Knockout or TKO – What Kind of Win for This Buyer?

Industry Observer

The Phoenix area is home to enough celebrities and captains of industry that there's little notice when a high-end home sells. But you can be sure the transaction will get some media attention when there's a famous - or infamous - name attached. In this case, Mike Tyson.

Tyson's home has been on the market with a listing price of $2.7 million. The property is in Paradise Valley, a suburb of Phoenix. One of my clients had made an offer on the house that was not accepted, so when I read about the recent sale at $2.34 million, I wondered if the buyer really got a good deal. 




From the photos you might think it's a great price, especially when Paradise Valley has many beautiful homes with higher prices. The home's location at the end of a cul-de-sac and its magnificent views certainly make it desirable, but there's more to the overall picture. The interior, for instance.

Built in 1988, the home represents the architectural design of that era. This house is so 1980's, in fact, that you wouldn't be surprised to see Don Johnson step out of the front door! What was "in" 20 years ago is very "out" now, and there have been zero upgrades since it was built. Even a four-car garage, five bedrooms, game room, pool, and fully equipped guest house cannot make up for loads of needed work and an obsolete floorplan.


 The main concern among investors who looked at the property was that it was too good to tear down, but difficult to bring up to today's standards because of the cost to change the difficult floor plan. Some people thought that the lot itself would be worth $1.5 to $1.8 million. But the demolition cost and tedious permitting process would make tearing the house down and rebuilding it especially challenging. If the house were torn down and then completely rebuilt it would be have to have a high listing price, and the competition in Paradise Valley is stiff with many desirable homes available in the $3 to $4 million range.

The buyer is a limited liability partnership called Oppenheimer Partners Properties. Did they get a knockout deal or a TKO? Like beauty, that's in the eye of the beholder. It will be interesting to see what happens next with this property. 



Comments (2)

Debi Braulik - Maple Valley, WA
Selling Maple Valley to Fife WA Homes For Sale
I bet you will be keeping your eye on it. Interesting case study. I hope you follow up with this (as much as you can since your buyer's offer wasn't accepted). :)
Apr 17, 2007 11:38 AM
Maureen Thelen
Urban Premises, LLC - Phoenix, AZ

It's close to impossible to find a building lot, with or without a tear-down house on it, for less than $1,200,000 anywhere in Paradise Valley.  And the better the location and views, the higher the premium.  One of my clients (a builder/remodeler) is now in escrow on a unique, albeit dated, home valued "as is" at $1,200,000.  He plans to dramatically remodel and expand this property.  Other offers were made on this property in the $1,100,000 range by builders who would have torn down the existing home and built a new luxury home on this site.  The top price for a completed luxury home in Paradise Valley seems to have no ceiling.  The previous record of $11,400,000 paid in Paradise Valley is now old news.  I represented the buyers who purchased a fabulous 7,000 square foot home near Mummy Mountain in early 2006 for just under $4,000,000.  They are now completing custom touches (adding an elevator and wine room, moving a fireplace, upgrading the kitchen, expanding the master bath,and various other changes) to personalize the home for their use.  They had plenty of room to make upgrades because other homes in their immediate neighorhood are double (or more!) in size and price.  The values in the Town of Paradise Valley are expected to continue growing over time.  PV is located in the heart of the Phoenix metro area, with convenient access to great dining and shopping in Scottsdale and the Arizona Biltmore area, Sky Harbor International Airport, cultural and professional sports venues in Phoenix, and good road access to the entire area. 

May 01, 2007 04:00 AM