April 10, 2020
Behind Trump’s Billions: How He Really Got His Real Estate

Behind Trump’s Billions: How He Really Got His Real Estate


President Donald Trump: a very polarizing
figure whose wealth lies at the heart of his public persona. For decades Trump has presented himself as
a self-made billionaire who started out with nothing more than a million-dollar loan from
his father. And yet, as it turns out Donald’s father,
Fred Trump, had a much bigger part to play in his son’s rise to prominence. In this video, we’re gonna look behind Trump’s
billions, to see how he really got his real estate empire. This video is brought to you by Cheddar, who
just released an awesome video on how some of the most expensive apartments in New York
City pay less property tax than your average home. Find out how by watching their video. The story of Donald’s wealth starts almost
a century ago with the rise of his father. Fred Trump was a true hustler. Having lost his father at the age of 12, Fred
had to learn how to work and the industry he got into was construction. He had built his first residential house by
the time he was 20 and he got into this business at a very opportune moment. You see, President Roosevelt had just signed
the New Deal, which among other things wanted to encourage residential construction, providing
very cheap loans and subsidies that Fred was very eager to take. In fact, from the 1930s onwards America enacted
housing subsidy after housing subsidy, starting with the New Deal, then with military housing
during World War 2 and finally with the post-war housing boom enabled by the GI Bill. As the American home ownership rate jumped
by 20% in the span of just 3 decades, Fred Trump amassed a fortune, largely enabled by
the vast sums he received from the government. In 1949 alone the FHA gave him a $26 million
loan to build two apartment complexes in Brooklyn: Shore Haven and Beach Haven. What’s interesting though is not that he
got rich using government money, which is actually pretty typical, but that he began
a massive campaign of funneling money to his children when he was just 40 years old. The numerous methods he used were simple,
but effective. Before building those two apartment complexes
in Brooklyn, Fred purchased the land they would be built upon using his company. He then created a trust whose beneficiaries
were his children and he donated the land to the trust. Now because Fred’s construction company
was no longer the owner of the land he would have to lease it from the trust through a
contract known as a ground lease. Under this contract, the trust would receive
over $60,000 a year for the next 99 years, creating a steady stream of income for Donald
who at the time was only 3 years old. But the ground leases were just the beginning
because over the next twenty years, Fred would start to transfer the buildings themselves
to his children. He’d buy a plot of land through an empty
corporation, building apartments on it with government money and the he would gift the
company’s shares directly to his children. Now, this isn’t a very complicated scheme:
in fact it actually incurs a lot of gift tax, which Fred doesn’t seem to have paid. If you go through his tax returns it shows
that he paid gift tax on only one out of the eight buildings he transferred this way. He built it through a partnership for $2.5
million in 1968 and a year later he gifted 15% of the partnership to each one of his
children. If you do the math the gift tax should come
close to $100k, but he only paid six and a half. Of course, it’s worth noting that Fred Trump
has been pursued by the State of New York multiple times during the 50s and 60s for
underpaying his taxes. Despite these issues though, he had no problem
obtaining millions of dollars in subsidies, no doubt thanks to his political connections. In fact it is during this period that Fred
built his greatest project, the Trump Village, for which he received $50 million from the
State of New York and which he would also pass down to Donald through questionable means,
but that happens later. After graduating from college in 1968, Donald
of course went to work for his father and this is when the wealth transfer really kicked
into high gear. In 1972 Donald and his father formed a partnership
to secure an $8 million loan to build Prospect Tower. Interestingly enough, even though it was Fred
who did all the work, most of the profits went to Donald. On top of his share from the partnership,
he was receiving consultancy and management fees, as well as everything tenants paid to
rent air conditioners. By 1975 Donald was getting over $300k per
year just from that building and if you sum up everything else, by the time he was 29
he had pocketed $9 million from his father. Of course, Fred’s goal wasn’t just to
enrich Donald, but to build up an image for him to help start his career. A 1976 profile of Donald put his net worth
at $200 million, when in reality the projects he was claiming as his own were really his
father’s. At the time, Donald was the president of the
Trump Organization, which carried with it a hefty salary, but on top of that he was
constantly receiving loans from Fred. In 1979 Donald received loans for a total
of $3 million from his father’s companies and the way these loans were structured is
very interesting. They did come with a certain amount of interest,
but it was paid back as soon as the loan was taken out and because the loan had no repayment
plan Donald was free to keep the money indefinitely. These loans and many more came flooding into
Donald’s wallet when he began his first project in Manhattan, converting the Commodore
Hotel into the Grand Hyatt between 1979 and 1980. The exact same loans would appear a second
time when Donald was building Trump Tower between 1980 and 1983. During this time Fred masterminded another
scheme for his children. Using multiple trusts, he’d buy off the
mortgages of at least 14 of his properties and he’d transfer them to the trusts, whose
beneficiaries were, of course, Donald and his siblings. Effectively, during the 80s Donald became
his father’s banker, even though he never actually provided mortgage loans, he just
pocketed the interest payments. By the end of the 1980s all the distribution
methods had transferred nearly $50 million to Donald from his father’s empire, but
that only emboldened him to take even bigger risks. In 1988 he bought the Plaza Hotel for over
$400 million and a year later he spent over $350 million on Eastern Airlines, which he
quaintly named Trump Shuttle. Most famous of all, of course, is Donald’s
entry into the casino business in Atlantic City. While that story is vast enough for a whole
video on its own, what matters is that when Donald’s casinos started failing in the
early 1990s it was Fred who propped things up. He personally gave Donald millions to prevent
his casinos from defaulting on their debts before bankruptcy proceedings could restructure
them to give the casinos more time to repay the loans. For example, Fred’s personal income skyrocketed
by an order of magnitude to $50 million, which incurred a tax bill of $12 million. During this time he made no significant debt
payments or charitable donations, and a frugal man like him would never just pay taxes because
he could, so the money must have gone somewhere. Around the same time, one of Fred’s employees
went to the Trump Castle casino, bought $3.35 million worth of casino chips and left without
placing any bets. Another technique Fred used was to actually
buy stakes in Donald’s properties and then to resell them back to him at loss a few years
later. In 1987 he purchased 7.5% of Trump Palace,
a 55-story building in Manhattan, for over $15 million. Just four years later Fred sold back his entire
stake for just $10,000 on the pretext that the business was failing even though it wasn’t. In fact, that very same year Trump Palace
sold 57 condos for over $50 million total. In the early 1990s, however, Fred’s health
began declining and he even started exhibiting symptoms of dementia. Because he still hadn’t transferred the
majority of his wealth to his children he began an impressive program to syphon everything
he had left to them without paying estate taxes before he died. In 1992 his children incorporated a maintenance
company which immediately became the subcontractor for all of Fred’s buildings. All the millions of dollars Fred’s properties
spent on repairs and improvements started going through this one company and they all
incurred a large markup. During the next few years the costs for Fred’s
empire went way up. In the case of Beach Haven, trash-compacting
services increased in price by 64%; janitorial supplies went up by 100%, and plumbing increased
by 120%. In 1994 Donald and his siblings also became
the managers of Fred’s buildings to further drain cash from his empire. By 1999 the methods Fred masterminded were
providing each one of his children with $2.2 million of income per year. Eventually, when the day came to transfer
the properties themselves, the only thing that mattered was at what price the buildings
would be valued and to that extent Donald and his siblings hired a notorious real estate
appraiser to help them out with their problem. Using a variety of methods, he brought down
the price of 25 apartment complexes with 7000 units to just $40 million. The most hilarious method of all was the way
he calculated two of the buildings in Trump Village to actually have a negative value. You see, in 1992 Fred removed those two particular
buildings from an affordable housing program so he could raise rents, but in doing so he
lost a tax exemption they had under that program. This created a one-time accounting charge
that, if you base your valuation on it, makes the building appear unprofitable even though
it definitely wasn’t. In the end, transferring Fred’s entire real
estate empire cost him $20 million. When Fred died in 1999 he had just $2 million
in the bank and all the properties he had spent seven decades to assemble were now in
the hands of his children. Here’s the funny thing though: just five
year later, when Donald’s Atlantic City casinos were once again nearing bankruptcy,
he convinced his siblings to sell the entire portfolio. In early 2004, Donald and his brothers and
sisters sold off the empire their father had spent his entire life assembling to a New
York City real estate investor for $700 million, officially bringing an end to the legacy of
Fred Trump. Of course, since then Donald has continued
doing business and today his net worth is estimated to be around $3 billion, so clearly
even though he got an immense kickstart from his father, he did achieve a lot on his own. And with regards to the legality of Fred Trump’s
tax-avoiding methods, even if they turned out to be criminal, the statute of limitations
for them has long since expired, so Donald can only be fined with penalties. Speaking of tax avoidance, New York City is
ripe with it, so much so that the owners of apartments worth hundreds of millions pay
less in property taxes than the average home, sometimes as low as 0.017%. If you’re curious how they’re getting
away with it, you should head on over to Cheddar, who did an awesome video on exactly this topic. If you don’t know, Cheddar’s channel is
the home to numerous fun videos that cover business and technology and if you haven’t
seen them you should definitely go and check them out and even consider subscribing. In any case, thank you for watching. You’re gonna see me again in two weeks,
and until then: stay smart.

100 thoughts on “Behind Trump’s Billions: How He Really Got His Real Estate

  1. lol he said just 14 million but the paper clearly showed 41 million. Fred was shrewd. Donald is his fathers son. One shrewd SOB. He just keeps winning.

  2. Trump's broke. That's why he's stealing money from everything he passes in the White House. He's literally squeezing blood from a turnip. Does Trump even know that every penny that he and his family steals, while in the White House belongs to the American people. I don't believe he knows that. I want to thank Trump and his family for all the hard work they are doing that will fill the American coffers, after he's out of the White House. And thanks for all the jail time the entire Trump family will do after the White House.
    Trump, not being able to read is really a bitch because of the consequencs to your family.

  3. Trump killing people by spewing hatred to undermine our way of life to manipulate situations by hurting our follow Americans who can't defend themselves against trump and his cockroaches who are using our delusion to take,change things to their advantage regardless of we the people trying desperately to stop trump from destroying our way of life !! Wake up things will only get so much more disgusting trump stupidity will kill more of our own needlessly over stupidity and hatred God bless you and God bless America !!

  4. Is it capitalism, or just plain greed? I know, let's ask Marie Antoinette….ooops, her ears can't connect to her mouth. Wish it was true of Trump.

  5. Youngs market company, bank of California bund Australian whiskey rice cartel thieving 5000 rogue river route 66 killers… goldfield nevada comstock ding of killers stirey county nevada gillman, 555 california street San Francisco, pg&e… home office, British columbia, ENGLAND ALBION…,BOSNIAN Don , isle of manuone

  6. Kiddie pornograoher of Gracie Glam Alexis Grace kahney karter alexis texas myfreecams chaturbate Pentagon defense district Paris UAE Singapore deli gujarati Maldives senagal

  7. Cia,KGB, MI5…. The hills st paul Minnesota mci dba sprint dba Verizon DNA Berkshire Hathaway Dba soverign trust v Virginia et all… 100-555 California street SF Shanghai bund China

  8. Dba king ranch texas , Dallas OpEc puppet Bush, coors,PayPal,…. Confederation Union, Southcom, Orik California- Toronto, York

  9. He was worth 9% of what he is worth now when his father died. He makes enough money to pay 150 million + in taxes every year. He owns 521 companies, half the size of France in land and over 900 buildings and houses, the vast majority fully paid for…

  10. If anything the video is motivational, anything is possible with a dream and hard work, ultimately the Trumps werent rich, theyre emblematic of the American dream.

  11. Trump is broke. If that stable genius simply put the money he inherited into a managed fund and did nothing. He would actually be worth billions today. He didn’t, he ran business after business into the ground, declaring bankruptcies as he went along and he is now trading insolvent. Trump is a failure and not some genius businessman

  12. Did All That On Tax Payer Government Money, Worse Than Food Stamp Welfare. Shame On You. Now He Is A President, Still On Government Money. Ugly American Bastards.

  13. The narration is either bad or it's my hearing. Every sentence is made of words. I had difficulty making out certain words at regular junctures throughout the entire narration! Does anybody have the same problem? The unnecessary background music only makes it worse. For me at least!

  14. No doubt Fred did what every father would like to do on a grand scale – provide for their kids – I sure cant imagine that kind of $$ but seems the descriptions are similar to other big time real estate family management. No mention of Swifton village (first deal at very young age) or the fact that while a number of his contemporaries were partying he was pouring through distressed property publications. This piece seems to be yet another interesting but ultimately unflattering Trump “reveal” – “Here’s how he REALLY did it”! …….kinda more of the same…..

  15. That's what a father does for his kids, TAXES HUH Tell me about anybody that doesn't Take advantage of loop holes , Trump is a Good man and a GREAT PRESIDENT !!!

  16. Daddy can you say that everything you did, I did,
    Ok son
    And daddy, can you maybe give me most the money you make
    Ok son
    Oh and daddy, can you hire people to do all the things you know how to do so that they can continue to do the foot and legal work while I just make myself the face of all your businesses and go on to be a grown spoiled brat? And pretend I worked hard
    Edit: sooooo his dad actually helped him with 700 million dollars since when his dad died trump sold out and sold all his dad's work he did for 7 decades….and got 700 mill…..not 1 mill…..

  17. What was Fred’s endgame? Did he mean to teach his kids anything or did they just never learn anything good from all this? Do they just take everything in life for granted now? They never learned to work or appreciate anything because was all just given to them? Was Fred proving he loved them or just using them for his own money game? Makes you wonder.

  18. A major difference between success and failure is the failure sees someones success and says they should take the fruits of his success. The successful person learns how others have become wealthy.
    The wealthy after they have done it the idea of, Mcdonalds, Ford, Amazon, Microsoft, Apple, Buffet etc etc etc. Difference, they did it. No one can choose the cards they are dealt. EVERYONE CAN CHOOSE HOW THEY PLAY THEIR CARDS.

  19. I'm sure the smallhats played a major role in all this seeing as they selected old Donald to be the president wicked wizardry at its best selah

  20. Do you fault him? This is a true success story!! I am looking to do the same thing for my kids…what do you live for? My kids are everything to me…

  21. Simple!!! He invests most of his money back into the system..because he knows how the vampires called Tax Collector's will pounce

  22. You forgot to tell the stories of 1. Trump flakes on paying interest payments to failing Taj casinos meantime sucking out the equity of the casino as what little money flow was coming in. Didn’t even make one interest payment to junk bond holders and bank lenders 2. Not paying subcontractors for work performed.

  23. you are pathetic, trump did not make the laws he follows them, if you don't like them , talk to your rep. every builder developer deals with the nutty system, they deal with crazy crap, inspectors who are not consistent, building codes that change constantly, jobs shut down because some neighbor cries. it is very difficult to be a builder, and produce fine buildings, trump has produced many fine buildings and taken excellent care of his employees, give the guy some credit, if you think he has broken the law ..call the police. or are you a little cry baby ???

  24. Sooo Donald acquired his Fortunes thru Tax incentives, Tax breaks, Tax Loopholes, Money Laundering, Tax evasion, And now he has Crafted the Tax Code for the WEALTHY + CORPORATE TAX WELFARE.
    The Bolshevik JEWS Really have this Banking FRAUD down to COMMUNIST Science.

  25. 1968 he graduated from college? Paid for by his father, got a third grade reading level I'm a genius hilarious

  26. This dude stupid af. He need to do what he does best and leave our nation under someone with more experience on Politics & human behavior.
    I think what he did before was the best career option dude could of chose…
    😂🤣😅
    PS: Don’t forget LETS ALL MAKE AMERICA TRAP AGIAN!
    Don’t forget guys, WE AMERIKANS have the right to “fuck her right in the pussy” with the confidence that we can still be applicable be a leader….
    A LEADER of a “top tier nation”. 🤯😤

  27. You need to catch up they've proven he's never been a billionaire .and his millions ? House of cards he may die broke

  28. Ha, I think that's nonsense. Doesn't take into account much of the shenanigans and says nothing about his bankruptcies…it's a white wash.

  29. We know a lot of people dislike Donald Trump. However if he had worded his actions correctly like most politicians, most of his moves would make sense. He is a really smart man. But loves to make a lot of enemies especially in the media.

  30. The rapist criminal monster is in jail while the first Jewish President is repairing all the crimes and the shame of his predecessor towards saving the union and its authority around the world. Unfortunately, it lived (1776 – 2089) in favour of a global citizenship and a planetary consciousness.

  31. tax avoidance is completely legal and acceptable and those financial skills are highly sought after, it's tax evasion that is criminal – ie. Trumps merely bent the laws but never broke them – it's a completely accepted business practice and is a professional approach instead of giving away money unnecessary, the flip side(that few critics consider) is that investors/developers/financiers who take financial risk to develop the economy+create jobs+wealth (of course they want to make money) don't get their money back from government if their plans fail and they lose everything and end up on skid row – "and so no quarter is asked and so none will be given either"

  32. At least Trump worked to make his millions. What I want to know is how the Clintons made $19M and Obama almost as much. Neither did anything warranting the earning of that amount of money.

  33. Great father and great children….this video is made by a man full of negativity who had nothing good to say….

  34. What a bunch of brilliant crooks. My money is MY money, my children will have to earn theirs like I earned mine, the best gift to children is to provide the tools to them and let them fly. Such a move by Fred Trump was very white of him, and a perfect example of the type of self entitlement people like him bred into generations of their rotten children, who became rotten adults, that would rather see the US destroyed than be an equal society.

  35. yeah but he has a beautiful eastern european wife 30 years his junior so his life is not like 100% great … hehe … no I believe you can make a living out of government subsidies. I am to0 lazy and stup?d but I believe it is possible. Just keep up with what the crazies in government support financially and you could be the next billionaire.

  36. What fortune? His money was inherited. He didn’t make his fortune out of hard work like Steve jobs, Oprah, etc

  37. This is typical spin. Hate the rich guy. It's three generations of having your shit together. Trump inherited somewhere around 100 million dollars. Instead of partying like a spoiled punk he turned it into several billion. He has a famous work ethic. He once had a secretary that said when she can to work in the morning she noticed that Trump was always there working. So she started coming in earlier and earlier. Finally she decided to show up at 4:30 in the morning. She was walking to the office when she came around the corning and saw Trump unlocking the office door. She said he looked over and said "Good morning" He has created thousands of jobs, improved the tax base of hundreds of neighborhoods and still the left hates him.

  38. I've invested my money in drugs, fine dining, expensive liquor, and cheap women. The rest I just wasted. I am a true connoisseur of good wine, and sleazy women. Wait…..Donald Trump did exactly the same thing….why ain't I rich too?

  39. Despite his sneakiness, you have to admire Fred Trump's business capabilities. Unfortunately it's wasted on his failure of a son Donald, but I guess that's the thing about intergenerational wealth.

  40. I am pretty much a trump hater but gotta learn how he got dumb amounts of land so maby I can someday be ritch or sompthing

  41. It's very apparent that Trump grew up with a silver spoon, we all can tell by his whiney rants and jackass spoiled brat tendencies.

  42. So Trump n Edison are cut from the same snake skin, They use the government to boost themselves up by pretending to be smart in one subject. But they really are just snakes using ppl to get rich so they can brag about it later on.

  43. Thanks for that Video, Fred Trump is now also one of my new Heroes on par with our Great President Donald J Trump, no wonder "America is Kicking Ass & Taking Tariffs!"

  44. Whaaaaat??!!  Trump is the best president we ever had.  He is a genius.  Sure he is not the richest, but … he sure is one of the smartest.  Besides, many rich billionaires are not presidents.  Better to be worth $10 billion and President than to be a nobody with 80 billion dollars.  He he … for sure Trump will win by a landslide again in 2020.  Democrats are finished.  Liberals are busy blaming Russia for being losers.  I have a secret to tell you = Democrats will never rule US.  Why?  Democrats are made up of lesboz, homoz, monkeys, brown chihuahuas south of the border mostly illegal, and other scum, all mostly criminals or immoral people with no ethics.  And being criminals with no ethics or morals they would drive US into the ground which they almost did under Obama.  And so the righteous people of US stood up to liberal scum and voted them out.  Democraps might as well give it up.  They are done.  Oh, and me be Independent Constitutionalist, not a Republican.  Just saying … there isn't one single Democrap candidate worth voting for this time.  But it will be fun to watch liberal candidate get drunk on election night with premature celebration just to find out after 1am that she lost hahahahaha.  Very funny – I was laughing for 2 years about that one.  Hahahaha!!!  Go Trump.  Make America great again.

  45. There is no longer the upper class, middle class or lower class. You're now either investor class or working class. Doctors are working class today unless they invest.

  46. what was left out: Before Fred Trump died Donald Trump tried to get his father to sell him the entire Trump Organization properties so that Donald could sell everything and use the cash to bailout his failing Atlantic City casinos. Without explaining anything or giving him a heads up Trump said to his father "here sign these contracts now". But his father suspected it was another one of his son's bad ideas and sent the contracts to Trump's sister Maryann Trump who was a lawyer and federal judge to read over. She immediately saw what her brother was up to and told her father not to sign any of the contracts. Trump had to rip up the contracts and do the deal with all of his siblings instead. Trump later filed for bankruptcy for his failing companies seven times. But his share of his father's fortune kept him out of being penniless. It's estimated that he received over $400 million in cash payments from his father all while his business was failing losing over $1 billion. Trump's never shown his company's books to confirm if he is now deeper in debt than the value of the property he still has. His loses were so big that he had to carry the loses from one year over to the next year for nearly a decade which meant he paid no taxes since he had more loses than profits. Without his fathers cash inheritance Trump would as broke as MC Hammer.

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