Page 201 - Trump University Commercial Real Estate 101

Use a Money Multiplier

Attorneys have invented many formats for getting multiple investors
into one project. Two common ones are the tenant - in - common ( TIC)
entity and the limited liability company partnership ( LLC partnership ).
In a TIC, all investors are considered equal, individual owners of
the property. All decisions are discussed among the owners, and no
single person controls the deal. In fact, some decisions such as to sell

or refinance must be made unanimously.
There is a certain clean, straightforward aspect to TIC owner-
ship, especially if the individuals are all experienced investors. On the
other hand, if a TIC - owned property needs additional fi nancing

through a traditional lender, the process can be difficult. Each investor
must be checked out financially and everyone must sign the closing

documents.

The more TIC members you have, the more difficult it is to get
the deal done.
I like using the LLC partnership because this allows you to have
great control over the deal. There is one chief, and it ’ s you. There is
one primary decision maker, and it ’ s you, regardless of the number of
partners. You only rarely need to ask partners to vote on matters, and
even then it ’ s not a unanimous vote but a simple majority.
I do not mean to imply that you should ignore your partners. I ’ m
simply pointing out that when you are considering Plan A and Plan B ,
and investors seem split on which path to take, you get to make the
decision.
This type of structure can make your life much easier. You can

thank me after your first couple of deals.

In the Next Chapter

We ’ ve been diving into the details a lot recently. It ’ s time yet again to
have a change of pace and look at the big picture.
In the next chapter I present principles that are potentially worth
millions to you, if you choose to do lots of commercial real estate
deals.

181

10/14/08 11:21:47 AM
c08.indd 181 10/14/08 11:21:47 AM
c08.indd 181