Kevin O’Leary dismissed the fraud case against Donald Trump as a charge that “doesn’t make any sense at all The comedian remark that “you’re required to be suing every real estate agent all over the world.’ Here’s why
James seeks the sum of $370million in penalties. James intends to stop James from conducting real estate in the state for the rest of his life.
However, not everyone believes the case is a valid one. As an example, Shark Tank star Kevin O’Leary has recently mocked the civil fraud trial.
“I believe this issue will be able to stand up to appeal, whatever the cost is. It’s absurd,” O’Leary said in an interview recently with CNN.
Here’s Mr. Wonderful’s explanation.
What developers do
O’Leary utilized as an example to illustrate the reasons why the real estate industry is keen to maximize the value of their properties.
“If you’re an entrepreneur and have an apartment in the area, anywhere in America that’s valued at, let’s say $500,000, and you’d like to construct a new building on top of it, you head into the banks and tell them”This property is valued at $500 million. I’d like to take out the construction finance loan against this property and I’d like to know if it’s worth $500m, as well in addition,’” he said.
The bank could not be happy with the appraisal and could value this property as $400 million. It could lead to discussions. According to O’Leary’s research developers, they want to present their properties “in the brightest light” in order to maximize their value as loans typically amount to 40% – 50 percent of the value.
In this case it is possible that the developer could secure an investment of $250 million against the asset of $500 million to finance construction.
Usual usage
O’Leary says that this kind of practice is commonplace among the residential real estate market.
“Forget about Trump”, every single real estate agent all over the world does this. They will always boast about their property having value and the bank doesn’t say. It’s the way things are,” He said.
Then he explains that this procedure is not a cause of financial loss to the parties that is involved.
“Who has lost money? Nobody. The bank was able to pay back on the finance for construction and a new facility was built.” the man said.
The widespread nature of the practices outlined by O’Leary suggests this is a larger industry issue, not a singular incident.
“If you’re going to sue this case and win, you’ve got to sue every real estate developer everywhere,” O’Leary said.
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