Evander Holyfield (Atlanta, Buckhead: real estate, Home Depot, buyer)

[GeorgiaLakeSearch]

Originally Posted by City Guy997S

Probably the wrong way to look at this house:

1. If a guy that earned 250mm couldn't afford it then how many people can really afford it?
2. Holyfield mentioned maintenance was 1mm a year, that is 83K a month, 21K a week, $3000 a day
3. Bank was asking 8.5+ and after a year was down to 6.8+ so this is not an easy sell. The area is certainly not the Hamptons, Beverly Hills or Miami Beach.
4. MC Hammer smoked through 30mm in one year, several rappers/sports stars have gone broke as their career dried up. Mr. Ross was a former prison guard, it is very possible he doesn't understand the time value of money and the value of diversified investments.
5. Mike Tyson had a similar home (similar size as well) in Connecticut and it was lost through divorce, then "fire-saled" to rapper 50 Cent who dumped millions into it only to find there are no buyers in that area for a house of that size. The house: 50 Poplar Hill Dr, Farmington, CT 06032 - Zillow

This is a good analysis. People sometimes have trouble figuring out the real cost of a house. You cannot just look at the sales price.

[ElleKaye]

Originally Posted by City Guy997S

Probably the wrong way to look at this house:

1. If a guy that earned 250mm couldn't afford it then how many people can really afford it?
2. Holyfield mentioned maintenance was 1mm a year, that is 83K a month, 21K a week, $3000 a day
3. Bank was asking 8.5+ and after a year was down to 6.8+ so this is not an easy sell. The area is certainly not the Hamptons, Beverly Hills or Miami Beach.
4. MC Hammer smoked through 30mm in one year, several rappers/sports stars have gone broke as their career dried up. Mr. Ross was a former prison guard, it is very possible he doesn't understand the time value of money and the value of diversified investments.
5. Mike Tyson had a similar home (similar size as well) in Connecticut and it was lost through divorce, then "fire-saled" to rapper 50 Cent who dumped millions into it only to find there are no buyers in that area for a house of that size. The house: 50 Poplar Hill Dr, Farmington, CT 06032 - Zillow

So what exactly are you disputing - that 8 mill was a bargain for that house, that the house looks impressive, or that boxing must have been good to Holyfield? I really don't see you addressing anything I said.

[City Guy997S]

Originally Posted by ElleKaye

So what exactly are you disputing - that 8 mill was a bargain for that house, that the house looks impressive, or that boxing must have been good to Holyfield? I really don't see you addressing anything I said.

1st off the house was last listed for 6.8, so in your eyes that is a bigger bargain right? The house is an anchor was my point......
1. Sold for about 25% of what Holyfield built it for new....75% depreciation!
2. After 6 years the maintenance costs will exceed the purchase price so you would essentially need 12mm to break even on ownership expense...... But remember it already depreciated 75% so increased values aren't happening.
3. Rough resale area.......Fayetteville is full of sub 500k homes so who is going to buy this place when it is clearly the nicest house the whole state with nothing nearby as far as comps?

Now lets consider the actual property:

1. House was built in 1994, essentially 20 years old and owned by a guy that went broke. So lets figure the house the size of a Walmart needs all the A/C units replaced, new appliances and a fresh coat of paint inside and out as well as a freshening of the landscaping......that would be easily 1mm gone
2. Furnishings/TV's- 12 bedrooms, a dining room that seats 100 people......safe to say Rooms To Go isn't going to be unloading trucks here! Lets say he bought some decent stuff but not crazy.......1mm for furniture, decorations and 500k on audio/visual stuff..........1.5mm

So now your steal of a home is 6.8 + 2.5 = 9.3mm and you still have to pay the taxes, utilities and upkeep....700k to go light and to even the total to 10mm! So your steal of a home already cost you almost 50% of your purchase price just to move in yet it hasn't gone up in value much........see the problem?

The house will be back on the market by the next bank that eventually forecloses for even less money! Smart people run from homes like this.......

[betheclub98]

Originally Posted by GeorgiaLakeSearch

There is a difference between how middle class families and HNWI or UHNWI allocate their resources.

I won't even dignify your last question.

Ok, don't dignify the last question. But you didn't answer the other questions either. Like I said, I don't condone it but based on the basic math it's not any different than said family in Kennesaw.

Prove me wrong.

[Mishap]

Originally Posted by betheclub98

Ok, don't dignify the last question. But you didn't answer the other questions either. Like I said, I don't condone it but based on the basic math it's not any different than said family in Kennesaw.

Prove me wrong.

How do banks underwrite your normal mortgage? They look at your current earnings/savings/home appraisal and do a risk analysis. Basically how much they can make collecting interest vs. having to foreclose and sell the house. The challenges w/ this house/income combo is you don't have a big market for this home...few dozen people in the country w/ that income would ever fathom living there. Then there's the income question...how many people in his profession earn enough income through their lifetime to sustain that level of cash burn. If he's Jay-Z or Diddy w/a multi-decade career, he might pull it off but he's already well past the avg career of your avg recording star.

He may have the cash up front but unless he plans on making platinum albums every year until social security kicks in, he's going to have a cash flow problem at some point b/c his career isn't like most people's where it climbs slowly and peaks in your ~50's to 60's. The house provides him minimal tax benefits, is completely illiquid, and is unlikely to be great collateral to borrow against (how Holyfield lost it in the first place).

He could have dropped the cash into muni bonds and enjoyed a few hundred grand/yr in tax free cash to retire on. Instead, he bought someone else's failed edifice to their vanity that includes a 7 figure maintenance bill.

[betheclub98]

Originally Posted by Mishap

How do banks underwrite your normal mortgage? They look at your current earnings/savings/home appraisal and do a risk analysis. Basically how much they can make collecting interest vs. having to foreclose and sell the house. The challenges w/ this house/income combo is you don't have a big market for this home...few dozen people in the country w/ that income would ever fathom living there. Then there's the income question...how many people in his profession earn enough income through their lifetime to sustain that level of cash burn. If he's Jay-Z or Diddy w/a multi-decade career, he might pull it off but he's already well past the avg career of your avg recording star.

He may have the cash up front but unless he plans on making platinum albums every year until social security kicks in, he's going to have a cash flow problem at some point b/c his career isn't like most people's where it climbs slowly and peaks in your ~50's to 60's. The house provides him minimal tax benefits, is completely illiquid, and is unlikely to be great collateral to borrow against (how Holyfield lost it in the first place).

He could have dropped the cash into muni bonds and enjoyed a few hundred grand/yr in tax free cash to retire on. Instead, he bought someone else's failed edifice to their vanity that includes a 7 figure maintenance bill.

I understand fully everything you've written. And for the most part I agree. But this analysis doesn't apply to my original question. The original article made no mention of his "income", it made mention of his "net worth". We can argue all day about his career, earning potential, etc. The point being made is that the family in Kennesaw is highly unlikely to have a net worth over 3.5x the price of the house they live in. And if they did, I guarantee you we wouldn't be on City-Data analyzing their decision.

[City Guy997S]

Originally Posted by betheclub98

Ok, don't dignify the last question. But you didn't answer the other questions either. Like I said, I don't condone it but based on the basic math it's not any different than said family in Kennesaw.

Prove me wrong.


I understand fully everything you've written. And for the most part I agree. But this analysis doesn't apply to my original question. The original article made no mention of his "income", it made mention of his "net worth". We can argue all day about his career, earning potential, etc. The point being made is that the family in Kennesaw is highly unlikely to have a net worth over 3.5x the price of the house they live in. And if they did, I guarantee you we wouldn't be on City-Data analyzing their decision.

Not any different than a family in Keenesaw, except celebrities (rapper/boxer whatever) tend to spend insane amounts of money on a whim while having bursts/droughts of income. The other thing is the local family won't have to spend 1mm (or 15% of the purchase price on upkeep of their home).
The family tends to have a steady income (which is why the bank would write the mortgage in the first place) and when you have a regular 9-5 job you probably can't "hit da club 5 nights a week" spending insane money on bottle service!

The other issue is net worth.....that is clearly a guess by Forbes magazine. Guessing on income, guessing on expenses/spending to come to a final number. Most celebrities admit that it is an inflated number when asked directly (Howard Stern loves to ask, "You really worth 200 million?").

The family in Kennesaw probably would have some retirement savings (401K at work perhaps) which could be tapped in an emergency......Ricky Ross, probably not so when his money runs out, it is goooonnne!

Wishing him the best, but the bank was the one that got off lucky finding someone to buy that anchor!

[UNITYinternational]

Originally Posted by Tarzanman

A music artist (rapper) with a big belly and lots of tattoos. Everyday he can be found hustling.

LMAO

[Galounger]

It's long been my understanding that there were five reasons Holyfield could not afford to keep this house in the first place. Child support, child support, child support, child support, child support.

[The Magician]

Originally Posted by Galounger

It's long been my understanding that there were five reasons Holyfield could not afford to keep this house in the first place. Child support, child support, child support, child support, child support.

lol. I think ross could've got it cheaper. It was still a bargain juat not a smart investment. Whether or not he's able to keep this property is unknown. I'd like to think that ross is a little smarter than evander and would look into making modifications to the home to mitigate costs.