The owner of one of Beverly Hills’ most storied estates wants to refinance the property to the tune of $40 million using crowdfunding.
Attorney-investor Leonard Ross has posted Beverly House, the onetime home of publishing mogul William Randolph Hearst and a famed shooting location of “The Godfather,” on crowdfunding website StartEngine, a platform that connects startups with capital providers online, in a bid to find investors, The Real Deal has learned.
Prospective investors would chip in a minimum of $125,000 apiece to an LLC which would, in turn, make a trust deed secured loan on the property, according to StartEngine. The loan would be made on a fixed return basis with an annual base interest rate return of 5 percent, the documents show. In the event that the home sells for a price in excess of $130 million, investors would receive an additional return, the documents claim.
Investors can contribute multiples of $125,o00 for better benefits, including an on-site visit to watch movie filming if they pony up for eight shares.
Ross is planning to relist the property, which was previously listed for $135 million in 2014, for a massive premium over its last asking price, according to StartEngine.
“The Beverly House may now, or soon, be listed for sale at either $175 million by itself, or $195 million with the adjacent property as part of the Beverly House Compound,” the documents say.
Ross prefers to sell a 50 percent stake in the property as opposed to 100 percent, he claims. If he sells 100 percent, all investor funds will be returned plus an amount equal to 6 percent annually, he said. A spokesperson for Ross was not immediately for comment on why he had turned to crowdfunding to finance the property.
But the marketing materials on StartEngine play up the notion of real estate as one of the world’s safest investment classes.
“An investment regarding The Beverly House should offer much more peace of mind, and enjoyment, than the turmoil, uncertainties and unpredictability in world markets and currency risks and allows much desired diversification of investments,” it says.
Beverly House dates back to the 1920s, when it was built by local banker Milton Getz. John F. Kennedy and Jacqueline Kennedy Onassis reportedly honeymooned there. The famed “Godfather” scene in which a bloodied horse head is found in a film producer’s bed was also filmed there.
The property comprises 19 bedrooms, a large swimming pool, a lighted tennis court, terraces to accommodate 400 or more guests for a seated dinner and grounds to accommodate more than 1,000 people, according to StartEngine.
The house is currently offered for lease for $600,000 per month.