The Art of the Deal Book Summary, by Donald J. Trump

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1-Page Summary of The Art of the Deal

Overview

The Art of the Deal by Donald Trump offers business advice and strategy. The book is a collection of stories from his work as head of the Trump Organization, with no typical week or project in his life. Each day is filled with phone calls and impromptu meetings, but he goes into detail about how he cuts deals and earns multiple millions for himself.

Donald Trump began learning the real estate business from his father in Brooklyn and Queens. He set his sights on Manhattan, where he bought hotels, renovated them and built more grand structures such as New York’s Trump Tower (1983) and many other buildings. His reputation grew, so he expanded to Atlantic City with a casino-hotel complex called Trump Plaza (1984). Managing contractors, employees, business partners and rivals was important for him as well as dealing with politicians and the media.

In this book, Trump shares his business mistakes and successes. He explains how he made decisions and what he learned from them. The lessons can be applied to other ventures as well as everyday life.

The book The Art of the Deal was first published in 1987. It had subsequent editions released in 1989 and 2004.

Key Takeaways

Donald Trump learned the real estate business from his father, but he wanted to make a name for himself. He realized that networking and building relationships with people were crucial to success in New York City. When making deals, it’s important to convince others of how valuable you are and how worthless their assets are.

Key Takeaway 1: Trump learned the business from his father, but he also wanted to make his own mark and be more than Fred Trump’s son.

Analysing Data

Trump credits his father with teaching him important skills in leadership, hard work, and management. However, he wasn’t satisfied with simply continuing his father’s business endeavors. Trump is always looking to do bigger and better things. He could have easily continued on the same path as his father and been successful doing so, but instead chose to pursue even more ambitious dreams of becoming a billionaire businessman in Manhattan. Trump’s ambition drives him to seek out projects that others don’t want or can’t handle—his buildings are flashy and huge because he sees himself as a modern day emperor/conqueror who wants to leave his mark on history by building the biggest structures possible.

Key Takeaway 2: In all business dealings, but especially in New York, networking and building relationships are crucial to success.

One of Trump’s first moves after settling in Manhattan was to begin building relationships. He worked with people who would later become business partners, advisors, and customers. Relationships were integral to his success as a businessman.

Donald Trump is a businessman who values the character of people that he works with and for. He believes in building relationships, meeting other people’s needs, creating trust, and returning favors. When he likes someone or something they are effusive in his praise and dedicated to proving their loyalty and friendship. However if he perceives someone as unfair or dishonest then the deal is off and the relationship falls through. He understands on one hand that these relationships are instrumental – contributing money towards politicians being necessary to stay on their good side but also genuinely derives pleasure from them too because they make business fun for him.

Key Takeaway 3: Making a deal isn’t just about selling the worthiness of the deal, but also about selling yourself.

Early in his career, when he was still a novice, Trump sold himself by being enthusiastic and energetic. Later on, he gained experience and credibility that helped him close great deals. He knows how important it is to have a brand or reputation when you’re trying to sell something. To some extent, it seems superficial because he’s obsessed with appearances like wearing the right clothes and belonging to the right clubs. He tried to present himself as someone who runs the Trump Organization even before it became an organization at all. However, his insistence on selling himself also speaks of deeper qualities such as excitement for projects and dedication to completing them under budget and on time. Both when new in development business or established name in real estate industry Trump sells his deals by making personal appeals and promises about why he’s capable of leading the project successfully

Key Takeaway 4: When making a deal, it’s smart to convince the seller that what they have isn’t worth much.

If Donald Trump wants to buy a property in Manhattan during an economic downturn, he’ll find a way to convince the owner that it’s worth less than what they’re asking. By undervaluing the price of the property, Trump can close on his deal at a lower cost. This is one of many tricks that Trump uses when making deals; he often says whatever will help him get what he wants from people. His strategy works for him because sellers are usually confident about their properties’ value and won’t believe someone who undervalues it so much. However, if you look at how this trick plays out over time, you might see that this tactic doesn’t always work as well as Trump thinks it does—he has plenty of other tricks up his sleeve anyway!

Of course, this method raises some ethical questions about the way Trump influences sellers’ decision-making. It is kind of dishonest and unfair since he exaggerates a lot. However, it seems like he doesn’t have any moral qualms with it; in fact, he says that all business people do this to get better deals. If sellers fall for his tricks and don’t deserve to win anyway then they shouldn’t be so gullible.

Key Takeaway 5: Another strategy in making a deal is to put down the competition.

When Donald Trump was competing with other developers to build a convention center in New York City, he made his case by talking about how horrible the other sites were. His strategy worked and he won the contract.

A less aggressive strategy in business would be to rely on one’s own strengths, rather than attack others. Trump does emphasize the positives of his proposals, but he also has to go on the attack. It is interesting that Trump hates being criticized, yet often attacks other people and their ideas. This is a reflection of how ruthless businesses can be; there is little room for kindness or compromise. In this sense, Trump figures as a conqueror—someone who wins at all costs with no regard for what happens to others.

Key Takeaway 6: To project an image of luxury and class, maintain high levels of cleanliness and impeccable upkeep.

Trump is so adamant about maintaining the pristine appearance of his tower that he has installed brass rails in the atrium to be polished twice a month, and has also requested that security remove any peddlers from outside. He wants people who come to Trump Tower to see only what they expect: luxury, wealth, and beauty.

Trump is obsessed with making sure that anything unclean or unpleasant doesn’t touch his buildings. He tries to create a fantasy world for guests and customers, but he doesn’t consider the larger ramifications of this enterprise. Many critics like Ada Huxtable argue that Trump Tower celebrates elitism and its superglitz. Trump seems unconcerned about poverty in New York City and is only interested in keeping it out of sight. Instead, he uses his wealth to help charities rather than address social problems directly.

Key Takeaway 7: Relentless persistence is key to success in business.

To Analyze

Trump doesn’t give up. He keeps trying until he gets what he wants. This is a quality that many people admire about him, even though they may not agree with his other qualities or actions. Trump’s persistence has helped him succeed in business and politics. In order to be successful, it’s important to have aptitude and credibility, but you also need to keep trying when others say no because competition can be fierce for contracts and other opportunities.

Key Takeaway 8: Controversy sells. Even bad press can be good for business—and it’s cheaper than marketing.

Donald Trump is often annoyed by people who criticize his ideas and doesn’t think that he is treated fairly by the media. However, he also learns how valuable it can be to get free press coverage for his brand even when it’s negative.

This insight is useful for business magnates and brands. It calls into question the very purpose of the press: If even criticism can help a brand succeed, isn’t it possible that journalists aren’t doing their jobs? Why do consumers respond positively to brands that have been treated so negatively by reporters? If attention is a good in itself, then why does it seem like Trump’s empire will be difficult to hold accountable in the press? The more he gets written about and criticized, the more notorious he becomes. This raises questions about whether or not journalists are actually serving their function if they’re dwelling excessively on Trump.

Book Structure

Trump’s book is a combination of his life story and business strategies. It discusses how he built his company, the controversies he faced, and the deals he did with other people. The book also has very detailed descriptions about some of Trump’s major projects and deals that are worth millions of dollars.

However, Trump’s voice remains distinctive and compelling throughout the book. He maintains a casual tone in his writing even when discussing financial matters. This makes it easy to read for those who aren’t well versed in business dealings or real estate development. In addition, he inserts his opinions of various people that he deals with into the narrative. The book is about more than just how Trump built the organization; it also describes what Trump believes about relationships, personalities, triumphs and failures.

About the Author

Donald Trump writes his book to document how he has become so successful in business and why he is good at making deals. He also wants to share his insights with other people who want to learn from him about the real estate industry. He goes over many of the mistakes that he made throughout his career, as well as some of the ways that he was able to succeed despite all of the criticism that came his way.

Full Summary of The Art of the Deal

Deal Makers

People are either born with the ability to make deals or they’re not. Some people have it, but don’t know what their real talent is and fail because of that. To succeed in business you need to focus your energy on a goal, think big and never give up.

  • “Protect the downside and the upside will take care of itself.” Donald Trump doesn’t like to gamble. He knows that if he puts his efforts into something, it’s more likely to succeed than if he tries a new strategy for every project. When you’re working on a deal, always have an alternative plan in case things don’t work out as planned. If your original plan fails, be prepared with another option so you won’t lose money or time trying something that doesn’t work out.

  • “Don’t get too attached to one idea or deal.” – Donald Trump. He keeps a lot of deals in the air because he knows most don’t go through. Keep your options open and be willing to change direction if necessary.

  • “Know your market” is a very important concept for any business. Steven Spielberg, Lee Iacocca and author Judith Krantz are all successful people who have an instinctive sense of their audience and market. Donald Trump also has that same instinctive feeling about his audience so he doesn’t do much research or consulting with number crunchers or consultants; instead he relies on his instincts to guide him in making decisions.

  • “Always negotiate from a position of strength.” Have something the other party wants or needs.

  • “Enhancing your location” isn’t just about getting the best possible spot. Sometimes you can get a less desirable location and make it better with promotion and trendiness. You should never settle for a bad deal just to get a good location.

  • “Get the word out” – Sometimes you’ll receive negative publicity, but usually being written about is worth it.

  • “Fight back” – When someone tries to take advantage of you, fight back hard. If you’re fighting for something that’s important to you, things will probably work out fine in the end.

  • “Promote yourself and your project, but eventually you have to deliver the goods.” Many people talk a good game but don’t deliver. Trump promoted his properties hard, but he delivered great projects.

  • “Contain the costs” – Don’t spend more than you need to. If Trump feels a contractor is overcharging, he’ll complain even if it’s only by a few thousand dollars.

  • “Money isn’t the object. Instead, it should be fun.”

The Fred

Donald Trump learned how to be tough from his father, Fred Trump. He did very well building rent-controlled and rent-stabilized housing in Brooklyn and Queens. His father was a Swedish immigrant who died when he was 12 years old. He learned construction from the bottom up by doing it himself while taking on bigger projects and developing low-rent housing as he went along. Donald’s son also learned that lesson well.

Donald Trump watched his father build apartment buildings in the face of two competitors building towers on either side. His father would drive his crews to finish sooner and have better looking apartments than the competition, which often went bankrupt before they finished their own apartments. Fred Trump then bought out those failed projects and completed them himself for a profit.

Donald Trump attended the Wharton School at the University of Pennsylvania. He read about Swifton Village, an apartment complex in Cincinnati that had gone bankrupt and was facing foreclosure. The developer had spent $12 million on renovations, but 800 apartments were vacant. Trump bought it for $6 million and invested another $800,000 to fix up the place. He increased rents and attracted better tenants to fill those vacancies, which resulted in a profit of more than $2 million after just one year of ownership.

Several years later, a friend who lived at Swifton Village advised Trump to sell it. “It’s being surrounded by people who are so bad they will cut your throat and walk away and not even think about it,” his friend warned. Trump studied the area and saw that the neighborhood was indeed getting very rough. He immediately sold Swifton to a Real Estate Investment Trust (REIT) for $12 million, netting a $6 million profit. The contract required the REIT to go through with the deal or pay a larger penalty than usual if occupancy rates were lower than promised when they signed their agreement.

A Brand New Start

After working for his father, Trump looked for opportunities in Manhattan. He found one with the Penn Central Railroad that was going through bankruptcy and had hired Victor Palmieri to sell its assets. The abandoned rail yards were located in the West Sixties and West Thirties, which Trump bought despite having no development experience then. He built a rapport with Palmieri and received an exclusive option to buy both yards contingent upon zoning approval from the city government.

Trump thought that the land would be perfect for a convention center, but other places were being considered. Trump launched a campaign to convince people of the advantages of his property. After some studies, it was concluded that his site was better than the others. The city and state bought his land in April 1977 and began construction on the new convention center. It was an important first victory for Trump because he earned about $833,000 from selling it to them.

Palmieri said that Trump might be interested in a hotel property. The Commodore Hotel was in bad condition, but it was near Grand Central Station and Park Avenue. Trump sensed the importance of this deal for his future success. He had to convince Palmieri without putting down any money that he could lose if the deal fell through. To obtain bank financing, an experienced hotel operator needed to become his partner, as well as get tax breaks from the city government to show banks that the project made sense financially. Banks were turning down promising projects at the time because they didn’t make financial sense, so Trump knew he had to show all parties involved with this project—the banks and investors—that it would actually happen.

To make a deal happen, you need to work directly with the principals. Trump learned that from Jay Pritzker when he was trying to build Trump Tower in New York City. The city government wouldn’t give him tax breaks unless he could prove that his building would be successful and help the city’s economy. He enlisted Pritzker as an investor, who convinced other investors to join them too by saying that the Commodore Hotel was going under and needed money fast or else it would close down within a week. Then they asked for their tax break and got it because of this “imminent” closure of the hotel.

Trump Tower

Donald Trump watched one location for years: an 11-story building at Fifty-seventh Street and Fifth Avenue, the home of Bonwit Teller. Not only was it a great location, but its size allowed him to build a landmark building. A company called Genesco owned Bonwit and refused to sell it to Trump. But when he learned that John Hanigan had been appointed CEO in order to save Genesco from bankruptcy, he called him up. “I know why you’re calling me,” said Hanigan. “You want to buy Bonwit Teller? When would you like to meet?”

A deal is dependent on timing. Trump bought the Bonwit lease for $25 million, and made a 10% mortgage payment of $2.5 million per year to pay for it. Ironically, before construction began, Bonwit wanted retail space in the new building that Trump was developing. So he leased them 55,000 square feet of space at a cost of $3 million plus a percentage of profits from sales there. This means that Trump actually got the land for free and still had plenty of room to rent out to other retailers who could help him make more money than what he paid out in lease fees to Bonwit’s parent company (Bonwit Teller). He also insisted on having an alternative plan if something unexpected occurred; even though his plan seemed solid enough already because it included strong legal counsels who helped with government permit approvals.

A Roll of the Dice

Donald Trump was not interested in the casino business until he heard a news report about a strike at Las Vegas hotels. This made him realize that casinos were important to Hilton Hotel’s overall profits, so he decided to look into Atlantic City and go into the casino business there.

By 1982, Trump had his casino license, funding and building plans. Then, Michael Rose asked him to meet. Trump thought that Rose probably wanted to buy the Barbizon, an old hotel which he owned on Central Park South. For ten minutes, he praised the property and its qualities without realizing that Rose was not interested in buying it but in partnering with him for a casino in Atlantic City instead.

Rose offered Trump a great deal. He would construct the hotel and Holiday Inn would run it, while they’d share profits equally. The chain promised to arrange the rest of the project’s capital, as well as pay for his costs until then. In addition, they promised to cover any operating losses for five years so that he could start in the casino industry without having to worry about losing money initially.

There was a catch. Holiday’s board had to approve the deal. Rose scheduled his annual board of directors meeting in Atlantic City, so the board could see the construction. Trump faced an issue with little work being done on the site prior to that meeting. One week before it, he told his construction supervisor to make it seem like there was a lot of activity and progress happening at that time even though there wasn’t much going on at all. He didn’t really care if any equipment did anything or not as long as they made it look like they were working hard for them during their visit because he wanted Holiday’s board members to be impressed by what they saw from him and how serious he was about getting this project completed successfully for everyone involved in this venture including himself and those who invested into building up that area once again after Hurricane Sandy caused major damages along with other natural disasters which affected many people in New Jersey & surrounding areas within United States back then when Sandy hit land last year (2012).

When the board members went to inspect the site, it looked as if they were building a dam. The bulldozers and other heavy equipment barely had room to maneuver. Trump was very happy with how things were going at this point in time. However, one of the board members asked why there was a worker filling up a hole he just dug. Fortunately for Trump, no one pursued that question any further because Holiday executed their agreement within 21 days and gave him $220 million for construction work to start on schedule.

The Art of the Deal Book Summary, by Donald J. Trump
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