Need help with $100,000,000... Believe it or Not- I need help.

[theag]

 

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[throttleforward]

Okay, I have been presented with an opportunity.

Have property worth $ 100,000,000, residential. It is being sold circumstantially, or if circumstances meet what the owner needs. I don't need to give the full details of it.
---

End goal is simple- Find a way to circumvent payment to live on the property, profit from the property and enjoy life on such property.

Has 20 bedrooms, 13 bathrooms, in one of America's largest cities. Lovely, LOVELY real-estate. Number of pools, bowling alleys, large garage, home for the housing staff, etc...

Now the details:

Property I want sold at $ 100,000,000. I can not afford it presently. Nor can many people in America, or on earth.

I want to start a fund to "buy" the property, run by no one else but myself.

In this fund, I want to offer the property to people, for "rent." I am thinking 12 parties/people to rent this out a month. This would give them 1-2 bedrooms to use, (with 1 bedroom "free" for myself to use).

This would allow them to also use all the other amenities of the mansion, pools, kitchens, living rooms etc...

The mortgage would range at 380,000-400,000$ a month with real estate taxes etc.
12 parties at a rental rate of $50,000 a month is $ 600,000 a month.
That leaves $ 200,000- for the fund (myself)...a month.
I can charge as low as $32,000 a month, I would walk away with $4,000 a month in income for myself, while still maintaining residency at the property, and having no housing expenses what-so-ever. Will "manage" the property, etc., as a part-time little job for myself as I pursue other things.

I will consider renting it out to less people as long as they pay for the bedrooms that would have otherwise been rented out. If you can really find a buyer for the entire property, I will gladly give you a commissions check.

---
What I need help with... CONTACTS. Know anyone who wants to move to a major city on the East Coast?

Let me rephrase- What is faulty about this plan?
Wasn't sure where else to post this. I just received the phone call earlier today to go through with it, and if I can make it happen- I'll be a very happy guy.

Thanks!

You think someone who makes $2m/yr wants to rent 2 bedrooms in a shared house with 11 other roommates?

 

[MJ DeMarco]

I didn't look through everything in regards to maintenance and clearly didn't include that in my price per room calculation.

Reminds me of guys who buy Lamborghinis because they suddenly can afford the $1,400/mo car payment while living at home--- and then forget the insurance is $1K/mo with $350 oil changes.

Numbers do not lie. If you don't look at them, your mind will fill the void with fairy tales and pipe dreams.

 

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[MJ DeMarco]

The market for this might actually be millionaire entrepreneurs who want to live as billionaires... and actually live with other entrepreneurs who are in the same boat. If I was single and in a growth stage of business, I could see shacking up with 20 other entrepreneurs and this experience potentially being worth it.

 

[MJ DeMarco]

live rent free, earn income.

You realize that the upkeep and maintenance costs on this place would likely be about $200K/mo? That isn't even accounting the mortgage or lease. You would be running a hotel. There would be no kicking back and "earning income" -- this would a full scale RE operation.

 

[throttleforward]

this would a full scale RE operation

Wait - that sounds like work! Next idea...

 

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[throttleforward]

If someone can do it with college students and profit, why can't someone do it with the affluent and wealthy?

A major part of sales is understanding your target demographic. College students are vastly different from affluent/wealthy individuals, with different needs, desires, etc. It's not about math, it's about psychology and sales.

Edit: I see this as a much stronger possibilty if you "apartmentize" the place, with independent bathrooms and bedrooms for each "unit." My grandma lived in such a mansion for decades.

 

[Veloce Grey]

Let me rephrase- What is faulty about this plan?

Thanks!

Well the obvious one is you're massively misjudging how much people value their privacy. $50k a month for a room or two sharing the place with 12 other people/families? It's like you're stuck between being the worlds most expensive backpacker hostel or worst serviced hotel.

 

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[MKHB]

Try @MKHB

Hey @Leo Hendrix

This is was a probate sale a couple of years ago, they picked it up for 13.8M and are trying to unload it for 100M. They (new owners) are not going to enter into any deal/arrangement with anyone other than all cash, pre-vetted buyers. They are trolling for a sovereign fund or HNW investor that is looking to park offshore money in a solid US trophy asset, e.g., Chinese, Russian, Middle Eastern.

Appreciate the initiative @iAmTrade , but you might want to scale down your approach a bit, how about a live/work incubator in Scottsdale AZ? https://www.thefastlaneforum.com/co...ive-at-the-starbucks-in-say-scottsdale.61623/

 

[RHL]

This is was a probate sale a couple of years ago, they picked it up for 13.8M and are trying to unload it for 100M. They (new owners) are not going to enter into any deal/arrangement with anyone other than all cash, pre-vetted buyers. They are trolling for a sovereign fund or HNW investor that is looking to park offshore money in a solid US trophy asset, e.g., Chinese, Russian, Middle Eastern.

Ten minutes is the difference between goodness and greatness.

That ten minutes of research was all that was needed to figure things out.

 

[Andy Black]

I've no idea what the thread's about. I love this though!!! ^^^

 

[jon.a]

I don't see how you're going to get this financed? Or, do you think the owners will just give a nobody a master lease?

 

[JustKris]

What's NOT faulty about this plan? Here are just a few red flags:

1. Qualified applicants. You'd need people with an income of 150k a month. Obviously since you're near the city, there are plenty of hedge fund guys who have that kind of money. But I can't see anyone with that kind of scratch wanting to spend 50k a month on rent to be a roommate in a "party mansion".

2. Location. I could find 5 friends and live in a baller mansion in the Hollywood Hills for maybe 5k each. Why on earth would I spend ten times as much for the same lifestyle in Long Island, even if the mansion is gorgeous?

3. Valuation. Just because they list the mansion at 100MM, doesn't mean it's worth that much.

From the NY Post (http://nypost.com/2015/09/14/live-like-the-great-gatsby-in-100-million-long-island-castle/) ---

"The current owners bought the property two years ago for $15.85 million."

LOL. It's 6x more valuable now because...math.

4. Why would I sign a 5 year lease on a residential rental? To lock in the low, low price of 50k a month? That would just remind me I'm throwing away THREE MILLION DOLLARS to live with a dozen roommates.

5. Like MJ said, you are seriously underestimating the taxes, upkeep, and work on your part to keep something like this going.

 

[Ecom man]

As a person who should clear near 3/4 of a million in profit this year, I would never do this in a million years. If I am spending any large amount of money for rent/house payment (5k, 10k, 50k etc. a month) I would want the privacy of my own home/apartment. I have a hard time believing entrepreneurs would want to pay 50k a month to rent a room in a mansion. If you run it like a hotel/vacation rental where it is x per night or x per week for a room then It would be cool to rent a room for a few days or even a week.

 

[Deleted35442]

That exists. It's in Silicon Valley, and it's for a fraction of the price.

For example, I stayed with a friend who's in a $3.5MM house. 9 people total in the house. Average company valuation of people living there at $5MM. He's paying $1,200 a month to share a small bedroom. So for $2,400, he can have his own bedroom/bathroom (studies show that physical proximity to people make you closer and more trusted; do you really need more?). On top of that, he can walk down one block, and step into an $8MM startup house. A block further, a $4MM hacker house. A block further he has Stanford where he can recruit anyone, etc.

Access to all the top talent in the world. Costs as cheap as $1,200 a month. Human capital value a lot higher than paying $50k a month to live in the Gatsby house.

^ This guy gets it. Look, the market for a conducive co-living environment for entrepreneurs does exist and there's much demand for it in places like here in NYC. Look at the success of WeWork, they do what you're proposing with office space and are taking off fast and expanding globally (supposedly leasing new office space by the week). Taking it that step further with co-living space is even more lucrative AND interestingly enough, while this might be happening in places like Silicon Valley, etc, it's starting to catch on big time here in NYC and one of the only guys starting this are called Founder's House where people are more than happy to pay $1200 a month to bunk in a room of 3 other guys in places like Dumbo, Brooklyn.

I pitched this to a very well off individual that I'm collab'ing with ($100mm net worth at least) here in NYC and he sees the value in it. Not to go completely off-topic. But if you have cash, some time, and want a part in this, hit me up.

I think I speak for every millionaire or aspiring millionaire here when I say that these guys don't really want "roommate situations" after they've made it and like to fly under the radar after that time and have their own pad. Look what approximately one month's rent at your mansion gets you for a whole year in Gramercy (Manhattan), right by Union Square Park. 3bd: https://newyork.craigslist.org/mnh/nfb/5345357230.html

As far as the value proposition for this project @iAmTrade. It's weak and you couldn't sustain this if you had even one vacancy. Your costs are way too high, your margins way too slim, and there are too many uncertainties that @JustKris @MJ DeMarco @theag and @Ubermensch addressed.

 

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[Ubermensch]

$50,000 a month to rent a room in a mansion with other people? What people in what world do this? I could buy a mansion by the end of the year in a place like this. I could lease an entire mansion to myself for $10k a month. And why do I sense you have anxieties about disclosing the city it's in? I'm in NYC, how about you? Sounds like NYC. I have plenty of contacts you'd want to speak to but why would they be interested in this?

The way you put it makes it sound really dumb.

 

[AgainstAllOdds]

http://time.com/money/3585583/worlds-most-expensive-houses/

#10 on the most expensive houses in the world is valued at $100MM. It's doubtful the place is worth that much.

Furthermore, people that wealthy don't want to live with other people. Even if you get Bill Gates, Warren Buffett, and Elon Musk in the same house ... what percent of the wealthy will sacrifice their ability to have their own home in exchange for the privilege of spending $50k a month on a roommate situation?

You have to find people without families, that are ultra-rich, and willing to blow money on a roommate situation ... probability of you finding 12 parties like that is next to none.

 

[Duane]

If I somehow was able to purchase this, I would look into it being a daily rental kind of thing and try to increase the amount of bedrooms in it. I doubt you'd make this work trying to rent 20 rooms out monthly, your mortgage makes it damn near impossible. Your safest option if you could get this thing would be to rent out rooms/night for a high value and charge for the activities that are on the property.

But honestly, if you're looking to purchase a large home with 20 bedrooms to rent out to people and live for free and you actually have experience to be able to manage these kinds of things. Why not just get a 20 bedroom or whatever apartment in a decent area for a few mill and rent those apartments out monthly? You don't have to make 12k a day to pay for the place and you can cash flow nicely.

 

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[Ubermensch]

Okay, I have been presented with an opportunity.

Have property worth $ 100,000,000, residential. It is being sold circumstantially, or if circumstances meet what the owner needs. I don't need to give the full details of it.
---

End goal is simple- Find a way to circumvent payment to live on the property, profit from the property and enjoy life on such property.

Has 20 bedrooms, 13 bathrooms, in one of America's largest cities. Lovely, LOVELY real-estate. Number of pools, bowling alleys, large garage, home for the housing staff, etc...

Now the details:

Property I want sold at $ 100,000,000. I can not afford it presently. Nor can many people in America, or on earth.

I want to start a fund to "buy" the property, run by no one else but myself.

In this fund, I want to offer the property to people, for "rent." I am thinking 12 parties/people to rent this out a month. This would give them 1-2 bedrooms to use, (with 1 bedroom "free" for myself to use).

This would allow them to also use all the other amenities of the mansion, pools, kitchens, living rooms etc...

The mortgage would range at 380,000-400,000$ a month with real estate taxes etc.
12 parties at a rental rate of $50,000 a month is $ 600,000 a month.
That leaves $ 200,000- for the fund (myself)...a month.
I can charge as low as $32,000 a month, I would walk away with $4,000 a month in income for myself, while still maintaining residency at the property, and having no housing expenses what-so-ever. Will "manage" the property, etc., as a part-time little job for myself as I pursue other things.

I will consider renting it out to less people as long as they pay for the bedrooms that would have otherwise been rented out. If you can really find a buyer for the entire property, I will gladly give you a commissions check.

---
What I need help with... CONTACTS. Know anyone who wants to move to a major city on the East Coast?

Let me rephrase- What is faulty about this plan?
Wasn't sure where else to post this. I just received the phone call earlier today to go through with it, and if I can make it happen- I'll be a very happy guy.

Thanks!

Something about this deal doesn't feel right. This could be due to faulty interpretation on my part, and may have nothing to do with the soundness of your plan.

That said, if someone brought a deal like this to me, I'd ignore it and continue to focus on what's already making me money right now.

How much do you plan to make with this plan?

 

[Deleted35442]

Okay, I have been presented with an opportunity.

Have property worth $ 100,000,000, residential. It is being sold circumstantially, or if circumstances meet what the owner needs. I don't need to give the full details of it.
---

End goal is simple- Find a way to circumvent payment to live on the property, profit from the property and enjoy life on such property.

Has 20 bedrooms, 13 bathrooms, in one of America's largest cities. Lovely, LOVELY real-estate. Number of pools, bowling alleys, large garage, home for the housing staff, etc...

Now the details:

Property I want sold at $ 100,000,000. I can not afford it presently. Nor can many people in America, or on earth.

I want to start a fund to "buy" the property, run by no one else but myself.

In this fund, I want to offer the property to people, for "rent." I am thinking 12 parties/people to rent this out a month. This would give them 1-2 bedrooms to use, (with 1 bedroom "free" for myself to use).

This would allow them to also use all the other amenities of the mansion, pools, kitchens, living rooms etc...

The mortgage would range at 380,000-400,000$ a month with real estate taxes etc.
12 parties at a rental rate of $50,000 a month is $ 600,000 a month.
That leaves $ 200,000- for the fund (myself)...a month.
I can charge as low as $32,000 a month, I would walk away with $4,000 a month in income for myself, while still maintaining residency at the property, and having no housing expenses what-so-ever. Will "manage" the property, etc., as a part-time little job for myself as I pursue other things.

I will consider renting it out to less people as long as they pay for the bedrooms that would have otherwise been rented out. If you can really find a buyer for the entire property, I will gladly give you a commissions check.

---
What I need help with... CONTACTS. Know anyone who wants to move to a major city on the East Coast?

Let me rephrase- What is faulty about this plan?
Wasn't sure where else to post this. I just received the phone call earlier today to go through with it, and if I can make it happen- I'll be a very happy guy.

Thanks!

$50,000 a month to rent a room in a mansion with other people? What people in what world do this? I could buy a mansion by the end of the year in a place like this. I could lease an entire mansion to myself for $10k a month. And why do I sense you have anxieties about disclosing the city it's in? I'm in NYC, how about you? Sounds like NYC. I have plenty of contacts you'd want to speak to but why would they be interested in this?

 

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[Fox]

Start a website with a reverse auction to win the house. Launch viral campaign about the house and the competition. Sell house for $100m.



Have in the small print that you come with the house.

 

[AgainstAllOdds]

The current owner is losing a lot of money on the property just because it is sitting there.

By signing on with you he's losing the opportunity to sell the home at full value. If someone can afford a $100MM piece of real estate, then they can afford to sit on it.

 

[Leo Hendrix]

Try @MKHB

 

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[Andrewski]

No one will pay that kind of money to rent a room. Only way I see this working is if the property is near some tourist attractions. Advertise the crap out of it and rent each room for 1k/night. Now you have a large range of potential customers. 1k x 20 rooms x 30 days = 600k

But then you have to hire staff for advertising, bookings etc. plus you'll have vacancies.

 

[Duane]

I'm sorry, but I don't believe this. As @AgainstAllOdds says, the top 10 most expensive house is valued at $100 mill and it has 60 bedrooms. Why is yours worth 100 mill and only has 20 beds?

 

[iAmTrade]

You realize that the upkeep and maintenance costs on this place would likely be about $200K/mo? That isn't even accounting the mortgage or lease. You would be running a hotel. There would be no kicking back and "earning income" -- this would a full scale RE operation.

I didn't look through everything in regards to maintenance and clearly didn't include that in my price per room calculation. From what I gathered just moments ago for the property size, 40-50k$ a month would suffice. Thanks on the tip-out to look into it.

Definitely need to.

 

[AgainstAllOdds]

The market for this might actually be millionaire entrepreneurs who want to live as billionaires... and actually live with other entrepreneurs who are in the same boat. If I was single and in a growth stage of business, I could see shacking up with 20 other entrepreneurs and this experience potentially being worth it.

That exists. It's in Silicon Valley, and it's for a fraction of the price.

For example, I stayed with a friend who's in a $3.5MM house. 9 people total in the house. Average company valuation of people living there at $5MM. He's paying $1,200 a month to share a small bedroom. So for $2,400, he can have his own bedroom/bathroom (studies show that physical proximity to people make you closer and more trusted; do you really need more?). On top of that, he can walk down one block, and step into an $8MM startup house. A block further, a $4MM hacker house. A block further he has Stanford where he can recruit anyone, etc.

Access to all the top talent in the world. Costs as cheap as $1,200 a month. Human capital value a lot higher than paying $50k a month to live in the Gatsby house.

 

[Achilles]

nvm gatsby house. I think the problem lies in getting the owner of the property to take on rent purchase, unless he is some form of distressed. Secondly, the odds of anyone wanting to live in Kingspoint with 150k a month money to want to live with a bunch of strangers is slim to none. I dont see it. Unless Gatsby has some magical value to it and touched their lives.

 

[Antw]

This sounds like a cool concept. Just asking... Is all of this hypothetical or did you speak with the owners of the home? Is he/she willing to go with a deal like this? From my travels not all people that have properties they don't live in are in dire need to sell them.

Also, it looks like the home used to be owned by billionaire Tamir Sapir and was purchased by the current owners for 15.85 million and they never moved in.

 

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[liquidglass]

I know the original point and question have been thoroughly answered and/or nullified. But I would like to point out two things.

1) two years ago the house was valued at just over $30M. I don't like your math or the owners math and I would hesitate do business with either of you.
(unless the buyers intentions were in line with @MKHB of course)

2) "millionaires living like billionaires" doesn't work with the billionaires are sharing a house. In that case they would better off to live like millionaires and have their privacy.

@AgainstAllOdds is right about this kind of thing around silicon valley...however, you still would be losing money with the costs associated.

Have gotten that answer. It works with a certain demographic, upon where people currently making a few Million $ a year are more interested in owning as opposed to living in anything co-op.

You needed a other people to tell you that?