In Chapter Three of The Art of the Deal, Donald Trump introduces us to his father Fred Trump.
Fred Trump, we’re told, knew the cost of everything in the construction business. He wasn’t easily over-charged by contractors, which allowed him to make a profit in his tight industry of rent-controlled apartments. Fred also offered the possibility of future work, building relationships with contractors to help keep costs in check.
Fred Trump not only loved to work, but he worked to get ahead. DJT learned from his father how to work hard, how to be competent and get the job done, and how to motivate people. After growing up in the industry, DJT knew he would be going into construction. But his father’s market was tough. Donald wanted to work in a higher-end market than his father.
Donald Trump attended Wharton Business School at the University of Pennsylvania. The most important thing he learned, we’re told, is to not put too much faith in “academic credentials.” Others seemed impressed with his degree, however, so the investment was worthwhile.
In Chapter Four, Trump tells us of his first deal. While still attending Wharton, Donald Trump and his father purchased a 1,200 until apartment complex in Cincinnati. They fixed it up, landscaped and cleaned and painted the property, raised the rents, and advertised in local papers. Within the year they had 100% occupancy.
Trump got a feeling for Cincinnati that things might be getting rough. He put the complex up for sale and soon received offers. One representative was more interested in visiting a famous restaurant than vetting the property on behalf of his real estate company. Trump was happy to oblige, and they ate a long lunch instead of inspecting the property. The company was recommended to buy, and they draw up papers. Trump, in his interest to cover the worst possible outcome, included provisions in the contract that discouraged the buyer from pulling out after the initial contract signing, before the closing. Trump and Trump doubled their investment when that property was sold.