(MoneyWatch) COMMENTARY If you're on the market for a new home and have a few million dollars to spare, make some time on April 26th. That's when this extravagant California mansion at One Pelican Hill Road North, known as "Villa del Lago," is set to hit the auction block. It was once valued at $87 million, but could be yours for a quarter of that price.
The estate has it all. It sits on a 12.5 acre lot on Southern California's exclusive Newport Coast and sprawls over 17,500 square feet. The mega-mansion has 17 bathrooms, a 17-car garage, marble floors, gold leaf ceilings, and a vineyard. And it's perfect for an active multimillionaire, featuring horse stables, tennis courts, and a lake on the property.
Despite its over-the-top specs, this home wasn't commissioned by Hollywood royalty. Villa del Lago was the brainchild of John McMonigle, a top luxury real estate broker who once claimed $2 billion in property sales over a five-year period at the height of the real estate boom.
In 2003, McMonigle and his partners purchased the future site of Villa del Lago for $3.42 million. The next year, the partnership secured a loan from LaJolla Bank (now OneWest Bank) and construction began on the enormous Tuscan-style villa. McMonigle, a millionaire in his own right, was living the dream. He had his own mansion, had appeared on The Oprah Winfrey Show, and owned a private yacht.
Then the real estate market crashed. LaJolla Bank went under and OneWest took over, cutting off funding for the $22 million construction loan that made building Villa del Lago possible. The home was roughly 90 percent complete when work stopped, and by January 2011 the property was in default.
McMonigle filed for personal bankruptcy in April 2011 and quit the partnership. In June 2011, the partnership filed for Chapter 11 bankruptcy, automatically stopping the home from being sold at a foreclosure sale.
Then things got worse. One week before McMonigle filed for bankruptcy, his wife of 16 years filed for divorce. According to Reuters, court documents say the former real estate mogul owes nearly $50 million to more than 200 creditors. Considering he has only $2.6 million in assets, coming up with the cash to pay them back may prove to be tough.
Whoever puts the winning bid on this massive mansion will get it at a steep discount. There's been a lot of interest -- over 700 people attended a recent open house, listing agent Rob Giem told Reuters. OneWest is hoping it can recover its loan, plus interest and fees, in selling the house.
The empty, never-sold, soon-to-be-auctioned villa tells the story of the extravagance and greed so prevalent during the housing market boom. People made and lost millions overnight, and now we're picking up the pieces. This remnant of the "good ol' days" is a stark reminder of how fleeting wealth can be, and why it pays to be smart with your money.Auction.com is putting on the auction, and interested parties can register on the website. Buyers must be prepared to wire $100,000 and send proof of funds to complete registration.