Taking a chance on a mansion

When Rich Lee sold his Raleigh company Hosted Solutions for $310 million last month, he planned to travel the world soaking up the good life.

But after visiting the 71-acre North Raleigh estate created by fellow entrepreneur Peter Loftin, Lee did something that only a really rich person would dare do these days.

He became a real estate developer.

Last month, Lee paid $2.95 million for Loftin's 18,000-square-foot mansion, which had been foreclosed upon and taken back by the lender.

Lee plans to buy the rest of the property abutting Falls Lake and, along with custom homebuilder Rex Bost, revive Loftin's plans to create a gated community of less than two dozen homes. "I never thought I'd be a real-estate developer," said Lee, 45. "But once I took a look at the land, the house and saw what I think this place could become. I'm just over the top excited about it."

He's also excited about moving into Loftin's opulent mansion, which includes 10 bedrooms, 12 baths and five half-baths, a 1930s-style movie theater, a built-in humidor, a custom wine cellar made from actual wine barrels and a custom fountain that shoots water 40 feet in the air.

Lee, who recently got engaged, will have plenty of room to entertain.

"It's a little bit overwhelming when you go through that house," he said. "We were talking about giving tours and just giving people a map and saying go at it."

There's a certain symmetry to Lee taking over Loftin's Shangri-La, which was once on the market for $32 million but has been untended for more than a year.

Loftin started Raleigh-based BTI Telecom. He sold in 2003 for $138 million.

Lee and a partner started Hosted Solutions in 2001 by paying $375,000 for the assets of a data center that had gone bankrupt. Lee, the company's CEO, decided to leave after Hosted Solutions was acquired by telecom provider Windstream.

Lee lived up to his promise to travel for a little while.

He went on a week cruise, spent time in Laguna Beach and San Francisco, and traveled to Arizona to watch his alma mater Auburn win a national football title.

Now he's planning to split time between his North Raleigh home and a condominium he owns in the Paramount in downtown Raleigh.

Lee and Bost don't expect to deviate much from Loftin's original plan for the community, though the development's name is being changed from Still Creek to Alpine Creek Estates.

As for the prospect of trying to sell high-end custom homes in today's shaky market, Lee acknowledges it will likely take several years to find buyers for the 21 lots.

"I think it's good that I'm going to be the bank on this," he said. "This is all very patient money."