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To: alloysteel
Actually, the success of Trump's business model is that he usually does not take big risks in his ventures. He really trades on his brand name more than the real estate for many of his projects. Here's a good example of how it works:

1. The Trump team finds a project to develop. Let's say it's a property in New York City where they want to build a luxury condo building. For the sake of this discussion we'll assume that the building will have 200 units in it.

2. Let's assume that the market rate for luxury condos in that neighborhood is $1 million each, which means this would be roughly a $200 property at the end of the day.

3. Trump comes along and says: "People might be willing to pay $1 million for a condo here in the ABC Building, but if we call it Trump Center then people will pay a premium for the name and each unit will be worth $1.5 million."

4. The industry buys into this concept after market studies done by independent investors confirms what Trump says. The project would now be a $300 million property instead of a $200 million property.

5. The development team goes out and gets other investors to pony up money to build the project.

6. Without paying a penny out of his own pocket, Trump can get a 33% ownership stake (the value of his $100 million "brand") in the project.

It's actually a incredibly smart way to make a lot of money. It also explains why he has spent his career acting like a carnival promoter and keeping his name in the news even if it's just in the gossip pages. The Trump name instantly brings credibility to a project.

The downside of this approach (it's really more of a regulatory issue than anything else) is that the investors who buy into this (the original project, not an individual $1.5 million condo) will not include institutional investors like insurance companies and pension funds that are among the largest investors in real estate projects. They are subject to regulatory oversight that precludes them from buying into anything built on a "brand value" instead of real estate market fundamentals that would have made this a $200 million project without the Trump name on it.

On the other hand, this also means that the projects don't have to meet the scrutiny of government regulators who are responsible for making sure that insurance companies and pension funds remain solvent ... so the administrative cost of running a project like this is probably much lower than other projects.

26 posted on 07/18/2017 7:40:40 AM PDT by Alberta's Child ("I was elected to represent the citizens of Pittsburgh, not Paris." -- President Trump, 6/1/2017)
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To: Alberta's Child
Sorry ... for Item #2 it should read: "a $200 million property ..."
27 posted on 07/18/2017 7:42:09 AM PDT by Alberta's Child ("I was elected to represent the citizens of Pittsburgh, not Paris." -- President Trump, 6/1/2017)
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To: Alberta's Child

Azerbaijan will be a prominent part of an investigation ..especially since it was just revealed that the President of Azerbaijan son In law was involved in the Jr escapade. He is now divorced from the daughter. Not sure when Agalarov married her.

The Trump project was a corrupt mess in that country. Not saying Ivanka trump knew it. I have no way to know if she did.


30 posted on 07/18/2017 7:52:29 AM PDT by RummyChick (can we switch Don,Jr for Prince Kush and his flak jacket. From Yacht Party to Warzone ready to wear.)
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