Trump's Real Estate Empire Is Doing Something Unusual

The Trump Organization keeps the details of its financial operations close to the vest, but the Washington Post uncovered something unusual about its real estate strategy: It's been paying cash for properties and forgoing the usual practice of securing loans. Specifically, the Post found that the president's company paid $400 million in cash since 2006 on 14 properties including golf courses, homes, and a winery. The practice not only defies the norms of the real estate industry, but runs counter to the "borrow as much as you can for as long as you can" credo of Trump, the self-titled "King of Debt." Details:

• Trump explanation: Nothing strange about it, says Eric Trump. The company became so flush with money thanks to rent income, licensing deals, etc., that it became easy to buy properties outright, and more nimbly, with cash. “He had incredible cash flow and built incredible wealth,” Eric says of his father. “He didn’t need to think about borrowing for every transaction."

• The purchases: They include $79.7 million for golf courses in Scotland and Ireland, as well as a winery in Virginia, two homes in Beverly Hills, and five other golf courses on the East Coast. (Not everything was cash: In the same period, the Trump Organization did make two major property purchases through loans from Deutsche Bank.)
• Unusual: Paying cash "defies most contemporary thinking, namely that investors tend to prefer borrowing," notes a post at the Real Deal. That way, if an investment goes sour, the liability is spread out. The golf courses in Scotland and Ireland, for example, have been money losers so far, with Trump spending $164 million in cash since 2014 to keep them running, per the Post.
• Key question: Post reporter David Farenthold tells Slate that the next step in reporting is to examine more closely where all this cash came from. "Nothing that I have seen from the outside indicates that they have that level of liquidity," though he acknowledges that he may have not "seen the whole (Trump) universe" yet. Getting a handle on the organization's cash flow "would help us understand a little bit more the context around Eric’s explanation."
• Past comments: At Splinter, David Boddiger finds that the story raises as many questions as it answers about the incredible reserve of cash, and he resurrects two old quotes suggesting, yes, a Russian connection. In 2014, Eric Trump said: "We don’t rely on American banks. We have all the funding we need out of Russia.” And in 2008, Donald Jr. said that "Russians make up a pretty disproportionate cross section of a lot of our assets.”
• On TV: Farenthold also discusses the story on MSNBC in this video. He sums things up thusly: "The question was why would you defy something that is basically at the core of his identity as a developer," he says, referring to Trump's previous heavy borrowing. "And the answer from the Trumps was, basically, they felt like it."

(More President Trump stories.)