Before the wedding gifts, the Rolex, the luxury clothing and the loans, there was the real estate bubble.
Gov. Bob McDonnell invested heavily in real estate in 2005, as property values were still rising, and in 2006 and early 2007, as they began to plummet.
Often with his sisters as partners, McDonnell bought stakes in four residential properties — two in Virginia Beach, one in Henrico County and one at the Wintergreen resort in Nelson County — all purchased for a total of $3.8 million. Today, the properties are assessed at about $3.2 million.
Mortgages on two properties have been refinanced this year, and a slew of activity on the mortgage loans has taken place over the years.
McDonnell’s real estate holdings were thrust to the center of the gubernatorial gift scandal after The Washington Post revealed last week that Jonnie Williams Sr., the donor at the center of the scandal, gave $70,000 to MoBo Real Estate Partners, a limited-liability corporation owned by the governor and his sister. McDonnell’s wife, Maureen G. McDonnell, also received a $50,000 check from Williams. The Post reported that Bob McDonnell viewed the payments as loans rather than gifts.
In his financial disclosures, McDonnell has listed MoBo as owning two Virginia Beach rental properties that make up the bulk of his residential real estate holdings. They bring in $50,001 to $250,000 in gross income a year, according to his disclosure.
A Virginia Beach office building purchased for $3.15 million in 2004 by Racehorse Properties — an entity in which McDonnell has an interest — generates $50,001 to $250,000 in gross income a year. It is unclear how much interest McDonnell has in the building, which houses the law firm where he worked as managing partner before being elected attorney general.
That property has increased in value. It is assessed at $4.65 million.
Real estate prices here and nationwide peaked in mid-2006, leading to the collapse in the housing market.
In general, home prices throughout most of Virginia have rebounded to 2005 levels, but not in all cases, real estate experts say. People who bought houses from 2006 to 2008, when prices were unsustainably high, probably owe more than their houses are worth, the experts say.