This article is the first of a four-part series, going over every tip from Donald Trump’s book— “The Best Real Estate Advice I Ever Received“.
No matter what your political beliefs are, one thing we can all agree on is that Trump knows his stuff in real estate. He was able to turn millions into billions, and that is no easy feat.
If you want to learn how to be successful in real estate investing, one of the best things to do is read from those who have done it already. This article reveals tips from 25 different experts in different areas of real estate, and will break them down in-depth.
In Trump’s book, 100 expert real estate agents and investors shared their favorite tip that correlated to their success. If someone applies all 100 of these tips to their business, their chances of success are raised. Here are the 25 we will breakdown:
- Buy Where the Wealthy Like to Play
- Don’t Be Afraid to Invest Your Time
- Buy The Best
- Focus on Results
- Listen to Your Client/Customer Needs
- Target Growth Areas
- Work With Professionals You Trust
- Always Do The Best You Can
- Focus on Location
- Develop in an Area Where Growth is Coming
- Maintain Your Integrity
- Look Into Real Estate Auctions
- Invest in Single-Family Rental Houses
- A Common Sense Approach to Foreclosures
- Choose Your Agent Wisely
- 5 Principles to Success
- Listen to Your Television
- Work With What You’ve Got
- The First Offer is Usually the Best
- Choose a Good Partner
- Add Value to Your Real Estate Inventory
- Choose a Trustworthy Partner
- Success Comes Through Hard Work and Direct Sales Contacts
- Approach the Business with Candor and Forthright Dealing
- Don’t Follow the Crowd
Buy Where the Wealthy Like to Play
“If I were to generalize about this real estate advice and why it turned out to be so successful, I would say buy real estate where the wealthy like to play.” -Arthur Allen, CEO of ASG
Regardless of market downturns, investments in wealthy locations yield great results. There is a reason why the wealthy invest in similar places.
Don’t let competitors scare you off. Competition is a good thing. If there is nobody trying to compete for the spot, then it may be because it isn’t a good spot. Competition is reassurance that you are fighting for a good location, and now you just have to beat the competitors.
Don’t Be Afraid to Invest Your Time
“Real estate is all about wasting time. The more time you waste, the more money you make.” -Adina Azarian, CEO of Adina Real Estate
It is easy to feel like you are wasting your time in real estate, but that is really how you make your money.
Keep at it and eventually phone calls turn into listings, and appointments turn into closings. The more time you waste, the more money you make. The more phone calls you make, the more listings you get, even if every phone call does not turn out a success. Even if every appointment doesn’t turn out a success: Some will, so the more appointments you set, the more successes there will be.
Appreciate each potential client, even if you don’t close the deal or get the listing. The more you appreciate them, the more likely you are to attain success in real estate.
Buy The Best
“The best will always retain its value and appreciate at a faster rate.” -Roger Barnett, CEO of Shaklee Corporation
Just because a property is already the best, that doesn’t mean it can’t get better.
People oftentimes say that the stock market can’t go up because it is priced at the best its ever been. And those people have missed out on a lot of profit.
People oftentimes say that real estate can’t go up because it is already a high-ticket item. And those people missed out on a lot of profit.
The best properties generally appreciate faster than decent properties, because the location appreciates.
Roger Barnett purchased one of the higher-priced buildings in New York City. He took the great structure, desirable location, and unusual proportions and made it state-of-the-art. Improving what was already the best coupled with cash flow and appreciation yielded him triple what he put in it!
Focus on Results
“Don’t confuse efforts with results.” -Thomas Barrack, Jr. CEO of Colony Capital
Effort is the start. Effort gets you going. But a lot of people give effort, not a lot of people get results.
Effort isn’t the only thing that matters. You need good connections, a strong know-how, the boldness to make moves when opportunity strikes, and the desire to learn.
Effort doesn’t produce results, effort is just one piece of the puzzle. If you are putting effort in on a business and are yielding nothing in return, then look at other factors for why you aren’t yielding the results that you want.
Listen to Your Client/Customer Needs
“You must prepare well for every appointment and do your homework, earnestly and methodically.” -Monda Bassil, CEO of Prestigious Properties of New York
A true real estate professional should know these three things:
- The client’s needs and lifestyle
- The neighborhoods where they are marketing
- Current Market Conditions
It is important to recognize your client’s needs because oftentimes, you are in charge of the biggest investment of their life, and you need to earn their trust.
You are dealing with important matters, and should treat each client as if you were in their shoes. This is how you build a repeutation, and keep repeat customers.
Target Growth Areas
“Target an area outside of a city in the direction of growth. Then target raw land on a primary artery where you may purchase by the acre instead of by the frontage.” -Douglas Baumwall, Collins and Collins Investments
The best way to make money in real estate is to target high growth areas, and your properties will become more valuable at a faster rate the longer you hold.
It’s like building a distribution center next to an Amazon warehouse, versus building one next to a Boeing Plant.
Work With Professionals You Trust
“You do not want to hand this very important—and extremely complex— process to someone you don’t trust completely, and who may not have your best interests at heart.” -John Bearden, CEO of GMAC
Working with professionals can prove to be one of the most beneficial things you can do in the real estate industry. It can also be one of the worst things you can do.
Finding people you know and trust is essential, because they will help elevate your business to the next level.
Meanwhile, people that do not have your best interests at heart typically want to get the job done and collect the check, and will oftentimes leave you stranded and looking for a way out. It happens more often than you would expect.
“Look for someone who values a relationship more than a commission from a single transaction.”
Always Do The Best You Can
“No one ever sold a building with email. Be ‘on the streets’ so you can talk personally to your sellers and buyers. Create a meaningful relationship.” -Frank Binswanger, Jr. Chairman of Binswanger
Mediocrity is not acceptable. The moment it does become acceptable, you will be eaten alive by competition and thrown to the wolves.
In this everchanging world of business, it is important to bring innovation and ingenuity into whatever you go into, and that means not accepting average results.
Focus on Location
“Where there’s a limited supply, we’re going to do well.” -Steve Bollenbach, CEO of Hilton Hotels Corporation
It is important to find a good location. Find a high-growth area that is not over-saturated with your sector of real estate.
If there are 15 hotels on one street, don’t bring another bland hotel in to make it 16. If you insist on the location, offer several things that the others won’t.
Develop in an Area Where Growth is Coming
“Always develop in an area where growth is coming. If you are a little early, or a little wrong in some way, the growth will bail you out.” -Robert Boykin, CEO of Boykin Lodging Company
Another strategy, similar to the one explained by Douglas Baumwall, is to develop where you know that growth will be there.
This is similar to the business strategy of Warren Buffett, “Buy low, and sell high.”
You are buying low when you purchase properties in an area that hasn’t seen the growth yet, but you know it is coming. You can sell high when the growth hits and you enjoy years of prosperity because you chose the right location.
Maintain Your Integrity
“Winning takes work, 24-7, but the rewards are worth every hour, day, month, and year of effort.” -David Brause, President of Brause Realty
Four tenets to realize in good business:
- The single biggest asset of any company or individual is integrity.
- Patience is vital
- There is no substitute for due diligence
- When you move out of your home territory, hire local people as work for you.
Reputation is key. Without a reputation, your businesses and money means nothing. Nobody will trust you anymore, and it is not something you can recover from.
Jordan Belfort, the Wolf of Wall Street, has been teaching sales for over 15 years since his release from prison, yet he is still missing out on many potential customers due to lack of trust.
Look Into Real Estate Auctions
“Auctions are also a viable and increasingly popular method for buying and selling premium properties.” -John Brown, CEO of Express Auction
Real estate auctions sell many distressed properties and foreclosures, where you can find many great deals below market value.
However, auctions are also including more and more premium properties, with high growth rates and a lot of upside.
The auction market for real estate has grown to $65B+ in yearly sales as of the writing of the book, and continues to be a growing industry. Why?
Auctions create a sense of urgency.
When a seller decides to market a property via auction, a date is decided for the auction. This typically indicates that the seller is motivated, and is more likely to take a lower deal, as we see on many occassions.
Invest in Single-Family Rental Houses
“Over the years, I’ve bought and sold many rental houses at substantial profits, frequently carrying back installment sale mortgages for my buyers to create future income for me without any work except depositing the monthly mortgage checks.” -Robert Bruss, Author of The Smart Investor’s Guide to Real Estate
There are multiple strategies to succeeding in real estate, and single-family rentals is certainly one of them.
It is extremely profitable to buy, fix, and sell single-family houses for substantial profits.
A Common Sense Approach to Foreclosures
“When you approach a distressed seller to purchase a foreclosure property, you’d be wise to develop a working relationship with that person as soon as possible.” -Anthony Carr, Author of Real Estate Investing Made Simple: A Commonsense Approach to Building Wealth
Foreclosures are an amazing opportunity to get properties at a very low price. But, not every approach is created equal.
The seller of the house is going to be distressed, it is important to let them now that you are an investor trying to help him avoid foreclosure by putting cash in their pocket.
There are five things you need to have ready for foreclosures, or preforeclosures:
- Acquisition Money (Cash or Mortgage)
- Refurbishing Money
- A Reliable Home Inspector
- Contractors Ready to Begin
- A Settlement Attorney
Focus on getting at least 15-25% on the sale price of the house, or else it may not be worth your while.
Choose Your Agent Wisely
“You want the one agent who is going to command the highest price for your home and sell it quickly with the fewest headaches for you.” -Rich Casto, Founder of Real Estate Coaches
There are four main things to look for in a real estate agent:
- Market Knowledge
- Negotiation Skills
- Pricing Strategy
- Home Enhancement
- If your agent doesn’t know the market, then you shouldn’t expect to get top dollar for a property yo uare trying to sell. The agent needs to be well aware about the condition of the market, how the location affects the price, and what you should be able to get with the specific type of property you have.
- Make sure you ask prospective agents to explain their negotiation process step-by-step how they are going to get the highest dollar for your home. Some will give you a blank stare, some will try to sell you. Some will do it right. A good negotiator will produce a win-win scenario, and provide evidence to the buyer’s agent why the price is a great deal for the buyer, as well as the seller.
- It doesn’t matter what properties previously sold for, it matters what they are selling for now. Your competition is the other properties on the market, those are the prices you need to pay attention to, and those are the prices that your agent needs to pay attention to.
- Your agent should know how to enhance the property without spending any money, to make the property more appealing to potential buyers.
5 Principles to Success
“I have interviewed thousands of people, asking them detailed questions about real estate and how to be successful in it. I’ve found 5 key principles.” -Phoebe Chongchua, Realtor, Writer for the Guiltinan Group
- Get in the Game
- Buy and Hold
- Never Sell, do a 1031 Instead
- Cash Reserves > Cash Flow
- Be Enthusiastic, but not Overly Excited
- Many people learn about real estate, many people hear about real estate, but they are too scared to get into the game. They are “waiting for the right opportunity”, they are “trying to learn more”. But the truth is, you never know enough, and you will never find the right opportunity. And if you do, you will not have the experience to recognize it.
- Flipping is a very profitable business, but it is also a stressful and risky business that can cause you to lose everything. Buy-and-hold has been an extremely successful strategy that has made many millionaires.
- Much of your profit is wiped away when you sell due to taxes. If you enter into a 1031 exchange, you can use your money to buy a better property, and you will not be taxed on the money. This way, you can use the full amount of everything you profit with, and continue to build up to greater amounts of cash flow.
- Both cash flow and cash reserves are optimal, but someone without cash reserves is on the brink of bankruptcy. One thing can go wrong and they are wiped out. Cash reserves are always vital to a real estate business.
- When we become overly excited, we forget about the risk and overhead involved. It is good to be enthusiastic, but don’t be so overcome with emotion that you forget about logic.
Listen to Your Television
“When real estate agents start selling homes as an ‘investment’ instead of ‘shelter’, you know the market is about to turn.” -Frank Cook, Best-Selling Author of 21 Things I wish My Broker Told Me
Many advocate against watching TV, declaring that it is a waste of time. But Frank Cook believes that it can help with timing the market, if that is your intention.
Obviously, learning how to time the market would yield great returns, but can you really time the market using the telivision?
Work With What You’ve Got
“Mom’s Lessons #1: If you don’t have big breasts, put ribbons on your pigtails.” -Barbara Corcoran, Founder of The Corcoran Group
The analogy from Barbara Corcoran above simple means: Everyone is handed different cards, everyone is thrown into different situations, everyone has different tools and strengths they can use. Only those that make the best with what they have prevail.
“Good salesmanship is nothing more than maximizing the positive and minimizing the negative. Although your competition might offer something you can’t match, that doesn’t matter. What matters is you identify and plan with what you’ve got.”
The First Offer is Usually the Best
“Work the first offer as if it would be the last because, oddly enough, it would usually be the best offer.” -Richard Courtney, Principal Broker of Fridrich and Clark Realty
A lot of times, the first offer is based off of the sellers needs for the property, and future offers get even worse.
Oftentimes, passing up on the first offer takes the opportunity away, and then your client, or you, is left with something that leaves them worse off.
Choose a Good Partner
“You can’t make a good deal with a bad partner.” -Lester Crown, Chairman of Henry Crown and Company
Your partner is everything in business. If you are picking up their slack, it is slowing the business down. If they are helping the company reach new heights, then they are elevating the partnership to better deals.
Add Value to Your Real Estate Inventory
“Ultimately, the money is in being able to deal with the headaches.” -Gil Dezer, President of Trump Grande Ocean Resort and Residences
If you are just like any other business in your market, then you have nothing to add. If you have nothing special, why would the good deals and clients come to you?
Make sure you add valued things to your inventory. Hold your properties, upgrade your properties, make them look good.
Also, market your properties. For example, Gil Dezer had an Ocean Resort, but wanted to add value in marketing. He was able to get together with Donald Trump, and Trump allowed him to use his name on the resort. That allowed for instant credibility, instant reputation, and instant results.
Choose a Trustworthy Partner
“Carefully pick partners with integrity who are relationship-oriented.” -Thomas Dobrowski, Managing Director at General Motors Asset Management
If your partner is fixed on the money and nothing else, it will not be a long-lasting partnership. You need a partner who is honest, and relationship-oriented.
Long-term partnerships work better, because reputations and deals compound overtime, to make great partnerships powerhouses in the industry.
Success Comes Through Hard Work and Direct Sales Contacts
“For salespeople, success in real estate is based on the numbers. How many people have you called? How many houses have you shown? How many listings have you called on? -Crosby Doe, Co-Founder of Mossier & Doe
This piece of advice piggybacks off of the tip given to invest your time. The more calls you make, the more appointments you make, the more successes you will have.
Set extremely high goals, almost unfathomable, and then give everything you have to meet those numbers without jeopardizing any potential relationships, and while helping people along the way.
“Success in real estate doesn’t just fall out of the sky. It is about hard work and direct contacts.”
Approach the Business with Candor and Forthright Dealing
“The investor who makes money is the one who has the ability to ride out the waves.” -Marc Ellman, President of Ellman Realty Advisors
You can buy at an all-time high, watch the market fall, and then wait and watch the market climb back to where the value surpasses the previous high, and it still proves to be a good investent.
Make sure you are straightforward, honest, and transparent in all of your dealings. A process of complete honesty leaves nothing to be lost, and people will be able to tell in your dealings.
Don’t Follow the Crowd
“If you want to make money with housing, you have to sift through the current data to spot opportunities, go against conventional wisdom, and do what others are unwilling to do. Get there first.” -Blanche Evans, Editor of Realty Times
Following what most people do leads to average results. It makes sense, most people are average, and following that leads to mediocre and unsatisfactory results.
Do your own due diligence, and take the route that applies for you. Following the crowd leads nowhere but sideways. Think outside the box, and take unconventional routes to success.
How to Be Successful in Real Estate Investing – The Best Real Estate Advice I Ever Received
If you want to learn how to be successful in real estate investing, it certainly helps to read good books from people who have already accomplished something similar to what you are trying to do.
The Best Real Estate Advice I Ever Received is a very easy read, but has lots of knowledge packed into the strategies given by 100 different people at the top of their industry.
From newspaper editors named “25 Most Influential People in Real Estate” to CEO’s of large corporations, Donald Trump has really gotten a nice mix of advice laid out in an easy-to-read book format.