In light of the faltering American economy, Donald Trump, the former president of the United States, has managed to end his financial crises, according to Forbes.
Trump, the 45th president of the United States, was mired in debt and cash-strapped property when he left the presidency.
Now, like magic, he has money and feels free to do business, thanks to the help of his powerful friends.
The day Donald Trump left the White House, he was $900 million in debt over the next four years.
To get out of this amount of loans, the person who has to pay them must perform tasks that are impossible for any company or institution, which has led some to expect the end of Trump’s economic empire due to the challenges it faces stared.
Deutsche Bank, Trump’s old lender, was planning to end its relationship with the real estate mogul. Two financial institutions, Signature Bank and Professional Bank, spread the news that they would cut ties in the wake of January 6, 2021.
Meanwhile, the Manhattan district attorney was close to charging the Trump Organization with a range of financial crimes, including falsifying business records, conspiracy and fraud.
Fortunately for Donald Trump, those predictions all turned out to be wrong.
In the past 15 months, the Trump Organization, which has been indicted, has managed to restructure all of its nearly $900 million in outstanding debt.
Two of Deutsche Bank’s toughest loans, totaling $295 million, have been paid off, with the former president selling his run-down Washington, DC hotel to an investment shop linked to former Major League Baseball star Alex Rodriguez and retired boxing champion Floyd Mayweather, thanks to helping some of the company. Linked to computer billionaire, Michael Dell.
Trump also refinanced $125 million in debt for a golf resort in Miami and reworked a $100 million mortgage on Trump Tower.
And it’s not just about paying off outstanding debt. Trump now has about $375 million in cash on hand, more than three times the amount he had at any time during his presidency, thanks to a series of deals.
How could he do that?
Trump got a little help from his near-billionaire business partner, Stephen Roth, who has a solid reputation in the real estate world, as well as the miraculous deal he struck with a shady investment firm called CGI Merchant Group.
He also found a lender linked to the Kushner family to replace Deutsche Bank, which had financed his projects for years and ignored his shortcomings.
Donald Trump needed the cash in June 2020, at that time he had $95 million, of which $65 million he had free access and $30 million under the control of Stephen Roth.
For most people, $95 million is a lot, but it wasn’t enough for Trump, a businessman who racked up $900 million in debt while campaigning.
Meanwhile, Trump wanted to sell his hotel in Washington, DC, and the property’s financial statements, which Ivanka Trump initially provided to her father, made no sense at all.
In exchange for the right to lease a government-owned building for 60 years, the Trump Organization agreed to spend $200 million on renovations and then pay $3 million in annual rent moving forward.
Trump cut the ribbon at the grand inauguration on October 26, 2016, 13 days before he won the presidency. Ultimately, a settlement of $750,000 was reached.
Despite the uproar at the time of its opening, the hotel business eventually took a turn for the worse. In the twelve months to 31 August 2018, the hotel’s operating income was just $900,000 – not nearly enough to cover the amount owed by the family Trump to Deutsche Bank, estimated at $6.2 million.
To save the day, the Trump Organization transferred $4 million from other Donald Trump companies to the hotel. The following year, the small operating profit turned into a loss of $2.1 million.
Against this backdrop, the Trump Organization has come up with a bold plan: sell the place for an exorbitant amount, and anonymous sources have indicated that Trump may be willing to accept $500 million — about twice what independent real estate experts believe the property is worth
Announcing the sale does not mean closing the deal, especially at this price. One of the bidders, a local investor named Brian Friedman, offered $175 million, 35% of the proposed price but more in line with industry estimates for the location. Trump rejected the offer.
The COVID-19 pandemic swept the world shortly after, and on April 3, 2020, the Trump Hotel laid off 237 employees.
Things remained quiet for a year and a half until October 2021, when rumors began to circulate that Trump had found a buyer willing to pay $375 million, a far cry from the $500 million that previously suggested, but still well above independent valuations.
The deal was completed in May and saved the former president and his family enough money to pay off his debt to Deutsche Bank, which was due in 2024.
Axos Bank Trump’s wand
Little-known Axos Bank played a major role in the return of Trump’s finances. With the money flowing, the former president now has the financial strength to deal with his debts, but his previous banking relationships have crumbled.
Rosemary Frablick has left Deutsche Bank, the prominent banker who helped Trump borrow hundreds of millions of dollars before she left the company.
Trump needed new lenders, and that’s where Axos Bank came in.
As a small institution, Axos Bank has $16 billion in assets, making it a small Wall Street entity. By comparison, lenders like JPMorgan Chase oversee trillions of dollars.
The bank is classified as a savings association, with restrictions on what it can lend to one person.
In June 2021, the bank said it could not lend more than $204 million to any individual. The bank revealed that its largest outstanding balance is $145 million.
Axos Bank did not hesitate at the opportunity to refinance Trump Tower, which is worth more than double Trump’s $100 million loan.
In February 2022, the bank lent $100 million to the former president. In a statement, the bank indicated that the transaction was for business only.
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Since Donald Trump left office, he has paid off loans on four properties and refinanced four others, removing an estimated $875 million in liabilities.
Trump had to refinance about $125 million of Deutsche Bank’s debt on his Miami golf resort, due in 2023. The property, Trump National Doral, was once a money magnet, with annual operating income of $12 million.
Trump now has $375 million, so he could theoretically pay off his loans entirely with his own money. However, it seems that he prefers to borrow more money, just because he can.
Trump still has a lot of debt — estimated at about $1.1 billion — but most of it isn’t due until 2028 or later.