Zillow estimated that nearly a third of homes sold for $5 million or more in 2012 were purchased through LLCs, and the number is growing, according to real estate brokers.
Yet the rise of LLCs has also led to a new round of unsolved mysteries when it comes to sales of some of America's most expensive homes. Call it Mansion Denial.
The biggest case of Mansion Denial so far is Michael Milken. This spring, news broke that Fleur De Lys, a mega-estate in Los Angeles' Westside, was sold to an all-cash buyer for $102 million. The buyer was an LLC with no real identifiers. Yet the tax bills were being mailed to an attorney's office at the Milken Institute, Milken's Santa Monica, California-based think tank.
And later reporting showed the sale price to be more in the neighborhood of $88 million, though the real price may have been higher when adding in furniture and other items in the house.
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A representative of the Milken Institute told the Los Angeles Times that neither Milken nor the institute was the buyer. Yet, Variety's Real Estalker column later reported that Milken threw a "massive housewarming party" in the home's downstairs ballroom shortly after the purchase.
Why would Milken not want to be seen buying an $88 million estate? Well, even though he's worked hard to resurrect himself through his think tank, philanthropy and highly popular, prestigious conferences, Milken did serve two years in prison after pleading guilty to six securities violations in 1990 after an insider-trading investigation. He was also banned from the securities industry for life.
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Even though he paid his fine and did his time, Milken might not want to be seen as flaunting his fortune by buying an $88 million mansion.