The Real Reason Why This $1 Billion Hollywood Hills Property was Sold for a Fraction of its Price

The hefty purchase price of listed Beverly Hills properties is no surprise at all. Los Angeles is home to some of the world’s top celebrities and entrepreneurs, with deep pockets. However, one specific listing managed to send shockwaves throughout the world of real estate!

Listed for a massive $1 billion, this deal was about to be the most expensive real estate sale of all time. The prospective buyer would be ready for the annual $10 million tax bill on this purchase, meaning that they needed to earn a minimum $20 million before taxes per year. Shocked beyond words?

A Tenth of a Million

But surprisingly, this one-billion-dollar property eventually sold for much less than the listed asking price. Are you ready for the shock? It sold for only $100,000. How could it have gone from the B-club to just a tenth of a million? The piece of property is actually The Vineyard, now better known as The Mountain of Beverly Hills and is quite an intriguing story. The 157-acre plot is located away from Rodeo drive, and generated considerable interest over the years. Famous names such as Brad Pitt and Tom Cruise had wanted to acquire it but failed to do so. The intriguing tale of this plot goes back in time to 1977 when Iranian Princess Shams Pahlavi acquired it from Jack Bean.

Two years later, the last Iranian Shah and Pahlavi’s younger brother was ousted by a coup, and rowdy Iranian students in LA, vandalized her various properties. Having no interest in owning property in Southern California, the Princess sold the 157 acre plot to Merv Griffin who intended to build LA’s largest house at the time, on his newly acquired land. But having recently acquired a hotel, his finances were stretched thin. With hardly any options left, he had to sell off one of his new acquisitions. Merv chose to retain the hotel, ultimately selling off The Vineyard (which he had named) to Mark Hughes, founder of Herbalife for $8.5 million, a record sale then in 1997.

Sole Heir

Intending to build his dream home at The Vineyard, Mark unfortunately died in 2000 before he could do so. The renowned businessman had two other properties in Malibu and a Beverly Hills residence, which were all left to his eight year old son Alex, who was Mark’s sole heir. As per his will, Alex will have access to his estate in 2027. So who was to manage till then? The kid’s trustees mismanaged The Vineyard and agreed to sell it on loan to Charles Dickens, a man bereft of any experience in real estate management. Dickens initially borrowed $2 million from the trust, but over the years, ended up owing them $200 million. He then transferred ownership to Victor Noval, who listed the property for $1 billion. This was a smart move and if the sale had gone through, could have offset the $200 million debt, while giving him a huge profit. However, Alex’s trustees forced a foreclosure move, resulting in an auction of the property. $100,000 was the winning bid, and the bidder was Alex Hughes himself. At 27, he managed to regain his property that he would have inherited after turning 35.