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LA mansion has 21 baths, three kitchens and a US$58m mortgage
IN THE foothills of Bel Air rises Billionaire, the aptly-named Los Angeles mega-mansion that for one hot moment was the most expensive home for sale in the US.
Even in this age of ultra-wealth, and in a city with no shortage of expensive homes, this one is over the top: 38,000 square feet of living space, 12 bedrooms, 21 bathrooms, three kitchens, a 40-seat movie theatre, infinity pool with a swim-up bar and a four-lane bowling alley.
It also has an impressive mortgage to match. The new owner - whose identity is hidden behind an LLC - paid US$94 million for the house in October, a generous discount from the US$250 million original asking price.
They took out a US$58.2 million, 10-year loan from HSBC Bank USA, according to property records, which would make the monthly payment about US$560,000 at prevailing rates. The mansion is listed as a second home in a document.
It turns out that the super-rich sometimes buy houses like normal people, though everything is on a much larger scale.
When they do borrow, banks are eager to provide credit. But even among jumbo loans this one stands out, exceeding the US$53 million mortgage that Goldman Sachs Group gave celebrities Beyonce and Jay Z in 2017 on their US$88 million Bel Air home.
"With interest rates at historic lows, and if you are Jay Z and Beyonce, you could probably borrow money as low as 2.5 per cent," said Shawn Elliott of NestSeekers International, one of the agents who helped sell Billionaire.
"It probably makes more sense to borrow the money and invest the money they have," he added.
As the rich get richer and the number of firms looking to manage their money swells, the big banks stand apart with their deep balance sheets and ability to provide credit for purchases ranging from art to private jets to super-yachts.
WeWork co-founder Adam Neumann borrowed tens of millions of dollars from banks including JPMorgan Chase & Co and Morgan Stanley to buy properties across the country.
He is now looking to sell some of the units that he bought in New York after the office-sharing company pulled its initial public offering and he was forced to step down as chairman and chief executive officer.
Then there is Tesla's Elon Musk, who has taken out several mega-mortgages, including US$61 million from Morgan Stanley on five properties in California.
Despite being worth more than US$29 billion, according the Bloomberg Billionaires Index, Mr Musk testified in court last month that he is cash poor. There were more than 230 active "super jumbo" mortgages in the US at the end of 2018, according to Corelogic. Three-quarters BLOOMBERG