By Matthew Hendley
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Marin promised to repay $950,000 to the entity and listed his new home as collateral in second position after the primary lenders got their $2.3 million. Biltmore Estates Inc. had nothing to do with Marin's private lenders — it was a completely separate deal.
The $950,000 "loan" — if that's what it was — raised the official sales price of Marin's home (with the $250,000 down payment) in the county Assessor's Office and in other real estate documents to $3.5 million, which was far more than what he actually paid for it.
But just a month later, in October 2008, Jana Bru — listed as vice president of Biltmore Estates Inc. — signed a notarized document that forgave the $950,000 debt.
Bru, Marin's girlfriend, says she is a longtime friend of Greg Bensen's. The latter is the wheeler-dealer who had lost the Biltmore house to foreclosure. Also, the president of Biltmore Estates Inc. turned out to be Bensen, who is now in parts unknown.
So why would Mike Marin have signed nearly a $1 million promissory note to Bensen's firm at the same time he inked a potentially risky $2.55 million deal on a home that Bensen just had lost to foreclosure?
One answer is that the paper deal between Marin and Bensen (no money apparently changed hands) made it seem as if the Biltmore home had sold for $3.5 million ($2.3 million owed to Gould's group, the $250,000 down payment, and the artificial, but legally documented, $950,000 "loan").
The financial machinations came into play early this year, when Michael Marin joined forces with a East Valley children's crisis center in an effort to sell his new home, a place that already was threatening to become a financial albatross around his neck.
Recent news stories around the nation have told how more than a few people in these troubled economic times try to sell their homes to non-profits (usually charities).
In turn, the non-profits seek to raffle off the house after selling enough tickets to make the deal work. But if the non-profit cannot sell enough tickets to buy the home and make money, the raffle is canceled and the ticket money refunded.
Gambling regulations in most states, including Arizona, don't allow private raffles unless the homeowners become partners with a non-profit. Such homeowners are not supposed to make more money in the deal than the appraised value of their home (which, for better or worse, may not be the actual market value).
The arrangement has worked famously in some instances, with both homeowner and non-profit making some money, and the raffle winner getting a house relatively free (the new owners do have to pay property taxes and other expenses).
Michael Marin says a story on Inside Edition about a home raffle caught his interest early this year.
"I knew about the great work of the Child Crisis Center in Mesa," he says, "and that they had lost a bunch of their funding from the state [of Arizona] in the budget crunch.
"I thought, 'Here's my chance. I'm gonna sell this house anyway and pay a real estate agent $200,000 or $300,000. Why not sell it a little bit at a time with the raffle?' I wasn't going to make any money on the deal, just get out of it what I put into it and move along. If it went well, the center could have gotten maybe $500,000, so it sounded like a great thing, no downside."
Marin says he approached the Crisis Center with the proposition.
"They vetted it for three months, and then gave me the go-ahead to move forward," Marin says. "Everything just felt right."
He says he wrote up the rules for the raffle, started a Web site, and went from there.
If everything fell into place, there would be a drawing on the Fourth of July at 71 Biltmore Estates Drive for the $3.5 million (the artificially pumped-up price) "dream house":
"Michael J. Marin, the artist and author who made his home available to the Child Crisis Center for purposes of making the Arizona Dream House Raffle possible, is climbing Everest this spring.
"Raffle tickets are only $25. Imagine! A completely furnished $3.5 million Arizona Biltmore Estates dream house for only $25! It even comes with a Rolls-Royce! There are hundreds of other prizes available, too."
But the deal was complicated.
Marin's rules dictated that he would sell his home to the Crisis Center only after 176,000 tickets were sold at $25 per ticket. That added up to $4 million worth of tickets, a tall order.
That would have left about $2.7 million for Marin to divvy up with the raffle winners after he paid off his short-sale lenders the $2.3 million he owed them:
"The Owner further reserves the right to sell the Arizona Dream House, if in consultation with the [Crisis Center], it does appear likely that ticket sales will reach 176,000 prior to the expiration of the Entry Period."
In other words, Marin was hedging his bets from the start and wanted — make that needed — another plan in case the raffle failed.
Marin says he planned to pitch himself to the news media as a rich businessman-cum-artist-cum-mountain-climber with a heart for "kids."
He had been training hard for a two-month climbing expedition he planned to take with a mostly Russian team in Nepal, the goal being to reach the summit of Mount Everest sometime in early May.