The former home of a disgraced public figure can present a great investment opportunity for a buyer willing to overlook the property’s sorted past.
Key Details
- When public figures are caught in a scandal, their property is often seized or sold to cover court fees or pay back debts. A savvy buyer can sometimes land a bargain deal for property with a history attached.
- Infamous Ponzi scheme fraudster Bernie Madoff’s Upper East Side apartment sold for $8 million after the federal government seized it—20% of the apartment’s original list price. A few short years and some renovations later and the new owner sold the apartment for $14.5 million.
- Shortly after the college-admissions scandal, Lori Loughlin’s Bel Air mansion sold for $18.75 million—half of the original list price.
- Jeffery Epstein’s Manhattan townhouse sold for $35 million below its original listing price.
Why it’s news
Buyers can often be deterred by a home with a history, but if they can look beyond the previous owner’s record or misdeeds, there is potential for profit—or just a bargain luxury home.
Some buyers aren’t concerned with the home’s history as long as the misconduct didn’t happen inside the home. Micahel Perry redecorated another one of Madoff’s residences for its new owners. His clients were able to make a $3.4 million profit after renovations.
“It wasn’t like [Madoff] brought people in there and did terrible things inside the house. It has a different stigma,” Perry says.
Other homes, however, are better suited for clients interested in demolition. Developer Todd Michael Glaser purchased Jeffrey Epstein’s Palm Beach residents for $18.5 million—$3.5 million under the listing price. The mansion, which had been used while Epstein trafficked under-aged girls, was demolished. Glaser later sold the property for almost $26 million.
The homes of disgraced public figures may carry a stigma, but for investors with the available capital, the chance to swoop in and purchase these pariah properties could prove to be a profitable investment.