Put yourself in the action.
That’s how Donald Trump made his first real estate deals in Manhattan.
In 1971, Trump moved into a Manhattan apartment. He began to learn the city and it’s real estate. He talked his way into a club membership at Le Club, where he has the opportunity to rub elbows with future business associates. As a non-drinker, Trump figured he had an advantage in business when he saw how hard the Manhattanites drank.
In 1973 the Manhattan real estate market started to suffer. For Trump, who was looking to buy in a good location for an affordable price, this was great news.
The Penn Central Railroad began unloading some land. Trump immediately contacted the man in charge of selling the land, preferring to ask directly for what he wanted. In his attempt to buy the land, Trump took advantage of the focusing illusion by talking down the value of the property and the problems around the area. Trump also promoted his enthusiasm, his political connections, and his Trump Organization. The sale of the railyards to Trump were contingent on many factors, but Trump never had to put any money down on the property.
From 1974 to 1978, Trump worked to have his railyards chosen for the new New York City Convention Center. After numerous studies and alternative sites, Trump’s site finally won out.
Trump offered to build the convention center. Mayor Koch refused, and the new project ran over by four years and hundreds of millions of dollars before it opened in 1986.
During all of this, Trump partners with the Hyatt hotel chain to buy and renovate the Commodore Hotel in Manhattan. The real estate market was difficult. Trump negotiated with the city for a huge tax abatement — forty years — and he got it because no one else seemed willing to invest in the old building.
The Commodore Hotel was remodeled in gleaming glass. It reopened in 1980 and Hyatt took over the management, with Trump as a 50% owner.
Put yourself where the action is.
Aim high and keep pushing.
Cover your downside.