Biden's Real Estate Deals Raise Some Eyebrows

[Brainster]

I had always kind of wondered why Biden was so poor; turns out that the much-reported figure for his net worth excludes his real estate holdings.

His home sounds pretty nice:

First elected to the Senate 36 years ago, the former lawyer lives off Barley Mill Road in Greenville -- northern Delaware's priciest area -- on a four-acre lakefront estate in a 7,000-square-foot custom home. Biden also owns a smaller carriage house on his property, where his widowed mother lives.

The article analyzes Biden's purchases and sales of other houses. There is a very interesting pattern; Biden tends to buy from and sell to people who have donated to his campaigns:

In 1996, Biden sold a home in Greenville for the asking price of $1.2 million -- more than six times what he paid two decades earlier -- to John R. Cochran III, a top executive at the MBNA credit card bank that was a longtime political benefactor.

Now, it is not out of the realm of possibility that Biden's home had appreciated 500% in 20 years. Housing prices soared in the late 1970s so Biden may have gotten in just before the run-up in values. But the odd thing is that when he turned around and bought another property, the owner sold it to him at his cost:

Using profits from that sale, Biden paid $350,000 cash to real estate executive and developer Keith D. Stoltz for 4.2 vacant acres -- a long, narrow lot a few miles from Biden's old home. Stoltz had bought that same lot five years earlier for the same price.

Cochran had paid Biden's full asking price for his prior home, indicating a fairly strong real estate market, but when Stoltz was asked why he sold his land to Biden for the same price he had paid, he claimed it was because it was a soft market. On the other hand, Biden apparently had an appraisal done in 1992 that showed his house worth $1.2 million; the same amount he sold it for four years later. This does indicate that the market was fairly soft in the interval. But you know how it is; now the claim is that the property appreciated 500% in 16 years, not 20, which makes it a little more spectacular.

And perhaps the initial purchase of the home is where the suspicions should be directed:

An account of Biden's purchase of his home at 6 Montchan Drive was included in Richard Ben Cramer's 1988 book on presidential candidates, "What It Takes."

"It's the kind of place a thousand Italian guys died building -- hand-carved doorways, a curving hand-carved grand staircase that Clark Gable could have carried a girl down, a library fit for a Carnegie, or Bernard Baruch, someone like that," Cramer wrote. "Joe found it one night, a couple of years after he became a senator.

"He was driving around, like he did back then. He was snooping around Greenville, streets of his dreams, when he saw it, all overgrown, boarded up. Some developer was going to knock it down. ... He got in the developer's face and started talking -- fast," Cramer wrote.

A 10,000 SF home for $185,000 seems like a pretty good deal even for 1976. And while the article indicates that Biden fixed up the home quite a bit, you do have to wonder why such an estate would have been overgrown and boarded up. Note that we essentially have Biden's word for the condition of the property; it would be interesting to find out what the sellers paid for it and when.

There is discussion of donations to Biden's campaigns from Cochran and other MBNA employees, and Biden's support of bankruptcy reform, a legislative priority for MBNA and other banks. Stolz has also donated to Biden's campaigns, although Stolz claims that Biden has ever supported legislation to benefit him.

It's certainly curious, but hardly conclusive, that Biden's prior home was bought by financial supporters of his campaigns. And the question of the value is indeed significant; remember that what brought down Duke Cunningham was the fact that a defense contractor overpaid him for some property he owned, attracting the attention of the assessor's office.

 

[Wangler]

His home sounds pretty nice.

That picture of his estate from the linky...real nice....

Can any of these people truly connect with mainstream America?

 

[Cicero]

That picture of his estate from the linky...real nice....

Can any of these people truly connect with mainstream America?

Only the mainstream that runs through the Hamptons.

 

[Highly Selassie]

yawn... wake me up when something important comes along.

 

[Wangler]

yawn... wake me up when something important comes along.

If we come across any more unsubstantiated rumours about Sarah Palin, we'll drop you a line.

 

[boloboffin]

I recommend everyone read that article for details left out of the OP, such as the 1992 and 1996 appraisal of the first home for precisely what it was sold for, and the first Biden offer of $300,000 for the second land plot which Stolz rejected.

 

[leftysergeant]

The piece of land that Biden bought borders on the estate of the man he bought it from. Some people are glad to have some say in what sorts of neighbors they have, especially if they are selling them the land. But he did haggle over the price.

Excuse me, am i missing something here? Like an unusual sale at a loss?

 

[Brainster]

I recommend everyone read that article for details left out of the OP, such as the 1992 and 1996 appraisal of the first home for precisely what it was sold for, and the first Biden offer of $300,000 for the second land plot which Stolz rejected.

I did mention the 1992 appraisal. From the OP:

On the other hand, Biden apparently had an appraisal done in 1992 that showed his house worth $1.2 million; the same amount he sold it for four years later.

I even pointed out that this backed up the claim that the market was somewhat soft; if Biden's house failed to appreciate in four years, perhaps Stolz's claim of a soft market was valid. Still the article notes problems with the 1996 appraisal:

MBNA provided the magazine with a January 1996 appraisal that put the Montchan Drive property's value at $1.2 million. The appraisal, however, listed two nearby properties valued at slightly above $1 million that both sold for at least $200,000 below the asking price, the magazine wrote.

I still say the interesting part is the story about the original purchase. The article makes it clear that by 1988 he was living in a palatial estate:

"It's the kind of place a thousand Italian guys died building -- hand-carved doorways, a curving hand-carved grand staircase that Clark Gable could have carried a girl down, a library fit for a Carnegie, or Bernard Baruch, someone like that," Cramer wrote. "Joe found it one night, a couple of years after he became a senator.

A library fit for a Carnegie? And 10,000 SF is quite a home; IIRC it's the size of Al Gore's current residence, which I would point out comes after he's been on the board of Google for many years which has made him very wealthy.

And it does not at all fit the meme that Biden's a pauper compared to his Senate colleagues.

 

[leftysergeant]

And it was scheduled to be knocked down.

 

[boloboffin]

I did mention the 1992 appraisal. From the OP:



I even pointed out that this backed up the claim that the market was somewhat soft; if Biden's house failed to appreciate in four years, perhaps Stolz's claim of a soft market was valid.

Yes, you did.

Still the article notes problems with the 1996 appraisal:

MBNA provided the magazine with a January 1996 appraisal that put the Montchan Drive property's value at $1.2 million. The appraisal, however, listed two nearby properties valued at slightly above $1 million that both sold for at least $200,000 below the asking price, the magazine wrote.

And in a soft market where someone offers you your asking price, what do you do, Brainster? Knock off $200,000? Would we expect to see threads here from free-market advocates calling Biden an idiot if that had been the case?

I still say the interesting part is the story about the original purchase. The article makes it clear that by 1988 he was living in a palatial estate:

A library fit for a Carnegie?

Could you point out the graveyard of the 1,000 Italians who died building what would become Biden's home?

And 10,000 SF is quite a home; IIRC it's the size of Al Gore's current residence, which I would point out comes after he's been on the board of Google for many years which has made him very wealthy.

And it does not at all fit the meme that Biden's a pauper compared to his Senate colleagues.

And it was scheduled to be knocked down, as lefty pointed out.

I agree that his equity in the current home should be listed as part of his assets and net worth. But the situation of the first home was open knowledge in Biden's last election and he got reelected. Sounds like a fair lot of nothing to me.