If you want to become a billionaire in the real estate industry, it helps to have a father who was a millionaire in the real estate industry. This was President Donald Trump’s situation when he embarked on his real estate career more than five decades ago.
At the time, Trump’s father was a successful real estate developer in New York City. According to a 2018 article from The New York Times, by the time Trump was 17, his father had given him part ownership in a 52-unit apartment building. Trump continued to receive millions from his father in the ensuing decades.
If you’re a middle class America, you probably didn’t receive millions of dollars from a parent (or anyone else). But you can still follow common real estate strategies practiced by Trump and others.
Here are four real estate money moves to make if you’re a middle-class investor.
Discover Next: 3 Safest Investments To Hold In The Current Trump Economy
Read This: 8 Subtly Genius Moves All Wealthy People Make With Their Money
Find Mentors Through Networking
Trump learned the basics of real estate from his father, including how to value assets, manage costs and understand the construction industry, according to a blog from investment platform BinaryX.
Even if you don’t have family connections in real estate, you can still network with experienced real estate investors or developers to learn the tricks of the trade and make important connections. You’ll find plenty of potential mentors through industry organizations, social media platforms and trade conventions.
For You: How To Get a 10% Return on Investment (ROI): 10 Proven Ways
Know Your Market
This was one of the most important rules cited by Trump in his 1987 book “The Art of the Deal.”
As Inc. reported in a 2016 article, Trump bragged about having an “instinct” for market knowledge. As a middle-class investor, you’ll need to rely on research and due diligence rather than instinct. The important thing is to gain a thorough understanding of the market before investing in it.
The process should be “exhaustive,” whether you’re investing in residential or commercial real estate, according to a blog from Prosperity Economics.
According to the same blog, unexpected costs usually hit your finances the hardest — and many of them can be anticipated, planned for or even negotiated away. The blog also noted to take a detailed approach when analyzing your numbers. Research neighborhoods carefully. Factor in likely future maintenance and repair expenses. Assess a property’s long-term potential by looking at local job trends and economic conditions. Above all, focus on minimizing risk.
Be Adaptable to Changing Dynamics
As BinaryX noted, successful real estate investors are prepared to “rethink” their strategies when market conditions change.
In Trump’s case, the rethinking happened during the early 1990s recession, when he was deeply in debt. In response, he switched his business model away from casinos and other high-risk assets to “asset-light licensing transactions” that produced money with lower risk.
Manage Costs Wisely
Trump wrote in “Art of the Deal” that he believes in “spending what you have to” but “not spending more than you should.” This is hardly an original idea, but it’s an important one because it keeps you within budget and ensures you don’t overextend yourself financially.
The rule can apply no matter the scale of your investment, whether you’re putting a few hundred dollars into a REIT or tens of thousands into a physical property. Don’t spend more than you can afford.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
More From GOBankingRates
- 5 Kirkland Clothing Items You Should Buy in March To Maximize Savings
- Jerry Seinfeld's Social Security Check vs. the Average American's
- 9 Low-Effort Ways To Make Passive Income (You Can Start This Week)
- 6 Safe Accounts Proven to Grow Your Money Up to 13x Faster
This article originally appeared on GOBankingRates.com: Trump’s Real Estate Playbook: 4 Money Moves Middle-Class Investors Should Copy
