This Is Why We're Journalists: About That Blockbuster Ben Lambert Deal
Yesterday, we trumpeted the killer sale Eastdil Secured’s Benjamin Lambert pulled off on his Upper East Side townhouse. He bought the place for somewhere in the mid-six figures in 1978, and just sold it for $10.5 million. Reader Richard S. Zimmerman, a partner at accounting firm Berdon LLP, points out that our math is a little off. Or a lot:
Your interest calculation on the Lambert sale is off by a large factor. Assuming Lambert had 100% financing in 1978 and purchased the house for $300K and he sold in 2011 at $10.4 M (minus the broker at 5% = $9.88M) his rate of return would be a more modest 10.5% per year not 2,000%.
Having foolishly believed the pen mightier than the calculator, we asked Mr. Zimmerman for further explanation, and he provided another handy—and telling!—example. Read More
