Michael Jackson's Housing Debt Weighs on Estate, Heirs
Michael Jackson lives on through a mountain of real estate debt still on the books at the one-year anniversary of his passing. Due to this and other deficits, his personal estate's money woes remain steep and still affect the family members he left behind.
With little liquidity floating around, eyes are on Jackson's real estate holdings.
So far, the Jackson family home, a 5-bedroom 7-bathroom, 10,476-square-foot home at 4641 Hayvenhurst Ave; in Encino, Calif., where his mother, Katherine, lives, has managed to avoid foreclosure. But just in the nick of time.
The save comes thanks to the roughly $200 million that the singer has brought in posthumously in the 12 months following his death. But while renewed popularity in Jackson's music has helped pay off debt, by no means are his plethora of properties in the clear -- a harsh reality that could affect Jackson's three children and his 80-year-old mother.
Come December 2010, the pop star's estate is expected to fork over $300 million of the $500 million debt that the Smooth Criminal and Thriller singer owes due to over-the-top spending throughout his life and, most excessively, in his final years.
By the end of 2010, Barclays PLC expects the matured $300-million loan that they gave Jackson to be paid in full.
In addition to the Encino home, Jackson's other costly and famed real estate is his Neverland Ranch at 5225 Figueroa Mountain Road in Los Olivos, Calif., a property that sits on 2,676 acres near Santa Barbara. Neverland was bailed out of foreclosure by Colony Capital LLC, an L.A. real estate investment firm that bought the note and placed the estate in a joint venture with Jackson back in 2008. (Colony takes care of the ranch's overhead, maintenance and tax costs.) It's currently not for sale and experts say it most likely will not be converted into a tourist attraction like Graceland, Elvis Presley's opulent pad.
There's also the family's home from Michael's childhood in Gary, Ind., at 2300 Jackson St.
A condo owned by Jackson near the Encino enclave was four months late on loan payments and homeowner dues, so was also allegedly in danger of foreclosing until it was recently paid off. At the time of his death, Jackson was living in a rented mansion in Holmby Hills, a high-end L.A. neighborhood near Bel Air.
Despite his various financial holdings, at the time of his death Jackson was plagued with unpaid bills. The Encino home, which was slated to foreclose on the day after Jackson died, had outstanding debts that included thousands of dollars in utility bills. Several months had passed without anyone, be it Jackson, his mother, or any other Jackson family members making a payment. Besides Katherine and the singer's three children, the offspring of two of Michael's brothers also live in the family home.
For a family that has amassed such massive wealth, the Jacksons were in danger of being without running water because of only $9,000 owed to the Los Angeles Department of Water and Power. Their phone/cable/internet service was nearly disconnected because $1,300 was left unpaid.
Another lesson, perhaps, on the dangers of overextending yourself in property ownership.
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