Original article published by The Hollywood Reporter
While Ellen DeGeneres is the undisputed grand dame of celebrity real estate portfolios, buying and flipping pedigree properties at an astounding rate, a new generation of celebrity house-hoppers are following her lead.
“Right now there’s such a cool factor with being an entrepreneur, being good at business, being financially literate,” says Heather T. Roy of Heather & Learka at Douglas Elliman. “Being involved in real estate is perceived as all these things.”
The favorable markets in Southern California mean sellers can often make a tidy profit remarkably quickly.
“From an investment standpoint, Los Angeles usually appreciates the quickest. If you buy correctly, you can gain equity or make a profit by holding a property for just a few years,” says Carl Gambino of Compass. “Whereas, depending on what you purchase in New York City, it could take five-plus years to gain incredible value. You have to hold longer.” (Though things could change if the L.A. market goes from its current sluggish state, brought on by high interest rates, into significant decline.)
“A large portion of entertainment clients we work with rapidly buy and sell homes as a result of their lives changing very often,” adds Gambino. “I see the absolute most turnover in Los Angeles. I just think because it’s a younger city than New York, it’s more entertainment based. There’s people making money in the entertainment business very quickly, and they upgrade.”
In 2021, Gambino clients Joe Jonas and Sophie Turner flipped a house in Encino to DJ Zedd for $15.2 million less than two years after buying it for $14.1 million; and in September, Naomi Osaka sold a Beverly Hills house for $8.7 million, according to Dirt.com; she paid $6.9 million three years earlier.
Other recent fast flippers include Sofia Richie and music exec Elliot Grainge (they bought a house in Beverly Hills for $17 million and sold it 10 months later for $21.8 million), Ashley Tisdale (she paid $4.2 million for a pad in the Hollywood Hills in 2021 and sold it less than two years later to singer Madison Beer for $5.9 million) and Ariana Grande (she sold a house in Montecito to K5 Global’s Michael Kives for $9.1 million after paying $6.8 million for it two years earlier).
Tomer Fridman — the longtime real estate agent to the Kardashian family, who are also known for buying and selling houses at a clip — says many entertainment clients think about a potential sale early on in the buying process. “The business manager is with us on our tour, and we do talk about not just use and utility in terms of the client loving it, but, ‘Are we going to be able to sell this in one, two, three, four, five years?’ And, ‘Are we going to have a return on investment once the designer’s done and costs whatever it is?'” he says. “And the truth is, most of the time, it’s yes, because the name of the owner is notable, and people want to buy their properties.”
As Emil Hartoonian of The Agency notes, building a real estate portfolio is a smart investment for celebrities. “Whether they’re actors, whether they’re music celebrities or whatnot, they have windows [in their careers],” he says. “The business manager’s job is really to create that wealth stream that protects the income that they’ve made and to make that work for them in future years when they’re not making as much. One of the biggest vehicles for that has been real estate.”
Roy also believes that folks in the entertainment industry find that real estate investment suits them. “Flipping is a production,” she says. “These are people used to productions. They’re used to there being an important financial component or an important time component. Lots of things going wrong, all that.”
The creativity component is also key. “I do think, honestly, it’s an artistic outlet,” says Fridman, “and then, it just so happens that they also make a fortune when they sell them.” In years gone by, adds Fridman, new buyers would hire a designer “and then you [the new homeowner] went on your way, and then you came home, and the house was done for you. When I was a kid, that’s how it was done. Now, these people love the process. They love to be involved. I mean, I have clients that fly out with their designer to the Paris Flea Market and they pick the light fixtures because they want vintage. They love the process. They love it.”
And, agents note that many stars have much easier access to coveted designers and architects such as Waldo Fernandez, Kelly Wearstler, Michael S. Smith, Vincent Van Duysen and Barbara Bestor, whose touch is almost guaranteed to increase a home’s resale value. “Once the designer puts in x amount of money, it exponentially increases the value of the homes,” says Fridman.
Increased real estate coverage also has made high-end flipping a more lucrative operation. “[Look at] Dirt.com, those guys are like TMZ,” Stuart Vetterick of Hilton & Hyland says of the celebrity real estate news site. (Dirt is owned by THR parent company PMC.) “They are able to sniff out and find out celebrity purchases and sales more than ever before.”
This has made buying and selling homes for profit increasingly fashionable among younger members of the entertainment industry attempting to brand themselves. “Social media and the pervasiveness of media in general has been the lighter fluid on that. Because when we started, Diane Keaton had an amazing reputation. She would redo these houses, Spanish in particular, and they were gorgeous,” says Learka Bosnak, Roy’s partner at Douglas Elliman. “The top agents knew about [star flippers like Keaton]. And then the savvy buyers knew about it. But now if you have the equivalent of someone like that, it’s all over the world.”
Fridman also notes that shelter publications like Architectural Digest have increased their coverage of stars’ homes. “The minute I see a celebrity on the cover of Architectural Digest [speaking] of what an extraordinary job they did with their home, it’s getting listed within the month,” he says. “It’s so funny. It’s literally the precursor to it getting listed.”
Tisdale’s house was featured by Architectural Digest six months before it sold, and Miley Cyrus and Vanessa Hudgens flipped houses after getting a spotlight in the publication as well. Cyrus sold a home in Hidden Hills that she had bought for $4.9 million in 2020 for $7.2 million in April 2021, and Hudgens flipped a house in Los Feliz that she had purchased for $4.9 million in December 2018 for $6.7 million in March 2022 after working with designer Jake Arnold on a redo.
Agents agree that publicity can up the price point and cachet of a property. “No matter if you’re a billionaire, celebrity, singer, or businessperson, you always want to have that ‘I purchased XYZ’s house.’ It offers some kind of pedigree to it. It truly does,” says Fridman, who in 2020 sold a home in Calabasas, California, for client Khloé Kardashian for $15.5 million. The price, then a record for the city, was more than double the $7.2 million that she had paid for it six years earlier.
Bosnak agrees. “What you are doing when you make a real estate decision is piling up all the pros and cons,” she says. “And it’s a big rock on the pro side because it’s really hard to argue with, ‘A celebrity bought this, then I bought it and also kept it gorgeous.’ Now, why wouldn’t you want to buy it?”
Perhaps surprisingly, the agents THR spoke with said most of their clients actually do live for a time in the homes they flip. But for most of them, moving is much less stressful than it is for the average Angeleno. “They’re not the ones moving!” Hartoonian says. “If somebody were to pack all my stuff and organize it to a T and put it into a new place and organize it to the perfect way that I know where everything is, and I love the way it looks, then all I do is sleep in a new room.”
In fact, for top-tier flippers, the profits and the production are down to a science. “It is like a military operation,” Fridman says. “You have assistants, business manager, staff. When you see it, it’s like a beautifully orchestrated, chaotic ballet.”
