Most expensive home in America defaults on $165 million in debt, up for sale

September 14, 2021: -According to the court filing, a Los Angeles megamansion once expected to list for $500 million is now into receivership after the owner defaulted on begin $165 million in loans and debt.

The 105,000-square-foot Bel Air estate, famous as “The One,” was placed into receivership by the Los Angeles County Superior Court and is expected to be relisted at a lower price in the future months, according to people familiar with the property.

The receivership marks a reversal for “The One” and its flashy developer, Nile Niami, who touted the property as his “life mission” and “the biggest, most expensive home in the urban world.”

Even as prices were falling, Niami had to load up on debt to finish and promote “The One.” Over the last four years, Niami and his related LLC, Crestlloyd, have borrowed over $165 million to build and sell “The One,” according to property documents.

The biggest lender is Hankey Capital, founded by Los Angeles billionaire Don Hankey, with over $115 million in loans on the property. Yogi Securities Holdings, led by doctor-turned-real-estate-investor Joseph Englanoff, has loaned “The One” for $36 million. Two different entities, Inferno Realty and Maybach Corporation Holdings, have provided loans of $7 million each.

“The One” also has more than $1 million in unpaid taxes and debts from concrete, air conditioning, and tool companies.

Hankey served Niami with a notice of default in March. In July, the Los Angeles County Superior Court ordered that the property is placed into receivership and named Ted Lanes of Lanes Management as the receiver. Under a receivership, a default property is turned over to a court-appointed receiver, preparing the property for sale. In complex or large real estate projects, receiverships are preferable to a foreclosure, where the lender or bank seizes the property.

Instead of taking over ownership and liabilities, which can add to the risks and delays, the receiver gets the needs permits, completes any required construction work, compiles a list of creditors, and prepares the house for a sale to pay off the lenders. A receivership provides a notice period when lenders, creditors, and contractors who haven’t been paid can make their case.

“What I love to see happen is that the house is completed, the certificate of occupancy is awarded, and we have an orderly sale that maximizes the value,” he added. “Hopefully, there it will be sufficient proceeds from the sale to fund the creditors and for the equity to realize some value.”