MichaelRoss
May 18, 2008, 03:28 PM
Duane,
Thanks for adding some more.
I'd like to also add a few things... on Owning, or, shall we say, Buying With A Mortgage.
In Trump's "The Art Of The Deal" he mentions a story about selling a hotel. I think it was the St Moritz. And how Bond over paid because it (the hotel) would only Service a Debt of $X while Bond had paid $X++.
When Bond was sent bankrupt by his financier, he argued with them. Why call the money due when I have Never failed to meet an interest payment.
THERE is the clue. Bond didn't have millions sitting around waiting to Pay Off a hotel. It was all Interest Only.
Trump hasn't borrowed $1.2Billion so he can Pay It Off. Why would he do that? That'd take too much money out of his pocket to pay off the principal. If the debt is serviced by a casino, there is no need to OWN it. Service the debt and pocket/invest the remainder.
I work with a guy who has Bought some cranes. These things sell for around $400k NEW. He has three and another two due in a few months. The other crane drivers he works with call him a Tycoon in a joking manner. But the thing is... Anyone of them Could have done it. Because to buy a crane you do this... Order the crane. The waiting list is two years long. 3 months before the crane is due the crane company will ask for a 10% deposit. So once ordered you know you have 18 months to get your deposit together - wherever it comes from. Your only obstacle is the bank. In his case, they took equity out of an existing investment property as Additional Security for his first crane. For his next two, they didn't because they'd seen how he'd been Making Payments.
Cranes are a little different as the low end are usually sold like vehicles over a five year Lease. But the Principal is there. The WORK the crane does services its debt. All you need is the Mental Strength to Handle Debt of that level.
Tangent - Kind of. There is an Aussie Actor. He does Martial Art films. Lives in Thailand. A country where, depending on where you live, can cost as little as $40 a month to rent a place. When your income is not dependent on where you live, and has a tendency to fluctuate - like a no-name actor people have never heard of - then living in such a place helps you continue acting. Because a single pay check can go a long way. (BTW, foreigners are not allowed to own land in Thailand. The building, yes, but not the land.)
Michael Ross
Thanks for adding some more.
I'd like to also add a few things... on Owning, or, shall we say, Buying With A Mortgage.
In Trump's "The Art Of The Deal" he mentions a story about selling a hotel. I think it was the St Moritz. And how Bond over paid because it (the hotel) would only Service a Debt of $X while Bond had paid $X++.
When Bond was sent bankrupt by his financier, he argued with them. Why call the money due when I have Never failed to meet an interest payment.
THERE is the clue. Bond didn't have millions sitting around waiting to Pay Off a hotel. It was all Interest Only.
Trump hasn't borrowed $1.2Billion so he can Pay It Off. Why would he do that? That'd take too much money out of his pocket to pay off the principal. If the debt is serviced by a casino, there is no need to OWN it. Service the debt and pocket/invest the remainder.
I work with a guy who has Bought some cranes. These things sell for around $400k NEW. He has three and another two due in a few months. The other crane drivers he works with call him a Tycoon in a joking manner. But the thing is... Anyone of them Could have done it. Because to buy a crane you do this... Order the crane. The waiting list is two years long. 3 months before the crane is due the crane company will ask for a 10% deposit. So once ordered you know you have 18 months to get your deposit together - wherever it comes from. Your only obstacle is the bank. In his case, they took equity out of an existing investment property as Additional Security for his first crane. For his next two, they didn't because they'd seen how he'd been Making Payments.
Cranes are a little different as the low end are usually sold like vehicles over a five year Lease. But the Principal is there. The WORK the crane does services its debt. All you need is the Mental Strength to Handle Debt of that level.
Tangent - Kind of. There is an Aussie Actor. He does Martial Art films. Lives in Thailand. A country where, depending on where you live, can cost as little as $40 a month to rent a place. When your income is not dependent on where you live, and has a tendency to fluctuate - like a no-name actor people have never heard of - then living in such a place helps you continue acting. Because a single pay check can go a long way. (BTW, foreigners are not allowed to own land in Thailand. The building, yes, but not the land.)
Michael Ross
