"The group reportedly purchased more than 700 homes largely in majority-Black neighborhoods at inflated prices financed by debt service coverage ratio (DSCR) loans. Investors are accused of taking out $100 million in DSCR loans from dozens of private lenders using projected rental income as collateral. According to the report, many transactions were recorded for prices far above each property's previous sale value or public appraisal estimate."
"Most of the excess funds allegedly flowed to an LLC controlled by Eidlisz with no evidence that promised renovations ever took place. Of the hundreds of properties tied to the group, The Banner found that more than 70% showed no record of renovation permits since 2019, despite claims of significant improvements. Now, over half of the portfolio is reportedly in foreclosure, raising fears about neighborhood stability, declining property values and displaced tenants."
More than 700 homes were purchased largely in majority-Black neighborhoods at inflated prices financed by debt service coverage ratio (DSCR) loans. Investors reportedly took out about $100 million in DSCR loans from dozens of private lenders using projected rental income as collateral. Many transactions recorded prices far above prior sale values or public appraisals; one townhouse purchased for $100,000 had sold for $13,000 five years earlier yet secured a $220,000 loan. Excess funds allegedly flowed to an LLC controlled by Eidlisz with no evidence of promised renovations. Over 70% of properties showed no renovation permits since 2019 and over half the portfolio is in foreclosure, creating risks of instability, falling values, and tenant displacement.
Read at www.housingwire.com
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