Dykstra had purchased the 12,713-square-foot Lake Sherwood, Calif. estate, originally built for hockey great Wayne Gretzky, as an investment property at the start of the recession in 2007, the Ventura County (Calif.) Star reported.
Dykstra took out more than $18 million in loans to purchase the property that was auctioned last week for $760,712, the newspaper said.
Two years after the purchase, he defaulted and put the property up for sale, asking $25 million. The property wound up selling for less than 5 cents on the dollar.
Filing for bankruptcy allowed Dykstra, who played for the New York Mets and Philadelphia Phillies, to postpone the loss of the property, but the court ultimately ruled he was incapable of fixing his financial problems and allowed the seizure and sale of assets to pay creditors.
Dykstra had no comment about the auction.
"I have no idea about it," he said. "I can't comment on something I know nothing about."