Hollywood Celebrities Are Making a Fortune By Flipping Houses in LA
In recent years, a new trend has emerged among young Hollywood stars - buying and flipping houses for a profit. While veteran celebrities like Ellen DeGeneres and Diane Keaton have been doing it for years, a new generation of stars such as Miley Cyrus, Ariana Grande, Vanessa Hudgens, and Ashley Tisdale have jumped on the bandwagon. And it seems like they are making quite a bit of money from it. According to The Hollywood Reporter, industry experts say that the trend of celebrities buying and flipping houses is due to the current "cool factor" associated with being an entrepreneur, being good at business, and being financially literate. Heather T. Roy of Heather & Learka at Douglas Elliman says, "Being involved in real estate is perceived as all these things."
Southern California's favorable housing market means that sellers can often make a tidy profit in a remarkably short period. Carl Gambino of Compass says, "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, whereas, in New York City, depending on what you purchase, it could take five-plus years to gain incredible value. You have to hold longer."
Hollywood's fast-paced lifestyle also contributes to this trend, with entertainment clients buying and selling homes rapidly due to their ever-changing lifestyles. "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 are people making money in the entertainment business very quickly, and they upgrade," says Gambino. A significant portion of Hollywood's entertainment industry is involved in real estate flipping.
In 2021, Gambino's 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. Naomi Osaka also sold a Beverly Hills house for $8.7 million, for which she paid only $6.9 million just three years earlier. Other notable fast flippers include Sofia Richie and music exec Elliot Grainge, Ashley Tisdale, and Ariana Grande.
Real estate agents to the stars, such as Tomer Fridman, say that the entertainment industry's business managers are involved in the buying process from the start. Fridman said, "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 continued, "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."
Building a real estate portfolio is a smart investment for celebrities, says Emil Hartoonian of The Agency. "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."
Flipping houses is also an artistic outlet for celebrities, according to Fridman. "They 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."
