New York investor makes $1 million profit flipping Donald Trump's childhood home

The childhood home of Donald Trump in the Queens borough of New York, Jan 17, 2017.
The childhood home of Donald Trump in the Queens borough of New York, Jan 17, 2017.PHOTO: REUTERS

NEW YORK (WASHINGTON POST)- It's a deal that would make the president proud: A New York investor made a US$750,000 (S$1 million) profit on Donald Trump's childhood home, flipping it for a 54 per cent premium in a matter of weeks.

Real estate investor Michael Davis bought the five-bedroom, Tudor-style home in Queens for US$1.39 million, sight unseen, right before the election. The transaction closed in mid-December. And although Davis lives in Manhattan, he never made it over to Jamaica Estates to see his prize. He also resisted any temptation to gut, say, the kitchen and improve the property. Still, weeks later, he decided it was ready to flip.

And he was right. He put it up for auction and a buyer came through with a US$2.14 million cash offer.

"We bought this with the expectation that Donald Trump would win the election - that was the gamble," Davis said. "After he won, we didn't hold it very long."

The house now belongs to Trump Birth House LLC. The buyer, whose identity has not been made public, was represented by Michael X. Tang, an attorney who specialises in helping Chinese investors buy real estate.

It was not immediately clear how the new owners planned to use the home, but they have talked about possibly turning it into a library or a museum, according to Misha Haghani, owner of Paramount Realty USA, the New York auction house that facilitated the sale.

He would not comment on whether it was purchased by an overseas buyer.

"The value of this property has nothing to do with the physical house," Haghani said. "Normally, people buy real estate because of its location. In this case, frankly, location has very little to do with the value of the property. Size of the house, size of the lot, number of bedrooms and baths - these things are all irrelevant. Somebody bought this because of what it's associated with, and that's the current president."

President Trump's father, Fred C. Trump, built the home in 1940. According to the auction brochure, the home has "an old world charm interior featuring arched doorways, hardwood floors and more."

Its address, 85-15 Wareham Place, is listed on Trump's birth certificate.

The 2,000 sq ft house originally hit the market last summer for US$1.65 million. Eventually, its owners decided to put the house up for auction, with a starting bid of US$839,000.

The auction was scheduled for Oct 19, the night of the third presidential debate between then-candidates Trump and Hillary Clinton.

"But the publicity in those last 24 hours was so tremendous that we decided to postpone it," Haghani said. "We wanted to see if if there would be more buyers."

The auction was called off. A few weeks later, on election night, Davis called with an offer. He agreed to pay US$1.39 million - an 11 per cent premium on the then-asking price of US$1.25 million.

By the time the transaction closed in December, Trump had won the election. The house was an even hotter commodity, and another auction was set for Jan 17.

"It was that simple," Haghani said. "We sold the house twice in 60 days."

He would not, however, comment on the buyer, or how many bids it received.

Back in September, Trump himself expressed interest in scooping up his childhood home.

"That's it. That's where I was born," Trump said on the Tonight Show Starring Jimmy Fallon. "I want to buy it. I loved it. It was a warm place."

But, Haghani said, he doesn't think the president shelled out for the house - at least not now.

"As far as I know, he's not the buyer," Haghani said. "But ultimately I do wish to sell it to him."