Investor profile The Donald Donald Trump s iconic surname has by bigpoppamust


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     The Donald
     down under
     Donald Trump’s iconic surname has branded a diverse                                           briefly with the idea of attending film
                                                                                                   school ... but in the end I decided real
     and, at times, seemingly unrelated stream of premium                                          estate was a much better business.”
     products and services – but the celebrity billionaire                                            He began by attending Fordham
                                                                                                   University, but after two years he
     maintains that property has always been his one true love.                                    applied to the Wharton School at the
     He’s bringing his tried and true formulas for success down                                    University of Pennsylvania and got in.
     under to reveal how you too can “think like a billionaire”.                                      “I decided that as long as I had to be
                                                                                                   in college, I might as well test myself
     Sarah Megginson reports                                                                       against the best,” he says. “I was also
                                                                                                   very glad to get finished. I immediately

           or someone so focused, Donald          and the US$500m Trump                            moved back home and went to work
           Trump likes to operate on diverse      International Hotel & Tower in                   full-time with my father.”
           and disparate playing fields.          Toronto, which will become Canada’s                 He worked alongside his father for
        The extravagant billionaire has           tallest residential building.                    five years, whom Trump credits as the
     business interests extending from               The projects are ambitious and                main influence that helped him form
     property, hotels, casinos and mortgage       record-setting, but Trump loves a                his business sense.
     broking to restaurants, golf clubs and       challenge – and property is, after all,             “My father was my mentor,” Trump
     several New York City skating rinks.         his one true love.                               says, “and I learned a tremendous
     He also runs Trump University,                  “It’s tangible, it’s solid, it’s beautiful.   amount about every aspect of the
     an institute that offers online              It’s artistic, from my standpoint, and I         construction industry from him.”
     courses in marketing, real estate,           just love real estate,” Trump said in a             One of Trump’s first projects, which
     entrepreneurship and investing, and he       recent media interview.                          he coordinated while he was still in
     owns the biggest beauty pageant in the                                                        college, was the revitalisation of the
     world, Miss Universe.                        Early success                                    foreclosed Swifton Village apartment
        Trump also owns a successful              Surprisingly enough, real estate was a           complex in Cincinnati, Ohio.
     Manhattan modelling agency,                  career choice that Trump almost                     He transformed an apartment
     Trump Models, which boasts                   didn’t pursue.                                   complex with 1,200 properties and
     supermodel Jodie Kidd and Italian               Trump’s father Fred Trump was a               a 66% vacancy rate into a thriving
     actress Isabella Rossellini on its roster,   successful property developer, which             development with 100% occupancy
     and he is the star of his own reality TV     exposed young Donald to the industry             within 12 months.
     series, The Apprentice – which earned        from an early age. In his book, Trump:              When the Trump Organization
     him a star on the Hollywood Walk of          The Art of the Deal, he discusses his            sold Swifton Village for US$12m, it
     Fame and attracted such high ratings         undergraduate career, saying: “I flirted         cleared US$6m in profit. “Everything
     in the US that it spawned a spin-off,
     The Celebrity Apprentice.
        The Trump name has branded a
                                                      “I’m one of the largest developers in the
     varied and ever-growing stream of
     premium projects, and he show no
                                                      world, and real estate will always be my
     signs of slowing down – particularly
     when it comes to property.
                                                      primary thing. I have fun with television,
        His current projects include
     Trump SoHo, a controversial 46-
                                                  and The Apprentice has become a monster
     storey condo-hotel development in            hit, but I want to be known for real estate,
     downtown Manhattan that is upsetting
     locals due to its proposed height,           not for television”
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Investor | profile                                                                                                                                                                                                                                                                 Investor | profile

                                               he seems to touch,” his father                                  rink remains in Trump’s portfolio to       interest rates on the outstanding debt,      Trump down under
                                               commented, “turns to gold”.                                     this day.                                  and more time to pay it off.                 Trump has completed real estate
 Invest                                           Trump expanded his father’s
                                               company into the lucrative Manhattan                            The rocky road to success
                                                                                                                                                             In November 1992 the Trump
                                                                                                                                                          Plaza Hotel was forced to file a
                                                                                                                                                                                                       projects throughout the world, and
                                                                                                                                                                                                       has “some fantastic projects underway
 like a Trump                                  real estate market, and in the 1970s
                                               they benefited from the financially
                                                                                                               Not all of Trump’s business dealings
                                                                                                               have been so successful, however.
                                                                                                                                                          prepackaged Chapter 11 Bankruptcy
                                                                                                                                                          protection plan after being unable to
                                                                                                                                                                                                       globally at the moment”. Although
                                                                                                                                                                                                       he has no plans to expand his empire

 D      onald Trump became a billionaire
        in real estate by making a series
 of creative and successful investments.
                                               strained New York City government’s
                                               willingness to give tax concessions in
                                               exchange for investments at a time of
                                                                                                               Although he now owns some of the
                                                                                                               most prestigious pockets of real estate
                                                                                                               in New York City, there was a time
                                                                                                                                                          make its debt payments. Under the
                                                                                                                                                          plan, Trump agreed to give a 49%
                                                                                                                                                          stake in the luxury hotel to Citibank
                                                                                                                                                                                                       down under at the present, he does
                                                                                                                                                                                                       believe that the Australian property
                                                                                                                                                                                                       market offers plenty of opportunities
 He and his daughter Ivanka, who               financial crisis, via the redevelopment                         when it looked like Trump’s empire         and five other lenders. In return,           to local investors.
 is vice president of real estate              of the bankrupt Commodore Hotel.                                was set to collapse around him.            Trump received more favourable                  “In a softer market, there are always
 development and acquisitions for                 He went on to acquire some of the                               By the late 1980s, the effects of the   terms on the remaining US$550m               great buys, and it’s always a great
 the Trump Organization, share some            most exclusive properties in New York,                          recession had put Trump in a position      debt, and retained his position as           time to get into real estate. It’s about
 of their top investment tips with             slapping the Trump brand on some of                             where he was unable to meet his loan       chief executive – although he wasn’t         recognising opportunities and going
 Your Investment Property.                     the finest hotels, casinos and building                         payments, and by 1991 increasing debt      paid for this role, and didn’t have a role   for them when the time is right,”
                                               complexes in the city. One of Trump’s                           brought Trump to business bankruptcy       in day-to-day operations.                    he says.                                     Donald’s daughter Ivanka is vice president
    Be smart when choosing your                                                                                                                                                                                                                     of real estate development and acquisitions
                                               key strengths lies in his ability to                            and the brink of personal bankruptcy.         By 1994, Trump had eliminated                “Australia is doing okay, but perhaps
 investment property because location                                                                                                                                                                                                               for Trump Organization
                                               spot a solid opportunity, which he did                          Despite having already lost hundreds       most of his US$900m personal debt            not as well as it was doing two or three
 is everything, Donald says. Find a
                                               in 1980.                                                        of millions of dollars in dealings with    and had significantly reduced nearly
 location that offers easy access to              The city had attempted to restore the                        Trump, banks and bond holders opted        US$3.5bn worth of business debt,
 amenities, and one that has a history
 of property appreciation. Do your
                                               Wollman Ice Skating Rink in Central                             to restructure the property magnate’s      a feat that critics thought he was              “I’ve always told people that, to be
                                               Park, but six years and US$12m later,                           debt to avoid losing even more money.      incapable of achieving.
 research and find out what other              construction was still not complete.                               Trump’s US$1bn Taj Mahal casino            “In business, I’ve discovered that           successful, you have to enjoy what
 properties in that area have been             Trump stepped in and took over the                              project reemerged from bankruptcy in       my purpose is to do my best to my
 selling for. If you plan to rent out          job, completing the project in six                              October 1991, with Trump handing           utmost ability every day,” Trump says.          you’re doing, and right now I really
 the property, research the rental             months and with US$750,000 of the                               over 50% ownership to the original         “Business is full of complexities. That’s
 and vacancy rates for comparable              US$3m project budget remaining. The                             bondholders in exchange for lowered        what makes it so interesting.”               enjoy what I’m doing”
 properties in the area.                                                                                                                                     While he was forced to relinquish
    Meanwhile, Ivanka says she invests                                                                                                                    the Trump Shuttle, which he had              years ago. You can expect to have          the word ‘no’. Forget it; use that as the
 in real estate because she “believes in          Donald Trump’s investment strategies                                                                    bought in 1989, he was able to retain        difficult times ahead in terms of the      power to push on.”
                                                                                                                                                          Trump Tower in New York and his              cost of fuel, which is like blood.            Like most successful business
 the tangible asset”.                                  s the world’s most famous real estate billionaire, Donald Trump believes
    “I think, in terms of real estate, there                                                                                                              controlling interest in his three casinos    Fuel is killing everything. But in real    leaders, Trump also believes that
                                                       that success in real estate requires more than just smart strategies – it                          in Atlantic City.                            estate, good buys – if you’re in the       individual success largely depends
 are few bad decisions as long as you             demands an ability to project personal qualities that inspire confidence in                                And although Chase Manhattan              right place at the right time – exist      on the people that you surround
 can weather the hard times,” she says.           others, such as enthusiasm, showmanship and never-say-die tenacity.                                     Bank, which lent Trump the money to          in any market, no matter what the          yourself with.
    This means having the financial                 “You need to know your subject,” Trump tells Your Investment Property.                                buy the West Side yards – his biggest        conditions,” he continues.                    “No matter how smart you are,
 means to hold your property through                “Love what you do, or you will never work at it hard enough to become a                               Manhattan property parcel – had                 Trump will soon be in Australia         no matter how comprehensive your
 difficult periods, such as the sub-prime         huge success. You need to know everything that there is to know about what                              forced the sale of the holding to Asian      to deliver his advice and opinions         education, no matter how wide ranging
 crisis in the US.                                you are doing, and continue to learn.”                                                                  developers, Trump remained at the            in person, appearing in Sydney,            your experience, there’s simply no way
    “A lot of people didn’t do the math             George H Ross, Trump’s closest advisor for 25 years and co-star on several                            helm, as the new owners employed             Melbourne and the Gold Coast as            to acquire all the wisdom you need to
 correctly and weren’t able to carry              series of The Apprentice, reveals the core real estate investing strategies that                        him to oversee the development. They         the headline speaker of the                make your business thrive,” he says.
 their properties when their rates were           have made the extravagant property mogul so successful:                                                 also kept his name on the buildings          ‘Think like a Billionaire’ seminar            “Watch, listen and learn. You
 adjusted,” Ivanka says.                           Go for the big four when scouting your location: views, prestige,                                     that were eventually constructed on          throughout November.                       can’t know it all yourself – anyone
    “Generally speaking, if you do the              convenience and growth potential. It has to be special. If it is, be willing to                       the yards, to leverage off his well-            The seminar will feature a line-up      who thinks they do is destined for
 math and the property is something                 pay a premium for a prime location                                                                    known moniker and charge a higher            of investment and wealth creation          mediocrity,” he advises.
 you can afford to carry for a number              Remember that location is important, but it is a starting point for what                              premium for the condos.                      experts, and some participants will           His final tip?
 of years through downturns in the                  could be a great investment – it doesn’t guarantee anything. Trump’s                                     Plenty of other setbacks have             have the opportunity to meet with the         “Above all, negotiate,” he says.
 market, you’re pretty much always                                                                                                                        peppered his career, but Trump               Donald in person.                             “When the market is tough,
                                                    philosophy is to improve any location, and don’t buy without a creative
 going to do well if the asset is quality                                                                                                                 has always been up to the challenge;            The first rule Trump offers to those    everyone wants business, including
                                                    vision for adding significant value. This could include striking renovations,
 and in a great location.”                                                                                                                                after all, he says, “the big time isn’t      wanting to get into the mindset of the     the banks. So you negotiate for
                                                    changing the zoning or adding space to the property                                                   for slackers”.                               world’s wealthiest elite is to “think      the purchase and you negotiate for
    Investing in real estate isn’t just            Know that creative problem-solving leads to big profits
 for the rich, she adds. “There are                                                                                                                          “If you really want to succeed,           big”. “I like thinking big. If you’re      everything else… and enjoy what
                                                   Write a preliminary business plan before you buy                                                      you’ll have to go for it every day like      going to be thinking anything, you         you’re doing.”
 many emerging markets and plenty                  Borrow as much as you can for as long as you can. The key to a successful                             I do… I’ve always told people that to        might as well think big,” he says.
 of opportunities for people who                    investment strategy is to have extra money on hand that you have no                                   be successful, you have to enjoy what           “Who wants to earn $300,000 a year      Donald Trump will speak at the ‘Think like
 have been priced out of the urban                  immediate use for – if you keep yourself liquid, then you can act when an                             you’re doing, and right now I really         when you can make $1m or $10m a            a Billionaire’ seminar series in Melbourne
 environment. If you find that great                opportunity presents itself, which often occurs when money is tight and                               enjoy what I’m doing. I’m having too         year? Look at your ideas, and make         on Wednesday 12 November, followed by
 location and invest with a developer               there are few buyers with significant cash in the market. The fact that you                           much fun with my life,” he says.             them as big as possible.                   Sydney on Thursday 13 November and
 who has a reputation for executing on              have available cash enables you to snap up the bargains that are available.                              “And anyone who thinks my story is           “Ninety-eight per cent of adults are    the Gold Coast on Friday 14 November.
 their vision, real estate is a safe bet.”                                                                                                                anywhere near over is sadly mistaken.”       conditioned to stop when they hear         Visit
                                               (Source: Trump Strategies for Real Estate – Billionaire Lessons for
26                                             the Small Investor by George H Ross, foreword by Donald J Trump)                                                                                                                                 27

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