Madoff's Toys, Houses Are Gains from Another Era

(MoneyWatch)  Bernie Madoff's beach house in Montauk, NY, is nice enough. Four bedrooms, three baths, and 1.2 acre's worth of a lot that slopes down toward the beach. Price: $8.75 million. (That's the opening bid, though supposedly the federal government won't take a penny less than $7 million.)

Looking online at Madoff's toys, furnishings and art that are also being sold is a little like picking through the wreckage of another era. Maybe it's the 1920s, just before the Great Depression unfolded, where the Great Gatsby rode around in fancy cars, eating in fancy restaurants, living in fancy houses tended by untold numbers of servants in uniform.

Ruth and Bernie lived life to the fullest, and their toys reflect the carefully constructed (if totally fabricated) life he felt a fabulously wealthy investor should lead. From yachts and castles to beach houses, Manhattan penthouses and meticulously furnished offices, Madoff spared nothing when it came projecting the image of success, fostering the envy of his many investors and competitors.

The round wood dining room table in Madoff's beach house looks like it's hand-carved. Imagine sitting there with a few of your billionaire firends, discussing the twists and turns of Wall Street. The furnishings of the Madoff beach house, which also include rugs, furniture, artwork and personal items belonging to Ruth and Bernie (including some pairs of Ruth's shoes) will be sold separately at auction, a deputy U.S. Marshal told the New York Times.

There's some question as to how much cash Madoff's toys, houses, boats and artwork will generate. Bernie and Ruth's Palm Beach house, which they purchased for $3.75 million in 1973, is worth maybe three times that, according to local Realtors and a Zillow estimate. (The government decided to show the house with the furniture and boats, and sell whatever isn't purchase in the deal separately.)

But the U.S. Marshal's office and local tax assessors estimate that the Montauk beach house will only fetch around $3 million, even though Zillow thinks it might be worth as much as $4 million. Seems like a shame. Someone should consider renting it out for a few years until the next round of billionaires are looking for a beachfront respite from the daily grind.

Photo courtesy of Zillow