Comment Re: Owners get rich, everybody else pays them (Score 2) 229
Even aside from the issue of accurate validation,, Trumpâ(TM)s properties are likely already mortgaged to the hilt. Thatâ(TM)s not particular to Trump, itâ(TM)s sensible business practice. Property gives you access to credit, so you take advantage of that credit to obtain money to grow your business. Mortgaging your property is the ordinary profit maximizing thing to do.
But what you canâ(TM)t do is leverage your property *twice*. So even bonafide real estate billionaires donâ(TM)t have access to limitless instant cash. Independent estimates of Trumpâ(TM)s wealth puts it at a little over 2.5 billion. Thereâ(TM)s probably not a billionaire in the world who could scare up almost 20% of his net worth in cash overnight.
Assuming his properties are mortgaged to the max, such a big cash demand could trigger a catastrophic chain reaction where he sells one property, lenders whose loans are secured with that property demand their money back immediately, forcing him to sell another property and so on.
If Trump can somehow turn this IPO into a fair amount of ready cash, that could spell the difference between financial survival and ruin for him . Heâ(TM)s just got to sell his believers in buying in.