Neverland Ranch Avoids Foreclosure: Peter Pan Still Truant But Optimistic

Michael Jackson, the original Lost Boy, has negotiated a way out of foreclosure just days before his Neverland Ranch was to be auctioned. Colony Capital purchased the $23.5 million loan from Fortress Investment Group and will begin negotiations with Jackson to save his beloved sanctuary/ruin/amusement park from hell.

For the ruined pop icon—who hasn’t darkened the doors of the decaying Indian village or fed exotic animals in his private zoo, now home to domestic algae, for almost three years—it is a sad testimony to his inability to accept the end of his inane and insanely decadent lifestyle. He may simply be hoping to preserve what little equity he has. Half of his 50 percent stake in the ATV music catalog is in place as collateral for a $200 million loan he negotiated three years ago to restructure his debt.

As for his benefactors at Colony Capital who purchased the loan, I cannot say whether they expect to ever be repaid by Jacko or if they expect to eventually take the dilapidated Nymphenberg off his hands as an investment property. The 2,800-acre estate has been valued as high as $120 million, but it is in desperate need of repair: the cost of which will no doubt figure into any deal to purchase it, lowering the sale by a sizable margin if Capital chooses to sell it as a single property.

If the property were subdivided, it could be sold piecemeal for a better profit overall (I call dibs on the Bumper Car tent). It is safe to assume that Neverland will never be restored to its former, nightmarish glory. It took an...extraordinary individual to dream up the theme and layout of the Ranch, and it would take an extra-extraordinary individual to buy it as a residence. If Neverland ever reopens its doors intact, it will as almost certainly be as a tourist attraction, but given its history and the fact that its former occupant is still breathing (in an oxygen tent, through one nostril), it won’t be a viable one until Jacko is fairy dust.

I think the surest investment with the abdicated King of Pop would be a life settlement. To quote the crocodile: Tick tock, tick tock. As a one-time human being, Jackson still inspires some sympathy in me, but the bottom line is he is finished, and he won’t turn a real profit again until he’s halfway to the first star on the right, straight on ‘til mo(u)rning. For now, I only wish him and the goodly pirates at Colony Capital the best of luck.

Real Estate Investors And First-Time Buyers Climb Aboard The Foreclosure Bus

As final legislation on foreclosure rescues near, real estate agents are pulling out the (bus) stops to sell pre-foreclosure and bank-owned homes. Brokers are offering bus and limousine rides to groups as a unique way for investor clients and first-time buyers to view several properties in one meeting.

Agents with The Gold Rush Group in Auburn, California, a suburb outside of Sacramento, have rented a stretch-SUV limousine to cruise clients around properties in style (and efficiency). Other companies are organizing bus tours, complete with slide shows and presentations to educate buyers about the purchase process. One brokerage, RE/MAX Central in Las Vegas has even offered agents on the tour for the purpose of drafting purchase and sale agreements on the spot. Often, guide packages with area details and comps are included in the tours—a great deal for first-time or out-of town-buyers.

These tours, while fun and convenient, feature advertisements and free-with-purchase deals. In the case of RE/MAX CENTRAL, the bus itself is an advertisement on wheels. The benefit to buyers is the ease with which they can view and tour properties, and many first-time buyers and investors are getting into properties they otherwise would have been priced out of or avoided because of these tours.

Cesar Dias, an agent operating out of Stockton, Calif., was covered on a segment of “60 Minutes” to talk about his tour. He said that foreclosure tours accomplish the two goals of finding buyers in down markets and selling properties—all in one fell swoop.

A simple Google search brought up several tours all over the country. This gets me thinking—and cringing—about the term ‘foreclosure tour bus.’ As the foreclosure market looks to be bottoming out, is this a last ditch (and expensive) attempt to sell a few extra homes? Inspectors are on hand at the homes, as are lenders, in an attempt to unload these properties from the banks. Depending on how you look at it, this could either be a sales trap or a great opportunity to buy a quick property. I’m not so sure I’ll be hopping on this ‘buswagon’.