The Morning After The Election

The Real Estate Espresso Podcast

The Morning After The Election

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The Morning After The Election

Welcome to the Real Estate Espresso Podcast. You’re~~morning~~ 📝 morning shot of what’s new in the world of real estate investing. I’m your host Victor Menasce. On today’s show, we’re taking a look at the state of affairs, the morning after the election. Thankfully, the election result is clear. The last thing the U.S needs is months of conflict over the validity of the election. Now let me be clear. I don’t think either candidate is the best choice for the U.S., but then I don’t really get to have a voice on that. I’m not even able to vote in the U.S. election.

Some of Donald’s policies are effective. Some are not. Donald’s personal character is a deal breaker for too many people. That’s the number one reason I believe why he’s been so divisive. This morning we have a bunch of people rejoicing and breathing is high relief. And there’s almost equal number of people fearful and apprehensive about the next four years. As real estate investors, we can now look past the election. We’ve already experienced a Trump presidency once before, it will be unpredictable, but that’s intentional.

From my dealings with George Ross, who is an advisor within our firm, I have a pretty good understanding of Trump’s negotiating methods. George after all, held the position of executive vice president in the Trump organization for many decades. He worked for Donald for 47 years. Many people truly misunderstand Donald’s intent.

For example, Europe is right now worried about the lack of US support for the protection of Europe. I don’t believe the US is about to abandon its allies. However, Donald does not want to be footing the bill for protecting Europe. He wants Europe to pay their fair share of that cost. That means sending a signal of pulling back. And unless you send a convincing enough signal that the US will abandon Europe, European governments will not step up and make the necessary investments to protect the continent. After all, why would they? The US will foot the bill. This is a form of hardball negotiation.

In terms of border security, the threat of separating families acts as a powerful deterrent for people to enter the country illegally if they know they’re going to be separated from their spouses and separated from their children. I’m not defending a policy of separating families. I would never want that to happen to my family. It’s inhumane. It’s another form of hardball negotiation. Negotiation with people that you’re not even in a dialogue with requires clear leverage in the negotiation. I’m not defending it, I’m just explaining it.

The question of tariffs is not about passing costs along to consumers. It’s about creating a tariff structure that is so obnoxious, so offensive, that these manufacturers will have the incentive to build factory in the U.S. and employ U.S. workers in the manufacture of those products.

The tariffs are negotiating leverage. We saw it for example in the Bombardier C-series aircraft. My sister was working at Bombardier at the time she was chief pilot there. President Trump threatened a 100% tariff on the C-series jets, and that would have put the contract with Delta Airlines at risk. Bombardier did have the option of opening factories in the U.S. to get around the import duty. Instead, Bombardier chose to sell a 51% share of the business to Airbus and the final assembly of the aircraft was moved to the Airbus assembly facilities in the U.S. Kukl’s planes got re-branded as the A220. This was another hardball negotiation. President Trump got what he wanted, manufacturing in the U.S.

What we can expect during a Trump presidency is a repeat of this style of negotiation. I don’t like President Trump’s style of negotiating. It’s not my style. George Ross taught negotiation at the law school at NYU for 22 years, and he wrote a book called Trump-Style Negotiation.

The book itself was published by John Wiley & Sons, and it’s no longer in print. You can probably find some used copies on sites like ebay. The book was based on the core syllabus from when George taught at NYU and it’s been embellished with some stories from George’s first hand experience.

What is reported in the mainstream media is a very superficial analysis. The commentators seem to spend all of their time reacting to the surface level statements made by President Trump. If you want to gain real insight into the playbook, then I recommend you get a copy of George’s book Trump-style negotiation.

I am personally blessed to have developed a relationship with George over the last 15 years. We are still to this day running a business mastermind together and we meet monthly. George is also an advisor to my development firm Y Street Capital. He’s at 1961 years old and he’s got a tremendous amount of wisdom. I’ve never met donald. The closest I’ve got is a signed copy of his book The Art of the Deal.

I have spent time with his son, Eric, at the winery in Charlottesville and at the Trump National Course in Washington D.C. We’ve collaborated on charity events in support of St. Jude’s children’s cancer research hospital. I do think highly of Eric, but I don’t know the rest of the family.

I’m not someone who gets emotionally wrapped up in reality. What I mean by that is, who occupies the White House is not in my sphere of influence. It is reality. It’s a little bit like the weather. I could be upset about the weather today, but mother nature doesn’t really care what I think about the weather. I can either accept the weather or not. It’s not going to change it. The more I understand the weather, the better prepared I can be to deal with it. It’s in that context I’m recommending you read George’s book.

As you think about that, have an awesome rest of your day. Go make some great things happen. We’ll talk to you again tomorrow.

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