Greenie, you are generally correct with how this sort of RE enterprise can work successfully.
Greenie, you are incorrect with respect to Trump. The issue is that he does not have access to credit from most mainstream banks. My understanding is that he has personally guaranteed ~$400M, so they are either recourse loans for properties or personal loans he has taken out to support his lifestyle…likely a combination. There are nonrecourse first lien loans on his properties as well. Based on a google search, his properties generated ~$440M in sales in 2019. This is from the Trump Organization’s financial disclosure form, so take from that what you will. After servicing debt and expenses, $400m in personal loans maturing in 4 years is almost definitely a liquidity issue based on access to credit and perhaps a solvency issue depending on the capital structure of his properties.
Also, throw in COVID for a hotel and resort operator and do the math. Those properties are almost certainly burning cash and if they are leveraged over 50% there may be a going concern issue.
@BWYF - you make good points. And I didn’t intend for my post to be any kind of scientific discourse, but rather, I just wanted people to stop saying stupid things like “Donald Trump is losing money every year!!! His tax return proves it!!!” No–his tax return proves no such thing.
His particular situation may be different. (Actually, there’s no “may be” about it. It is different. He is unique–just like everybody else.) But it’s pretty normal for a person to personally guarantee a loan. It’s not sinister or evil or otherwise indicative of financial jeopardy. It basically just means that the bank wants another person they can go after in case of default. (And whether it be right or wrong, DJT has been known to stiff his lenders. With a personal guarantee, he’d have to declare personal bankruptcy to get those loans discharged.)
I agree that he may be in real trouble with COVID and all. And I don’t recall what the Times article said–but I’m quite certain they don’t have 2020 information yet.
And again–I’m not a credit analyst analyzing Trump’s finances. I’m just trying to get people to realize that a taxable loss does not equal an economic loss. In fact, it might be quite the opposite. It’s really hard to tell what’s really going on just by looking at a tax return, because what looks like a $26m “consulting fee” may really be nothing more than a transfer of money to your kids’ bank accounts. And you won’t find “20% appreciation of the market value” anywhere on any tax return.
I wonder if he is able to be objective with respect to COVID related precautions, since even acknowledgement of COVID as an issue would clearly be detrimental to his hotel and resorts business.
It’s understandable that a person who owned hotels and resorts would claim that COVID is no big deal, a hoax, etc.
It’s understandable that a person who is president of the United States would use his prominence to loudly proclaim and echo the medical advice of the nation’s leading scientists. Such as, wear a mask!
Unfortunately, in the US, the hotel owner and the president are the same person.
BTW, if Trump had been pushing sound medical advice - masks! wash hands! distance! - since February, instead of pushing quack cures, how many American lives would have been saved?
china, the origin of the pandemic. 3.4 deaths per million.
vs the us at 624 deaths per million.
so we woulda save 99% of those who died. at 200k dead, about 199k lives coulda been saved. if we were the superior to china.
Yes, I agree that the tax returns show a limited picture of Trump’s financial situation. I’d love to see personal tax returns, business tax returns, personal financial records, and business financial statements. All the footnotes, please. I love reading financial footnotes.
My suspicion is that if we could see all the information, we’d find some very unsavory and potentially illegal things.
Reminder that Donald Trump once owned a USFL team (he’s never been able to afford an NFL team), bankrupted a casino, failed at running an airline, failed at selling vodka, failed at selling steaks, had a fraudulent online education program with his name on it, had a family charity that cheated its donors (and his family can no longer operate a charity in NY, from what I understand), has a son who is on record from 2014 as saying that they receive a lot of financing from Russia, etc. You get the picture.
When I look at the info that has been shared about Trump’s tax returns, I have to take the full picture of the man into consideration, and I suspect some very bad things are going on.
If in 2015 he’d just retired to Florida to glad hand people at his club and be an occasional loudmouth on Fox, that would have been fine. Instead, he’s a malignant narcissist and he’s president of the United States. He’s unfit and I’ll be putting my vote for Biden into a ballot box this week.
So… if Donald Trump had been required to divest all of his business interests before becoming president, would COVID have killed 200k people in the U.S.?
If laws required full disclosure / divestment and management of the president’s finances in a blind trust, as I discussed above, would Donald Trump have wanted to be president? If you think the answer to that question is No, then don’t you think that’s an interesting answer?
Nope. I didn’t vote for him four years ago, either.
But you haven’t made a good case for why I should vote for Biden instead of Trump. Sure, Biden hasn’t made the mistakes, but he hasn’t really been doing anything substantial, with real accountability.
I find it absolutely bat ■■■■ insane that a guy can have all that cash flow coming in, and get away not paying taxes. Meanwhile I’m over here paying 30% of my paychecks to that douchebag.
Trust me, I think biden can eat ■■■■, but I’d pay money to feed it to Trump.
Yes, you’re an adult who can make up his own mind.
Either Biden or Trump will be president in January. I could write a long list of reasons for why I’m voting for Biden, but I’ll just submit two here.
I expect this pandemic will still be going on in early 2021. I would trust a government under Biden to get us to a safe and effective vaccine.
I believe our leaders should not be consummate BS artists. Trump is a very, very, very long way from George Washington and the cherry tree. Truth is an eternal principle.
BTW, apparently there are some Trump financial statements that can be looked at. It seems UK law requires some companies, such as the Trump golf club in Scotland, to make annual filings. You can find financial statements for the club at link below (search for “Trump International Golf”).
I agree that the media coverage isn’t very sophisticated. But I think it’s a stretch to suggest people on this forum not to understand your points since they are pretty obvious if you have investments yourself (maybe I’m wrong?) the issue to me is along the brain points coupled with the fact you just assume the president can get new financing. The fact he’s a president makes that simple seeking financing out problematic. Not saying it’s his fault, but it’s certainly worth people knowing.
But honestly I really want to learn how to mimic his taxes. That’s what I care most about
step 1. dont work. like i said before. fed, fica, state, can go up to 52%. depending on state
step 2. have a cash profitable business.
step 3. depreciate and offset your income.