Headlines may tell us that the richest 5% of Americans own two-thirds of the country’s wealth, but it’s difficult to fathom what that inequality gap actually means in real terms. Can the lives of billionaires really be so different from ours?
To answer that question, just read about their appetite for real estate. Consider the recent transactions of WhatsApp cofounders Jan Koum and Brian Acton, who hit the startup lottery back in 2014 when they sold their popular messaging service with just a wisp of a business model to Facebook for $22 billion.
“Over the last four years, Koum has paid $57 million in five separate transactions to assemble a monumentally scaled Atherton [California] compound. All five of the houses he acquired have either been razed entirely and replaced with all-new structures, or radically reimagined. Permits show he has spent an additional $20 million-plus for the site’s multiple new structures, including at least two separate mansions and a state-of-the-art, two-level detached garage that appears to span well over 10,000 square feet—in fact, the garage alone dwarfs some of the neighboring Atherton homes.”
Meanwhile, about four miles down the road in Palo Alto:
“Acton has spent the past five years, and a total of $86.25 million on seven modest Palo Alto houses all located on the same block. Aside from one case, all seven of the transactions were inked quietly off-market. The properties were never publicly listed for sale. To put the sale into context, fashioning multi-parcel residential compounds is hardly foreign behavior to billionaires in general or even billionaires in Palo Alto—Zuckerberg, Page and Powell Jobs have also purchased some of their neighbors’ homes. But Acton’s case stands out as an anomaly. With several of these properties, it appears he may have paid double, or even triple, their actual market value. And the total price point—nearly $90 million for the land alone—easily exceeds the amount paid by any of his fellow local billionaires.”
These details come from Penske Media’s newly launched Dirt.com, a site that sets out to do for the 1%’s real estate transactions what TMZ did for the celebrity airport intercept. A sort of gossipy MTV Cribs for the internet era, Dirt gives readers a peek into the homes—and by extension, the personal lives and bank accounts, of the uber-rich. The tone is pitched just so, making it unclear if Dirt reveres the wealth of those they cover (after all, Penske also runs the generally positive Hollywood trades Variety and Deadline.com), or it may be trying to expose the vast gulf between how most Americans live and the lifestyles of the mega wealthy.
In other words, Dirt.com’s playful cattiness works as both aspirational lifestyle fodder and eat-the-rich schadenfreude.
Either way, it’s 100x more fun than driving around a swank neighborhood to gawk at the houses.
Yolanda the Real Estate Yenta
Self-professed “expensive real estate nerd” James McClain, Dirt.com’s cofounder, fell into this quirky corner of entertainment news while attending USC and developing a hobby of sending leads to the Wall Street Journal, L.A. Times, and a blog called the Real Estalker, which was run by his now cofounder Mark David. Frustrated when some of his tips were not published, McClain decided to start his own tongue-in-cheek blog, adopting a pen name given to him by David. And so, “Yolanda Yakketyak the RealEstate Yenta,” a “kind and gentle lass who would love nothing more than to pet flowers and sniff puppies all day” but instead writes about high-end home sales in Los Angeles, was born.
Yolanda’s Little Black Book soon became the talk of the L.A. real estate circuit, ultimately growing to reach 300,000 page views a month largely through word of mouth. Yolanda’s anonymity; her coverage of high-profile targets such as Reese Witherspoon and Michael Douglas as well as the power players in media, tech, finance, and production; and her canny ability to report deals even before they were closed drove the industry and its clients bonkers.
McClain, meanwhile, was just a guy in his mid-twenties working several jobs while running the blog before landing a post in the finance department of high-end brokerage firm Compass. He was laid off from Compass in April 2018, but his one-time association with the disruptive real estate tech platform, which is now valued at $6.4 billion, was revealed when the L.A. Times broke the news of Yolanda’s identity in July of last year. McClain denies using his position to get information, and Compass launched an investigation. McClain says he is not involved in any lawsuit with Compass. [We have also reached to Compass for comment.]
Around the time of being unmasked, Variety came calling. McClain became a contributor to its real estate section, shedding his Yolanda persona to write under his own name. “I was Yolanda for almost four years,” he says. “It was getting a little tiresome to tell people, ‘I’m actually a dude and my name is James.'” Nine months later, Penske Media approached him to launch Dirt.com as a stand-alone property, a sort of real estate-focused TMZ.
Breaking new ground
In many ways, Dirt.com has a similar sensibility to McClain’s blog: Readers can browse such categories as athletes, celebrities, and moguls (a grouping that encompasses tech, finance, fashion, and purchasers of “very meta real estate”). Heirs and heiresses, politicians, and lawyers do not escape Dirt’s scrutiny either. Although currently L.A.-centric, McClain and David are hoping to expand Dirt.com’s coverage to New York and other cities and countries in the coming months.
McClain’s writing packs as much insight into a buyers’ personal life in his stories as he does architectural details. One post from early April—”Dick Wolf dumps $15 million on a Hope Ranch contemporary . . . for his wife“—urges readers to consider the enormity of the Law & Order creator’s wealth. “Just how rich is Mr. Wolf? Estimates vary, but most sites peg his net worth as somewhere north of $500 million. But perhaps even more shockingly—at least to Yolanda—is that according to that same TMZ article, Mr. Wolf hauls in somewhere between $10-$15 million per month. That’s right, kiddos. Each and every 30 days, Mr. Wolf grosses enough—theoretically, before taxes and all that jazz—to pay off his giant new mansion.” Yolanda then added a comment on the state of the producer’s third marriage. “Although he’s still technically married, it appears Mr. Wolf has wasted no time in securing himself a swank new bachelor pad—one guaranteed to attract a bevy of lovely ladies interested in auditioning for the role of wife #4.”
McClain says he prefers featuring purchasers from the business world to spotlighting the activities of traditional celebrities. “I’m not familiar with a lot of actors, actresses, and musicians, because I’m not an artistic person at all,” he says. “I’m much more interested in tech and businesspeople because that’s something I understand.” He also thinks there is “something inspirational” about the success of lawyers, producers, and business titans. “Some of them started out poor and now they have a $20 million home. Readers could see that and think, ‘Maybe I could do that one day.’ I wanted to write about how they got to that point.”
But he doesn’t spare them either. The recurrent, if unstated, theme of McClain’s work is that money can’t buy taste. In a July post, he described a recent Hollywood purchase by tech billionaire Peter Thiel but took a detour to describe his previous L.A. abode: “Thiel bought that place—originally designed in the 1950s by acclaimed architect Paul Williams—for $11.5 million in early 2012 and quickly spent untold millions more to raze and rebuild the entire mansion as a snazzy contemporary with an infinity-edged pool.”
McClain says he relies on tips from readers, but most of his information is accessible to anyone who knows where to look. “Google is such a gift for obsessive people like me,” he says. He also credits Instagram as the source of many of his stories. “The culture of oversharing has been really beneficial to me. If you can link a property to a business manager or an attorney, it’s pretty easy to find out who their clients are from the internet.”
For all his success, McClain still can’t believe he’s turned his obsession into a job. He hasn’t lost the enthusiasm captured on Yolanda’s “about” page: “Oh gosh how she loves it. Oh gosh, oh gosh. She is 98 years old. She is that old. But she doesn’t care. She loves it. Each and every house in L.A. What a dream! What an asparagus wish!”