By New Times
By Connor Radnovich
By Robrt L. Pela and Amy Silverman
By Ray Stern
By Keegan Hamilton
By Matthew Hendley
By Monica Alonzo
By Monica Alonzo
Michael Marin says he first viewed the Biltmore Estates home as "pure math," a business deal.
He claims it was a straight-up investment and that he originally planned to try to sell it quickly at a tidy profit after buying it for $2.55 million in September 2004.
"It wasn't necessarily my dream house," he says. "But my thinking on it evolved. The more time you spend there, the more you fall in love with it."
The home at 71 Biltmore Estates Drive is a story itself, tucked amid the small enclave of other multimillion-dollar residences near 24th Street and Missouri Avenue.
The exclusive gated community has been home to luminaries such as late radio broadcaster Paul Harvey, singer Glen Campbell, Los Angeles Angels of Anaheim owner Arte Moreno, and Phoenix Suns star Amar'e Stoudemire.
The unique home "had to have been built by a very egotistical male," says Jana Bru, Marin's longtime girlfriend. Actually, it was an architectural fantasy of Bob Lutz, a well-heeled business executive.
When it was finished in the late 1980s, the home was the ultimate bachelor pad. It had a distinct hipster feel: expansive movie room, sauna and Jacuzzi, manicured putting green, and a master bedroom overlooking the Biltmore (Adobe) Golf Course and with a walk-in closet big enough to sleep in comfortably.
But not long after the "stud-muffin palace" (as someone dubbed it) was finished, bachelor Lutz became husband Lutz, marrying Trixie.
The Lutzes, who lived there for nearly two decades, became renowned for throwing the best parties around.
"That place meant a lot to us," says Trixie Lutz, who went there with her husband shortly after the fire to survey the damage. "It was a great party home and spectacular for the right person or couple."
A few years ago, though, the Lutzes realized they "weren't using our home to its fullest advantage because we and our friends were getting older, and other priorities — grandchildren and such — were taking over."
The couple decided to put it on the market in late 2006, just as housing prices were about to spiral downward.
Their asking price was $4 million, and county records show that East Valley real estate broker Greg Bensen bought it from the Lutzes in May 2007 for $2.8 million.
Bensen also inked an interest-only, balloon-mortgage deal with the same private lenders with whom Marin did business at the same location in September 2008.
Greg Bensen's name is important in this narrative: He and Marin were partners in the early 2000s in a real estate/financial firm called Once Again, and county records also show several personal financial transactions between the two in recent years.
In 2007 and into early 2008, Bensen apparently was living at his cool, new Biltmore pad. But in April 2008, the private lenders filed foreclosure proceedings against him because he had not been current with his substantial monthly interest payments.
An auction that August put the home back in the lenders' hands for a price of $2.5 million, and their point-man, Scott Gould, looked for a buyer by taping informational fliers to front doors around the neighborhood.
Gould wrote that two appraisals for the foreclosed home had come in at $3.5 million. But he was "willing to sell this home at a bargain price of $2.55 million. I can do short-term financing for the first buyer that can come in with $200,000 down."
His rationale was sound: August 2008 was a dismal time in the Valley housing market, even for luxury sellers.
The Web site PhoenixMarketTrends.com wrote at the time, "There is simply a tremendous amount of inventory out there, giving the few [luxury] buyers an amazing amount of leverage and choice . . . Prices for many homes are dropping tremendously. Prices in areas such as Paradise Valley are becoming affordable. It's a buyer's market."
That lends credence to what longtime Valley agent Russell Shaw tells New Times about the importance (or lack thereof) of appraisals involving high-end homes.
"You can't really use appraisals in areas such as the Biltmore Estates as the gospel," Shaw says, speaking generally, "because there just aren't many sales there to draw a legitimate comparison from. It all depends on how badly a buyer wants something and how badly a seller wants to sell."
Scott Gould says he quickly identified two potential buyers willing to buy the house for $2.55 million. One was Michael Marin, who says his foreclosed pal Greg Bensen told him about the deal.
"It came together quickly," Marin says. "The market had fallen as low as it was going to go, I thought, and this was a screaming deal. My idea was to capture some equity, sell it quickly, and move along. It was all good."
On September 4, 2008, Maricopa County recorded two documents concerning the property at 71 Biltmore Estates.
The first was Michael Marin's $2.3 million balloon-payment deal (plus about $200,000 in interest over a year's time) with the private lenders.