00:01
You are a real estate developer in downtown vancouver.
00:04
There is a property in vancouver you would like to purchase that will allow you to build a 50 -story condominium.
00:09
The cost to purchase the property will be $10 million.
00:15
To build and develop the condominium will be $80 million.
00:29
However, once the building is completed and sold off, the total profit from the project will be over $200 million.
00:39
You only have $50 million to buy and build the property, which means you have a shortfall of $40 million.
00:56
And the reason this $40 million is right here.
01:06
We have $80 plus $10.
01:08
It's $90.
01:10
You only have $50 million, leaving you short $40 million.
01:15
You did not want to get debt or loans from the bank or other parties for this amount.
01:20
What are two business structures you can use to obtain the remaining $40 million without going into debt? fully explained your answer.
01:33
So the two different business structures that could be quite helpful in obtaining this remaining $40 million are a partnership or limited liability organization.
01:43
Let's look at a partnership.
01:46
So partnership is the most viable and practical structure in this scenario.
02:12
As in this case, a partnership, the firm can look for other partners who can invest the remaining.
02:42
Sum of $40 million.
02:51
This contribution will not be in the form of debt, but rather the contribution will go towards the partnership by the members.
03:25
So it's not in the form of debt because you're not going to be making payments to them to pay this off...