What's up guys and welcome back to wall street millennial on this channel, we cover everything related to stocks and investing today we're going to do a video on former president donald trump before he was elected president trump built a real estate empire worth billions of dollars during The 2016 presidential campaign trump said that he was worth well over 10 billion dollars, but forbes estimates his net worth to be more modest at 2.4 billion dollars. Today, in this video we'll go over how trump made his fortune, including the six times he filed for chapter 11 bankruptcy protection on behalf of his businesses, we'll also come up with a crude estimate for his current net worth. This topic was chosen by our channel members. Members get to vote on some of our video topics and also get to access our backlog of videos before they release to the public.

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Donald's father fred trump made a name for himself throughout the early 1900s as a real estate. Local owning middle-class residential rental buildings in new york city donald first worked for his father's real estate company as an officer in 1971, when donald was only 24 years old. Fred trump made donald, the president of the family business, which he quickly rebranded as the trump organization by 1973. The trump organization was operating 14 000 apartment units across brooklyn, queens and staten island trump took on his first major project in 1978, when he developed the grand hyatt hotel next to grand central terminal in manhattan.

At the time, the space was occupied by the old commodore hotel, which is a dilapidated structure, with relatively little value, trump took out a 70 million construction loan, backed by his dad and the hyatt hotel chain to finance the remodeling of the building. He replaced the old brick facade with the modern glass look and completely redid the interior, increasing its value by hundreds of millions of dollars. This high profile success significantly raised his profile within the real estate industry. At the age of 32 years old he became a well-known man within the new york business community, but trump's ambitions were just getting started.

He took the profits from the hyatt project and bought the old bonwood teller building in manhattan. He demolished the building and used the land to build trump tower trump tower was a huge success when the building was completed, its condominiums quickly sold out and the site became a tourist attraction. The lower floors were dedicated to retail space because of the high foot traffic. In manhattan, trump could rent out these spaces for very high prices, riding high off the success with trump tower in manhattan.

Donald set his sights on atlantic city, new jersey, which is the second largest gambling city in the us after las vegas trump leveraged. His success with trump tower to secure hundreds of millions of dollars worth of financing from hotel company holiday corp to develop the trump plaza casino in atlantic city. He purchased a partially completed building from hilton for 320 million dollars, which he completed in 1985 and rebranded as a trump castle. Donald's, then wife, ivana trump managed the trump castle.

His biggest casino project in atlanta city was trump taj mahal, which opened in 1990. The casino cost a total of 1.1 billion dollars to build, which made the most expensive casino ever built at the time he financed it by issuing 675 million dollars of junk bonds. The bonds yielded 14 interest rates because the project was so risky, while trump has extensive expertise in residential and retail real estate in new york. He had comparatively little experience in operating casinos.

Casinos are very complicated to operate. You have to create the right type of entertainment, amenities to attract gamblers. You also have to make sure the odds of the games are formulated perfectly. If you make the odds too favorable for gamblers, you won't make enough money to cover the fixed costs of the operation.

If you make the odds too unfavorable for the gamblers, they'll leave for other casinos, the risks were exacerbated by the fact they took on so much leverage to finance the project with its interest payment so high. He was in a very vulnerable position. All three of his casinos needed to make industry-leading operating margins just for him to stay solvent with his attention stretched between his residential properties in new york and his three new casinos in atlantic city. Most of the casinos were mismanaged and achieved.

Mediocre operational results, the profits that they made were not enough to pay the interest payments in 1991. Just one year after its grand opening the trump taj mahal filed for chapter 11 bankruptcy protection, trump negotiated with the bondholders to restructure the debt they received. A 50 equity stake in the operation in exchange for lowering the interest rate and giving trump a longer period of time to pay off the principal around the same time. Another one of trump's businesses, the trump shuttle airline, was also having financial difficulties.

It used old boeing 727 planes which were very fuel inefficient. The venture failed to make any profits and went bankrupt in 1992.. He sold it to us air in 1992. In exchange for a cancellation of his personal debts associated with the project in 1996.

He consolidated his money losing casino operations into trump hotels and casino resorts which went bankrupt in 2009, with 50 million dollars of assets and 500 million dollars of debt after the restructuring trump's staking the taj mahal was reduced to just 10 percent in 2016, the taj mahal. Finally, shut down operations, as it was losing millions of dollars every month with no prospects of a turnaround over the years. Trump had six casinos that went bankrupt, the taj mahal trump plaza hotel and casino, plaza hotel trump castle and the trump hotels and casino resorts. While it's never a good thing to go, bankrupt trump has long bragged about his skills at negotiating bankruptcy settlements.

He largely kept each bankruptcy enslaved from his other business operations, so they only had limited effect on his business empire. One of trump's most successful real estate ventures was his purchase of the mar-a-lago mansion in florida. He first tried to buy it in the 1980s for 15 million dollars, but his offer was rejected. He then purchased land rights in front of the property and threatened to build.

What he called the ugliest building you've ever seen, which would obstruct the view of the ocean. This decreased the interest in the property from other buyers and he was able to purchase it in 1985 for just 7 million trump turned the property into an exclusive club for palm beach. Socialites the fee to become a member is two hundred thousand dollars with an additional fourteen thousand dollars of annual fees. The club had 21.4 million dollars of gross revenue in 2019 and is appreciated to be worth an estimated 160 million dollars, while trump's forays into the atlantic city casino market were largely business failures.

They were very successful at building his personal brand by the 1990s. He had become a household name, making frequent appearances on the front pages of gossip tabloids. He was viewed by the people as an ultra successful business mogul and he intended to use this to his benefit. He leveraged his fame to create the apprentice tv show on nbc.

The apprentice was a reality: tv show where candidates would compete to secure a job at the trump organization. It was a hit success and trump made 427 million dollars from licensing and endorsements between 2004 and 2015., given the extremely high value of the trump brand. Many real estate developers paid trump to be the public face of their projects and allowed their buildings to bear trump's name, even though he doesn't own any stake in them. In 2015 of the 17 trump branded properties in new york, only five were outright owned by trump trump makes an estimated 50 million dollars annually from third party properties bearing his name trump.

Also owns 18 golf courses in the u.s and scotland, similar to the mar-a-lago resort. His golf courses benefit from his personal brand. He is able to charge high prices to patrons. As of 2015.

His golf courses brought in 382 million dollars of revenue annually. The final way that trump leveraged his personal brand was with trump university, which ran from 2005 to 2010.. The university was unaccredited and offered classes in real estate, asset management, entrepreneurship and wealth creation. Over the course of its operations, it had about 7 000 students and generated 20 to 30 million dollars of gross revenue, while trump claimed that the vast majority of students had positive experiences.

Many have criticized the university for its aggressive sales techniques, as well as the fact that trump had only limited involvement in the teaching when trump was sworn in as president in 2016, he stepped down as ceo of trump organization but maintained his ownership. He passed on operational responsibilities to his two sons, eric trump and donald trump jr. While eric said that there is a clear separation between the trump organization and the trump white house, he sent his father quarterly profitability reports throughout the presidency. There were some controversies during the trump presidency around perceived improprieties, for example, the secret service paid 1.1 million dollars to rent to stay in trump owned, bedminster golf club, the trump campaign also spent between 10 and 17 million dollars of contributions to rent spaces at trump properties.

While these raise real questions about conflicts of interest, they're relatively small within the context of trump organization, which has billions of dollars of assets, the trump organization is not a publicly traded company, and thus we can only make rough estimates of his net worth. We know the organization owns either fully or partially 13 large real estate holdings, including trump tower trump park, avenue, mar-a-lago and others. The combined value of these assets is multiple billions of dollars. However, many of these properties were financed through debt and is unclear how much equity he owns in them.

He makes roughly 50 million dollars per year from third-party properties bearing his name. This is recurring revenue that has almost 100 profit for trump. The present value of these licensing royalties could easily be worth 500 million to one billion dollars. His 18 golf courses are estimated to be worth roughly 300 million dollars.

Forbes currently estimates his net worth to be 2.4 billion dollars, but this estimate seems quite conservative. His licensing agreement alone could be worth half of this estimate. Many of the trump organization's properties have been owned for decades. So they've had a lot of time to pay down principle on the loans.

Given the number of valuable assets. The trump organization owns donald's total net worth could easily be in excess of 5 billion, all right guys that wraps it up for this video. What do you think about donald trump's business dealings? Do his multiple bankruptcies make him a failure, or do they just exemplify his skills at navigating bankruptcy negotiations? Let us know what you think in the comments section below as always. Thank you so much for watching and we'll see you in the next one wall, street millennial, signing out.

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