This is a fairly common dodge in real estate development: if you’re dodgy, you put all the nice stuff you want in your place, and cost out the price to all the others in the development.
Same with building 38 other apartments to finance the designer’s. It’s a level of arrogance, to be sure. But not illegal.
But... hiring 1 artist to do an installation for a building? That’s a money laundering dodge.
Art can be a BIG dodge, because there is no actual competitive market.
You’re over half sold. This is real-estate dev 101, but the break-even is supposed to be between 40%-50% of the building.
Something smells funny.
Remember when we were talking about Jason Mendoza, his $100K of fake drug money & wanting to move to Tampa?
But the gym isn’t just doing this for Jason. They’re taking in $1000/week from 20 laundry clients. They’re paying $16K out, but...
(I’m using deliberately small scale numbers here, because large numbers make our brains disconnect.)
Funny, there’s been a shift in how apartment buildings are being built, and it enables a lot of cash purchases.
And yet your investors still get a percentage of legal rent.
Money laundry exploits good practice.
And we’ve spent 35 years being relentlessly told that good government cannot exist.
Do we need a startup for crowd-auditing?
The link between real estate & money laundering is old & well established. Not all real estate is a laundry front, but we (at least in the places with property law derived from English Common law) make our tax law laundry friendly.
Truly: this is perfectly legal & massively exploited & happens at all levels. This is Rentier 101.
You can learn how it works by taking an H&R Block tax prep class.
Every building, whether luxury flats or permanently affordable, needs the same stuff: foundation that meets local codes, piping/electrical/low voltage [phone/cable] conduits, walls, roof.
There’s no such thing as a Luxury 2x4 or shingle.
What divides a luxury building from an affordable one is about 10%, in finish details. Which carpet, chrome or brushed stainless faucets.
Because the marketing sets the expectation of who one’s neighbors will be, and even in places with a high expectation of an egalitarian society, like Iceland’s 350K population, where 90% of the population is closely related.
(And so much branding and puffery. Don’t get me started on the prosumer range of appliances.)
To end: be skeptical of anyone feeding you a “poor little rich kid” line.