Page 202 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

T HE A RT OF R AISING M ONEY

Raising money, whether it’s derived from investors, family, friends, or
borrowed from commercial lenders, is one of the most crucial ele-
ments in any real estate transaction. The use of borrowed money to
buy real estate serves several purposes: It gives you more leverage,
which enables you to purchase much more, often 20 or 30 times more
than what could otherwise be bought for cash; it reduces your equity
exposure; and the interest payments on the loan provide a signifi cant
tax deduction.
When Trump invests in a real estate project, he typically puts up
less of his own money than you might think. For example, he will of-
ten erect a building to either rent out the available space or sell the
residential units in it. Typically, his investors in the project will put up
85 percent while Trump puts up 15 percent.
Working with monied outside investors enables Trump to partici-
pate in many transactions without monster exposure of dollars in a
particular development.

From Trump Strategies for Real Estate: Billionaire Lessons for the Small Investor, by
George H. Ross (John Wiley & Sons, 2005, page 127).

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