and 2008 in places where Trump’s ventures declared bankruptcy
Do you laugh or cry at Trump’s declarations? Screaming into a pillow can be therapeutic, I find. But, calm, calm, calm. Surely there is something to be gleaned from the teachings of a man who has, after all, persuaded just under half of all US voters that he is fit to run their now-benighted country.
Are there secret arts behind the deals done by a man who claims to be New York’s biggest developer? “A claim that is inflated as his hair,” snorted Trump biographer Wayne Barrett to a US newspaper.
Stay calm. Put aside the $25m (£20m) settlement of a lawsuit bought by those who paid $24.95 for the book, and who felt fleeced of thousands of dollars in fees paid to Trump University. Let’s simply examine the teachings of the Donald.
He sums his secrets up under the acronym DUST: demand, utility, scarcity, transfer. Meaning, I think: Who’s renting? Will they want to rent my scheme? Are others letting? Can we flog the block?
Employ “bird dogs”. Eh? “Lawyers [divorce, foreclosure, probate, bankruptcy] plus barbers, hairstylists and locksmiths.” Why? “To learn of potential sellers, offer $500 for each lead your bird-dog points to that leads to a closed deal.”
Do your homework. “I’ve done the background work first – which no-one else sees,” boasts Trump. In all, think of yourself as a visionary genius and all your competitors as fakes, pretenders or wannabes.
Tread carefully before stepping on public servants. “When you work with land-use and zoning personnel, wear kid gloves, handle them with care. Unless all fails, don’t try to bulldoze your way through permissions. Human and political relations matter as much as the rules and regulations that fill their manuals.” If tippy-toeing does fail, “Sue to force government to treat your property in a way that better serves your interests.” Trump’s co-author, Gary Eldred, feels Donald “shares my belief in emotional self-discipline”.
Researching the best locations is apparently for the birds. “We ask Mr Trump, that’s our research,” simpers a Trump marketing VP. But what of the universal truth coined by Land Securities founder Lord Harold Samuel: “location, location, location”?
“That cliché is preached by know-nothings who refuse to think. You are looking for the most profitable deal that might exist in any location.” Plus, do what I do,” says the master brander. “Use your property to boost the value of the location.”
Trump cites his best deal as buying 40 Wall Street in New York from the family of the late Filipino dictator. “Ferdinand Marcos mismanaged 40 Wall Street. My management system creates value because it blends a great building, location and exemplary tenant services.” But not exemplary tenants, by all accounts. This summer Bloomberg reported the 72-storey block has housed “frauds, thieves, boiler rooms and penny-stock schemers”.
Know your customers, says Trump. “I’m not going for the old wealth that dates back to the Rockefellers and Du Ponts,” says Trump. “My target is the rich Italian with the beautiful wife and red Ferrari.” No rich female petrolheads with handsome husbands, please.
Journalists are suckers. “I create the best properties in the world. Because my properties deserve promotion, the media regards me as the master of publicity and marketing.” Never a truer word written, Donald. Look where you are now.
And finally, “Control the lawyers. Left unleashed, their attacks can kill good deals – and drain your bank account.” No arguing with the Donald on that one.
