If he had 2 billion dollars: Powerball Winner Buys Massive $25.5M Hollywood Hills Home

$2B before taxes anyway...

It doesn't even have a runway & hangar...

How long before this guy goes broke?

 

If he keeps buying hard assets like real estate, it will be a really long time before he goes broke. The ones who go broke do it by giving it away and spending extravagantly on things like vacations and stuff that quickly loses value like boats and other toys.

 

Fair point, but I don't think that too many big winners like this prove to have a high level of financial discipline.

 

I give him six months...

 

He should probably spend as much as possible since he's being sued by another guy who claims he's the rightful owner of the winning ticket.

 

I can't imagine choosing the Hollywood Hills as the place to spend my fortune. Malibu, Palos Verdes, and Santa Barbara might want a word. Maybe he's a Bosch fan and wanted to be "neighbors"

 

I'll take the over on that. What's the stakes?

 

Updated for 2023

 

Wife and I talk about this all the time.

If we win we're spending all of the winnings by age 70. YOLO!

 

Of course someone claims he “stole the ticket.” There will be new family members and others coming out of nowhere too, to claim he promised them they’d get a share of the winnings.

 

That's tippin' money for him at this point.

 

He reportedly took the cash option, so after taxes he nets about $550M or so.

Buying a house on a California hillside is definitely not what I'd do, but hell, I'd likely be blowing the same amount on airplanes, luxury hangars and boats if I was in his place, so I'm not throwing stones.

CA lottery has a pretty strict vetting process for winners. They almost certainly have the winner on camera buying this ticket at the exact time of record for that ticket.

 

I can feel pretty confident that I wouldn't be spending any of my winnings on Cali real estate. The other thing you gotta worry about with these $30MM Cali properties is the propert tax. Better make sure to sock away several million in a low-risk investment to earn enough money in interest to pay the taxes on the properties each year.

 

I can't imagine living anyplace where I can see other folks from my property. My dream is to have 4 sections of land and live in the middle.

But I do like the outdoor kitchen. Then my wife can cook all the stinky Filipino food she wants without rendering me unconscious....

(she cooks a lot of stuff in vinegar)

 

Do you remember the SnL spoof?

Let me tell you a little story 'bout a man named Abdul.
Poor Bedouin barely kept his family fed.
And then one day he was shootin' at some Jews
And up through the ground came a bubblin' crude.
Oil that is. Black Gold. Kuwait Coffee.

Etc.

You'll be hard pressed to find that video on Youtube. Turns out, it isn't politically correct...

 

Assuming you live in a space consisting of 2 or more dimensions, wouldn't you need 9 sections of land? (3x3 grid arrangement)

 

I think he was planning to build his house right over where all four sections meet, and call it Four Corners.

 

Unless this guy got it for way under market price, I think he is an idiot.
Is he going to be able to resell it without taking a whopping loss?
Being an ex cali resident, I wouldn’t invest in a bag of sand in that state

it is a cool place though

 

Yeah, just visit. $25.5M buys a lot of Airbnb stays, even swanky ones.

 

Not necessarily. A lottery win is a one time income event. But over buying on things such real estate that isn't generating continuing revenue can bankrupt you just as fast in utilities, maintenance, and property taxes. The purchase price is just the beginning. Real estate can be a decent investment, but it needs to be generating revenue to cover the future expenses.

Even if I won big money like that, my primary home would still be a modest house that fits my needs. I may buy additional vacation property, but would use as a rental property during down times in order to use as an investment.

 

Honestly, I probably wouldn't domicile though, but who cares if one of your places is in a lovely place to visit?

For the money we have, yes, you can't do that, but he can easily have a couple of places and if his dream is to have this as one he goes to in the winter, he can swing it.

You want to put in place strategies to protect and grow your wealth while realizing what decisions don't really matter anymore and you shouldn't accept a lower quality of life if "money is no object".

 

That would be a better choice, but I didn't want to sound greedy...

 

Yeah last time powerball was in billions, I went through this thought exercise -- and decided I would want to just rent. everything. forever. And that would be a kind of freedom unto itself.

Currently I strongly prefer to own things, and it's probably my middle-class thinking sprinkled with depression-era hoarder grandparents and their suspicion of loans, desire for control over their own destiny, and self-sufficiency being vital "or else"

 

Oh, come on. Even if we assumed he spent his entire winnings on real estate and that it costs 10% of the purchase price per year to maintain (taxes, repairs, utilities, etc) his properties will be increasing in value by about 5% per year. So, net he's spending 5% of his fortune per year on upkeep. Even in the crazy scenario where he spent his entire billion and never generated any income from anything, it would still take 20 years to burn through his entire nest egg. Not exactly "fast" and not at all what he's likely to do.

 

And he's furnishing this stately manse with ikea, some nagel prints on the walls, and a corolla in the driveway?

That's just the base of operations for the impending spend-o-dome. Once ensconced, he won't be drinking out of the tupperware cups. Every facet of life is going to inflate the same way, and they're starting pretty darn high on the food chain, real-estate wise. I can only assume the crystal, wine and champagne, pampered pets, and household staff are being assessed right now. At similar "grade" to match the house.

Hey, they won it, I hope they enjoy it. Props if they can ride the financial rodeo bull for more than the average 2-3 years most windfallers go broke in.

 

Maybe. Just saying that he'll have a hard time going broke on hard assets like real estate.

So he spent $25M on a house. The amount of money he has is almost unimaginable. That $25M house cost him as much as someone with a 500,000 net worth buying a used travel trailer for $12k. The travel trailer isn't going to bankrupt someone with 500k in net worth even if it zeros out, and this house isn't going to hurt this guy either and there is zero chance of it zeroing out.

This dude really needs to find the next Enron and make a single large bet on it to get rid of a billion. Even if he bought a superyacht for $500M and spent 10% a year sailing it around, he'd still run through half his money in five years and have a $400M-ish superyacht in his asset list.

 

Considering where this guy chose to live, the pressure to "keep up with the Joneses" will be pretty strong. He should keep buying lottery tickets just in case...

 

He won't fit in with the Joneses anyway. Someone who simply won their wealth will be looked down upon and scorned by the thieves, swindlers, drug dealers, human traffickers, crime bosses, lawyers, and bankers in the neighborhood.

 

That doesn't mean he won't try, and that's where the danger lies.
The neighborhood sounds better than I thought. I assumed it was all celebs.

 

Try twice that, $997.5 million.

Spending 2.5% of his winnings on a house is by far not the dumbest thing he could do. Letting everyone know where he lives, however, is.

 

unless, of course, it's misinformation...

 

Not in this case. Conservative investments on a billion dollars will generate $30,000,000 a year.

 

He doesn't get a billion. Even if he takes the annuity option, he pays taxes, so over the 30 years he gets about 630 million (if no state income tax).

But your point is valid, even if he took the cash option, that house was less than 10% of what he netted. So it is like someone making $100.000 buying a toy for $8,000. And how many people on this forum spent more than 10% of their annual income on flying?

 

Uuh, no. The cash option is about 52% of the jackpot size, so he starts at 520 million, THEN pays taxes. Federal taxes would be 37% of that 520 million

Double that for 2 billion, but still a lot less than 997.5 million

 

Doesn’t at all change my point. He had the blessing of a common name and yet his new house wound up on the front of TMZ. That’s a much bigger concern than him spending pocket change on a house.

 

Why is that dumb?

You afraid he's gonna be exploit by people like this guy?

 

I'll take the lump sum any day of the week, and pay the taxes. The rest is mine, free and clear, and it will be enough. The fact that the MAN has stolen most of it from me is an academic point.

I just want to live a happy life, not invade and take over a former Soviet state.

 

Max Fed tax rate is only 37%, so not taking the "most"

 

I was worried about California claiming nexus on a new house purchase and sending the dementors to get another 12.3%, but it seems we don't tax lottery winnings here. So that's nice.