expensive jets and real estate

[olasek]

Not sure if some of you watch the HGTV channel that has all the real estate stuff - people buying/selling homes, remodelling, etc. Once a week they have a show called "selling L.A" usually followed by "selling New York". Last night my wife was watching selling L.A.. (she loves glamour) and I was peeking too. Most of it was devoted to this one lady named Chris Holifield who owns this $28.5 mln mansion (it is obscenely huge from the outside, they gave us a short tour inside) and contracted an agent (she interviewed the agent sitting inisde this georgeous jet which attracted my attention in the first place) to sell her place in not more than 6 months, I guess she finally realized the place is bit too big for this seemingly single lady. But anyway, to make the story short, she owns Elite Aviation and is apparently one of a handful of women that own an FBO. But I wonder what came first - her fortune or her FBO. The lady organized a party in her hangar where potential EA clients were served caviar, champagne, there was a fashion show and a $2 mln Bugati on display and sexy female real estate agents were working the crowd which had one eye on very expensive jets and another on brochures describing her own home. They did not tell us if she managed to sell the place in 6 months, frankly I doubt it.

Oh well, such an inconsequential story that is.

 

[weilke]

But anyway, to make the story short, she owns Elite Aviation and is apparently one of a handful of women that own an FBO. But I wonder what came first - her fortune or her FBO.

She is a real-estate developer who owns a charter outfit.

 

[gogojinx]

She never did sell the house. She decided to continue living in it.

 

[frfly172]

She must have made her money in real estate and now she is following the old adage ,if you want to make a million in aviation start with two million.

 

[wabower]

For many such people the own/op costs of their jet is a rounding error in their net worth calculation. You almost gotta be around it for a while to appreciate how much difference exists between the way they do it compared to the others.

For example, a friend hauls his kid's basketball team around in his G-V. A sports team owner attends most of the road games but travels in his G-550 vs the team plane.

Another guy owns 6 waterfront estates on Long Island and a couple dozen more around the world. Cheapest one is said to be worth ~$25 mil. I flew for him for a couple of years part-time. When we were in Islip we could either stay at a hotel or use one of the houses. Also had a spare house for friends, crew, others to use in Beaver Creek, CO.

When we traveled around Europe or mid-east to places where he didn't have a house, he rented a floor at the hotels where we stayed in order to accommodate the traveling party that included 6 servants, an IT guy, chef, flight crew (or crews, depending on the number of planes) and other business and personal travelers in his group. Unbelievable.

 

[docmirror]

It sounds like a semi-good(well, maybe not seriously bad anyway) investment idea. If she's going to have an 'aviation unit' in her portfolio might as well go whole hog and buy an FBO. Depreciation, tax bennies, asset allocation to business, etc. You either have a 3mil run-rate per year, or you can have a 3.5mil run-rate that generates plenty of tax advantages and keeps the plane in a separate corp for depr.