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TR U M P STR A TEGI ES FO R R E A L ESTA TE

in mind thehuge size of Trump projects, and that relatively speaking,
15 percent is a big number. If we’re talking about building a $300 mil-
lion building, then 15 percent represents $45 million.
Trump often has some group or large company participating as a
partner. It may be a huge corporation such as General Motors (GM)
or General Electric (GE). With partners such as these, Trump can get
a very favorable large loan well below the prime rate and often without
the need for a mortgage and payment of the recording taxes involved.
Without these types of partners, Trump could never get that kind of a
loan. When GM borrows from a bank, they get a low rate based on
their credit, so Trump likes to work with these kinds of partners.
Working with monied outside investors enables him to participate
in many transactions without a monster exposure of dollars in a par-
ticular development. The Trump Organization furnishes the time, the
effort, the expertise, the staff, and the management for the entire
project. The sole function of the outside investors is financial.
Small investors can and should use a similar approach in financ-
ing their real estate investments. This chapter describes key princi-
ples for raising money from banks and investors, such as establishing
lender relationships, knowing how much to borrow, and knowing
methods of attracting investors. These are all instrumental to suc-
cessfully investing in real estate, regardless of the scale of your proj-
ect. By following Trump’s principles for real estate financing set
forth in this chapter, you can also avoid the costliest mistake many
investors make—using short-term money for long-term projects.

INVESTING CASE STUDY

THE GM BUILDING

The GM Building in New York City is massive. Built by General Mo-
tors as its headquarters, it’s a two-million square-foot 50-story struc-
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