By Don Diamond (Care Quality Consultant- Business Development/Mergers and Acquisitions)
In today’s fast-paced, results-driven world, many entrepreneurs fall into the trap of chasing instant wealth. They want quick returns and are constantly looking for the fastest way to cash in on their ideas. But the truth is, real wealth is often built over the long term, through patient efforts and strategic partnerships. It’s not about getting rich overnight, but about developing long-term relationships and carefully structuring deals that create sustainable success.
One prime example of this is Donald Trump’s 1980s deal involving the Commodore Hotel, a deal that netted him $142 million in 1996. This is a perfect illustration of how strategic thinking and long-term partnerships can yield immense financial rewards.
The Commodore Hotel Deal: A Lesson in Strategic Partnerships
In the late 1970s, Donald Trump was still an up-and-coming real estate developer, but his ambition was undeniable. His chance to break into major real estate came when he set his sights on the Commodore Hotel, a failing property in Manhattan that many had written off. Trump, however, saw potential where others saw failure.
Instead of trying to buy the hotel outright, Trump devised a complex deal that involved several key players:
Partnership with Hyatt Hotels: Trump didn’t have the capital to take on such a large project alone, so he approached Hyatt Hotels, who were looking to establish a foothold in New York. Hyatt agreed to partner with Trump and invest in the hotel’s redevelopment.
Tax Abatement from the City: Trump negotiated a 40-year tax abatement with New York City. At the time, New York was facing economic troubles and needed private investments to revitalize key areas. Trump convinced the city that redeveloping the Commodore Hotel would boost the local economy and increase jobs.
Financing Through Strategic Partners: Trump also secured favourable financing terms from banks, leveraging his partnerships and tax abatement to reduce the upfront costs.
Once the hotel was redeveloped and rebranded as the Grand Hyatt, it became a huge success. Trump’s partnership with Hyatt and the long-term tax abatement agreement made the hotel highly profitable. In 1996, when the partnership dissolved, Trump walked away with $142 million—a massive windfall that significantly boosted his financial position and solidified his reputation as a major real estate player.
This deal is a testament to the power of patience, strategic partnerships, and leveraging other people's resources (OPR) to achieve massive success. The key takeaway? Trump didn’t need all the capital upfront—he needed strategic partners who believed in his vision.
Applying These Principles to Other Sectors: Real Estate, Care Homes, and Capex-Heavy Assets
The same principles that Trump used to make $142 million in the Commodore Hotel deal can be applied to other sectors, including real estate and care homes. Deals involving significant capital expenditure (CapEx) such as care homes, commercial real estate, or any asset worth over £1 million can be highly lucrative, but they require careful planning, long-term vision, and strong partnerships.
Many real estate moguls, such as Grant Cardone, Samuel Leeds, and Rob Moore, have built their empires using these exact principles. They focus on acquiring large assets through strategic financing, partnerships, and long-term thinking rather than trying to make quick money. By taking their time to structure deals and find the right partners, they’ve been able to grow their wealth significantly over time.
Why Entrepreneurs Need to Think Long-Term
As an entrepreneur, it’s essential to recognize that quick money often doesn’t last. Wealth that’s built gradually, with integrity and solid foundations, stands the test of time. There’s no shortcut to success. Building strong relationships with investors, stakeholders, and partners is more important than chasing short-term profits.
It’s also worth noting that in some cases, you may not need to use your own money to get started. Strategic partners who believe in your dream and vision can provide the funding you need to bring your business idea to life. By aligning yourself with people who share your values and goals, you can create opportunities that might seem out of reach on your own.
The Intersection of Business and Care: It’s Not Just About the Money
While most of my work has centred around Care Quality improvement and business growth, lately I have found myself doing more training to educate care providers on their business and financial models. This is especially important when it comes to buying, selling, or setting up a care business.
However, it’s vital to stress that care should not be seen as a money-making venture. If your primary motivation for getting into care is to make money, then you’re in the wrong trade. Care is about giving back and improving people’s lives. It’s a sector that requires compassion, integrity, and a desire to make a difference. If you’re purely focused on profit, I highly recommend you look at other industries where people’s lives are not involved.
Money should never be your ultimate aim. There is a significant difference between growing a profitable business and chasing money. Those who focus on quick wealth often find that their money doesn’t last. On the other hand, those who build gradually and steadily, with integrity, find that their success is much more enduring.
Conclusion: Patience, Strategy, and Integrity Are the Keys to Wealth
The path to long-term success isn’t about instant money or quick wins. It’s about patience, strategic partnerships, and a long-term vision. Entrepreneurs who recognize this and are willing to build relationships, leverage other people’s resources, and focus on sustainable growth will ultimately achieve far greater success than those who chase after fast cash.
If you’re involved in the care industry, always remember that it’s about the people you serve, not the money you can make. As I often remind those I train, making money should never be your primary goal—focus on delivering quality care, and success will follow.
This article was written by Don Diamond, one of our volunteer expert care consultants. Don can be contacted via email at donald@caringcommunitytrust.co.uk
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