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Is Donald Trump a Good Real Estate Investor?

In press footage from the first episodes of “The Apprentice” Donald Trump is shown to brag that he is the “largest real estate developer in New York.” As with many things that this larger than life personality has claimed, it’s not even close to the truth.

Donald Trump has made millions of dollars in a variety of different business’s and investments, he has had his share of loses and failures and has in fact declared bankruptcy four times. But in reflection, he can still claim ownership of millions of square foot of prime real estate, in some of the most prestigious zip codes in the world. So is Donald Trump a good real estate investor?

Here are his 3 biggest wins and losses on the real estate scene:

3 Biggest Wins

  1. Trump Towers, at 40 wall Street. Trump’s namesake and flagship building was bought for one million dollars and is now worth several hundred million-a sure winner!
  2. Grand Hyatt Hotel, which is still booming today and was part of the 40-year tax abatement Trump secured with the city of New York.
  3. Trump Place-The total redevelopment of this historic site was hailed as the most successful large scale development in Manhattan.

3 Biggest Losses

  1. Although it’s one of his great achievements, Manhattan’s West Side Yards, was also a crushing defeat for Trump. Trump wanted to use this largest undeveloped expanse of land in New York City, to build Television City, this led to a very public war with Mayor Koch that resulted in the deal falling through as the two men could not reach a compromise. Trump refused to sell the land to another investor for a huge profit and eventually he was forced to sell at a debt of $250 million-a big loss!
  2. Trump Casinos at Atlantic City went bankrupt 3 times, the Taj Mahal casino alone, was $3 billion in debt, after only one year of operation.
  3. His mansion at Rancho Palos Verdes, which he had to sell at a 40% discount off his original asking price.

 

Despite several high profile real estate profits, Donald Trump had a very significant helping hand in the form of a large loan from his father and benefited greatly from his expert advice and mentorship, as he himself was a success real estate investor. Trump even launched a mortgage company at a time when the real estate crash had already begun, telling borrowers that “The real-estate market is going to be very strong for a long time to come.”

This lack of insight perhaps points to a larger ignorance of the risks and benefits associated with long term investment in real estate. But what do you think is Donald Trump a good real estate investor?