Equity Build Finance, LLC
Investor · Montello, WI · Member since 2012 · 8 posts · 4 votes
Equity Build Finance, LLC
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Investor · Denton, TX · Member since 2012 · 2 posts · 3 votes
11yYes, I have two investments with them that are both nail biters.
My opinions only:
My gut feel is that they're above board and not a scam. But operationally they seem to have some challenges. Communication is less than desired as projects progress and especially when they get into trouble. While it does seem like they're working on that aspect, I don't feel that they understand what good communication to their investors should look like. The folks they put in place to communicate to investors are fairly new and don't know a lot of what's going on.
One equity investment i have with them in Chicago has taken some bad turns and I may or may not see all my principal back. They had a conference call to explain what had happened and what the plan was. The explanations seemed reasonable but no communication for a couple of months after the call. Then i pushed for a status and found out that plans laid out in the conference call had fallen apart - yet with no investor update. Ongoing communication (where we are, what's next and what are the milestones) is lacking and only comes partially when i really push for details.
Another lending investment i have with them in Puerto Rico is supposed to complete in few months but has already been delayed twice. The explanations seem reasonable but communication has not been good, though they did finally have a conference call recently.
I understand from the Equity Build Finance (frequent) sales emails that none of their deals have ever lost money but i am obviously a little skeptical (but hopeful).
I would love to hear of other's experiences - successful or otherwise.
107 Replies
- Rental Property Investor · Boynton Beach, FL · Member since 2014 · 273 posts · 197 votes9y
@James Roberts - Being you have experience managing properties wouldn't getting a property an self managing be a better financial return as opposed to paying a turnkey/prop mgmt. firm. Of course, this assumes you are looking to invest locally and not just out of state.
- Real Estate Investor · Encinitas, CA · Member since 2013 · 225 posts · 91 votes9y
Latest update. 1 of the 2 loans I had left with EB did pay off. It ended up paying off 50 weeks after the maturity date. But I did eventually get my principle back.
I have 1 more loan with them. It is now 4 months past maturity (was supposed to pay off December 2016). I am still getting monthly interest payments. The most recent "update" that I have is that the expected refinance/payoff date is September 2017. (That would be 9-ish months after the maturity date.) I do believe I am on the buyout list for this loan as well since I have never accepted an extension.
- Investor · San Diego, CA · Member since 2017 · 1 post · 0 votes9y
I am thinking about investing in a new project called Longwood. All of the posts are over a year ago it appears. What are you investors experiencing now?
- Real Estate Investor · Sacramento, CA · Member since 2017 · 1 post · 0 votes9y
I have invested in two properties. Both have been extended - not my choice - on one I have been told that in October I should get my principle returned but no guarantee on interest after more than 30 months when it was to be a three month investment. Not a good thing. The other was to pay off in March 2017, extended to 7/1/17 and now extended to October - this one pays monthly interest and I do receive the interest payments each month. I have asked to be bought out for over a year on the long one and now receive an email stating there will be no more buyouts. I needed to be cashed out on all investments due to family problems and this could not be done. I've talked to John Allred and he explains they are restructuring and I cannot do anything but wait. I'm not sure what more I can do and will hope I get my funds back in October 2017.
- Real Estate Investor · Encinitas, CA · Member since 2013 · 225 posts · 91 votes9y
Echoing what Debbie said.. My last note has now been "extended" for a 3rd time. (I have rejected every extension by DocUSign but that seems like a complete waste of time.)
If it pays off in March, it will be 15 months past due. Im getting 10% a month. The interest is still being paid. Every month I get an update on my investments that says Im getting 12%. No, Im not. (My return was reduced when I failed to roll over some funds and my total investment with EB/EBF dropped below some magic number).
The 2 previous loans that I had with EB/EBF, the excuse was the issue with their contractor ripping them off. So that set both projects back. Not the case with this one. (Originally I was told there were NO problems with this property and it would pay off on time. Nope.) I think it's just bad management. There is a different excuse every X months.
The "no more buyout" stance is correct. Even the 5% haircut for a buyout that I was once offered is now off the table. They are now offering something like 15 or 16% to put together a fund or something. All new funds will be going there NOT to take care of current investors. I still do get marketing emails from them once a week or so. When I asked for a call about one of those, John Allred did call me but he didnt even know which deal I was talking about. I guess they have so many marketing emails going out you need to tell them which specific deal you want when they call.
- Real Estate Investor · Encinitas, CA · Member since 2013 · 225 posts · 91 votes8y
Just got a call from Shaun. He was not making any excuses and understood my situation. We will be tele-conferencing weekly until the situation is resolved. I do appreciate his getting personally involved and am optimistic that this situation can be resolved to my satisfaction.
- Member since 2018 · 1 post · 0 votes8y
DON'T INVEST! I'm a current investor and several days ago received notice that there has been an internal announcement that they are defaulting on most of their current commitments, even while they continue to offer new investors projects that they claim will be unaffected by the defaults. Just talked to their "relationship manager" who told me that they're not giving him specific information about these defaults, but they're supposed to convince current investors to accept a transfer from lenders (that is, give up their current promised interest payments) and accept equity in the underlying properties which may or may not pay off. Sounds sketchy to me. I'm planning on filing a complaint with the Illinois Attorney General's office, and link up with other investors to explore filing a lawsuit.
- 8yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Ryan Dunn:
DON'T INVEST! I'm a current investor and several days ago received notice that there has been an internal announcement that they are defaulting on most of their current commitments, even while they continue to offer new investors projects that they claim will be unaffected by the defaults. Just talked to their "relationship manager" who told me that they're not giving him specific information about these defaults, but they're supposed to convince current investors to accept a transfer from lenders (that is, give up their current promised interest payments) and accept equity in the underlying properties which may or may not pay off. Sounds sketchy to me. I'm planning on filing a complaint with the Illinois Attorney General's office, and link up with other investors to explore filing a lawsuit.
not sure your in a criminal act here.. from what I followed of this company they were selling fractionalized beneficial interests to investors in Mortgages in Chicago on buildings they were rehabbing.. If the buildings failed or the projects failed then you as the Bene have the choice to foreclose and take the asset..
Were it becomes dicy and you probably did not realize this when you invested but your just one of many co investors and unless the company gives you the list of who else is in your deal.. or if your investment was truly brought in with a fresh assignment of beneficial interests ( which would all be clearly denoted in a fresh title report).. its hard to know who all is in this loan with U.
It sounds like if they cant make payments they are changing you over to equity investors and you all can then move your Beneficial interest to a tenant in common interest if your on title or .. maybe they are going to form an LLC to own the asset and swap your Beneficial interest in the note and mortgage to an ownership interest in the LLC and retire the loan and the LLC would own the asset free and clear.. ???? maybe that is whats happening then when the asset sells you all get what you get..
- Attorney · Northbrook, IL · Member since 2017 · 719 posts · 549 votes8y
@Ryan Dunn Sorry to hear about the bad news, I always hate to see an investor lose money and potentially sour on real estate. I'm a bit shocked to hear they are still operating, I heard rumblings they were having serious problems a couple years ago.
I've never dealt with this company personally so I can't speak to their ongoing business practices. I had a couple clients approach me about investing with them several years ago and reviewed the offering memorandum. There were enough discrepancies and red flags that I advised them to run from the deal. The only specific item I can remember is an issue with the purchase price. The package sent to the investor stated they had purchased the building for well over $200K, but when I pulled up the building records, they had paid almost half that amount. I've dealt heavily with investment buildings on the south side of Chicago and know the neighborhoods well. In my opinion, they bought buildings in pockets with a history of horrible rent collection, but when you do a pro forma rent collection on paper, they look like a gold mine. I'm guessing most investors never toured the properties and didn't hire someone local to give them a second opinion.
I would hope somewhere in your agreement was a clause that gives you the right to examine the books or request detailed financials for the building. Before you make any decision, you need to know the status of rent collection, any outstanding building code or city violation cases on the building, rehab or construction at the building, and exactly how much money and how many investors are attached to the building.
- Member since 2018 · 2 posts · 0 votes8y
My mother has a EB note that is now not paying / happy to discuss with any others in similar situation
- Union City, CA · Member since 2015 · 2 posts · 0 votes8y
I am in same boat with EBF, as Ryan and Jay. Will love to connect with others in similar situation. Thanks.
- Investor · Santa Rosa, CA · Member since 2015 · 18 posts · 8 votes8y
That boat is starting to get crowded. Count me in (the boat).
I have had some similar experiences to the above. I'll update later in the near future since I'm trying to decide how to proceed.
Thanks, Len
- Member since 2018 · 3 posts · 0 votes8y
Looks like Equity Build boat of screwed investors is overfilled regret to admit I am Shaun/Jerry Cohen newest victim. Based on my research this pair operate under 42 different identities all over the map: Company Name: COHEN INVESTMENTS, LLC
State: FL
Corporation Number: L05000082373
Status: INACTIVE
Status Description: INACTIVE
Record Type: CURRENT
Address: 1157 BOND CT, MARCO ISLAND, FL 34145-4511
Filing Date: 9/26/2008
Record Date: 10/18/2017
Title: MEMBER MANAGERCompany Name: TIKKUN HOLDINGS, LLC
State: FL
Corporation Number: L13000052308
Status: ACTIVE
Status Description: ACTIVE
Record Type: CURRENT
Address: 1050 8TH AVE, NAPLES, FL 34102-8115
Filing Date: 4/9/2013
Record Date: 10/18/2017
Title: MANAGERCompany Name: 1632 SHIRLEY LLC
State: FL
Corporation Number: L15000001496
Status: ACTIVE
Status Description: ACTIVE
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 1/5/2015
Record Date: 10/18/2017
Title: MANAGERCompany Name: YISRO HOLDINGS LLC
State: FL
Corporation Number: L16000058317
Status: ACTIVE
Status Description: ACTIVE
Record Type: CURRENT
Address: 1050 8TH AVE, NAPLES, FL 34102-8115
Filing Date: 3/22/2016
Record Date: 10/18/2017
Title: MANAGERCompany Name: YISRO HOLDINGS LLC
State: FL
Corporation Number: L16000058317
Status: INACTIVE
Status Description: INACTIVE
Record Type: CURRENT
Address: 1050 8TH AVE, NAPLES, FL 34102-8115
Filing Date: 9/22/2017
Record Date: 10/18/2017
Title: DIRECTORCompany Name: GLOBAL2WAY ACQUISITION, INC.
State: FL
Corporation Number: P02000070060
Status: INACTIVE
Status Description: INACTIVE
Record Type: CURRENT
For Profit: For Profit
Address: 678A BALD EAGLE DR, MARCO ISLAND, FL 34145-2541
Filing Date: 9/19/2003
Record Date: 10/18/2017
Title: VICE PRESIDENTCompany Name: COVER YOUR ASSETS, INC.
State: FL
Corporation Number: P06000029548
Status: INACTIVE
Status Description: INACTIVE
Record Type: CURRENT
For Profit: For Profit
Address: 1157 BOND CT, MARCO ISLAND, FL 34145-4511
Filing Date: 9/14/2007
Record Date: 10/18/2017
Title: PRESIDENTCompany Name: PETROLUBE, INC.
State: FL
Corporation Number: P06000096714
Status: INACTIVE
Status Description: INACTIVE
Record Type: CURRENT
For Profit: For Profit
Address: 1157 BOND CT, MARCO ISLAND, FL 34145-4511
Filing Date: 9/14/2007
Record Date: 10/18/2017
Title: PRESIDENTCompany Name: EQUITYBUILD, INC.
State: FL
Corporation Number: P07000119394
Status: ACTIVE
Status Description: ACTIVE
Record Type: CURRENT
For Profit: For Profit
Address: 1050 8TH AVE, NAPLES, FL 34102-8115
Filing Date: 11/4/2016
Record Date: 10/18/2017
Title: MANAGERCompany Name: 1422 E68 LLC
State: IL
Corporation Number: 04703197
Status: GOOD STANDING
Status Description: GOOD STANDING
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 2/14/2017
Record Date: 12/18/2017
Title: MANAGERCompany Name: 1422 E68 LLC
State: IL
Corporation Number: 04703197
Status: NOT IN GOOD STANDING
Status Description: NOT IN GOOD STANDING
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 2/1/2017
Record Date: 2/6/2017
Title: MANAGERCompany Name: 1422 E68 LLC
State: IL
Corporation Number: 04703197
Status: VOLUNTARY DISSOLUTION
Status Description: VOLUNTARY DISSOLUTION
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 1/26/2018
Record Date: 1/29/2018
Title: MANAGERCompany Name: 7823 ESSEX LLC
State: IL
Corporation Number: 04705068
Status: GOOD STANDING
Status Description: GOOD STANDING
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 1/29/2018
Record Date: 2/5/2018
Title: MANAGERCompany Name: 7823 ESSEX LLC
State: IL
Corporation Number: 04705068
Status: NOT IN GOOD STANDING
Status Description: NOT IN GOOD STANDING
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 2/1/2017
Record Date: 2/6/2017
Title: MEMBERCompany Name: EB SOUTH CHICAGO 1 MANAGER, LLC
State: IL
Corporation Number: 04941349
Status: GOOD STANDING
Status Description: GOOD STANDING
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 8/30/2016
Record Date: 8/21/2017
Title: MEMBERCompany Name: EB SOUTH CHICAGO 1 MANAGER, LLC
State: IL
Corporation Number: 04941349
Status: NOT IN GOOD STANDING
Status Description: NOT IN GOOD STANDING
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 10/1/2017
Record Date: 12/18/2017
Title: MEMBERCompany Name: EB SOUTH CHICAGO 1 MANAGER, LLC
State: IL
Corporation Number: 04941349
Status: REVOKED
Status Description: REVOKED
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 4/13/2018
Record Date: 4/23/2018
Title: MANAGERCompany Name: EB SOUTH CHICAGO 2, LLC
State: IL
Corporation Number: 05219906
Status: NOT IN GOOD STANDING
Status Description: NOT IN GOOD STANDING
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 5/1/2016
Record Date: 7/20/2016
Title: MANAGERCompany Name: EB SOUTH CHICAGO 2, LLC
State: IL
Corporation Number: 05219906
Status: REVOKED
Status Description: REVOKED
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 11/10/2016
Record Date: 11/21/2016
Title: MANAGERCompany Name: EB SOUTH CHICAGO 2 MANAGER, LLC
State: IL
Corporation Number: 05219914
Status: NOT IN GOOD STANDING
Status Description: NOT IN GOOD STANDING
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 5/1/2016
Record Date: 7/20/2016
Title: MANAGERCompany Name: EB SOUTH CHICAGO 2 MANAGER, LLC
State: IL
Corporation Number: 05219914
Status: REVOKED
Status Description: REVOKED
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 11/10/2016
Record Date: 11/21/2016
Title: MANAGERCompany Name: EB PROPERTY HOLDINGS LLC
State: IL
Corporation Number: 05578159
Status: GOOD STANDING
Status Description: GOOD STANDING
Record Type: CURRENT
Address: 1414 62ND PL, CHICAGO, IL 60637-2946
Filing Date: 12/20/2017
Record Date: 12/26/2017
Title: MANAGERCompany Name: EB PROPERTY HOLDINGS LLC
State: IL
Corporation Number: 05578159
Status: NOT IN GOOD STANDING
Status Description: NOT IN GOOD STANDING
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 1/1/2017
Record Date: 1/9/2017
Title: PRESIDENTCompany Name: EQUITYBUILD, INC.
State: LA
Corporation Number: 42078778F
Status: ACTIVE
Status Description: ACTIVE
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Record Date: 3/15/2018
Title: PRESIDENTCompany Name: EQUITYBUILD, INC.
State: LA
Corporation Number: 42078778F
Status: INACTIVE
Status Description: INACTIVE
Record Type: CURRENT
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Record Date: 7/16/2018
Title: MANAGERCompany Name: 3310 WABASH, LLC
State: MS
Corporation Number: 923288
Status: DISSOLVED
Status Description: DISSOLVED
Record Type: CURRENT
Address: 385 EDGEWOOD TERRACE DR, JACKSON, MS 39206-6217
Filing Date: 12/3/2007
Record Date: 9/21/2015
Title: PRESIDENTCompany Name: EQUITYBUILD, INC.
State: IL
Corporation Number: 66593851
Status: GOOD STANDING
Status Description: GOOD STANDING
Record Type: CURRENT
For Profit: For Profit
Record Date: 4/2/2018
Title: PRESIDENTCompany Name: 8214 INGLESIDE, INC.
State: IL
Corporation Number: 70237547
Status: GOOD STANDING
Status Description: GOOD STANDING
Record Type: CURRENT
For Profit: For Profit
Filing Date: 6/15/2015
Record Date: 7/16/2018
Title: PRESIDENTCompany Name: 109 N. LARAMIE, INC.
State: IL
Corporation Number: 70351315
Status: GOOD STANDING
Status Description: GOOD STANDING
Record Type: CURRENT
For Profit: For Profit
Filing Date: 9/2/2015
Record Date: 7/16/2018
Title: PRESIDENTCompany Name: 7026 CORNELL, INC.
State: IL
Corporation Number: 70400022
Status: GOOD STANDING
Status Description: GOOD STANDING
Record Type: CURRENT
For Profit: For Profit
Filing Date: 11/2/2015
Record Date: 11/6/2017
Title: PRESIDENTCompany Name: 7304 ST. LAWRENCE, INC.
State: IL
Corporation Number: 70397749
Status: GOOD STANDING
Status Description: GOOD STANDING
Record Type: HISTORICAL
For Profit: For Profit
Filing Date: 10/29/2015
Record Date: 10/2/2017
Title: PRESIDENTCompany Name: 6001 SACRAMENTO, INC.
State: IL
Corporation Number: 70479907
Status: GOOD STANDING
Status Description: GOOD STANDING
Record Type: CURRENT
For Profit: For Profit
Filing Date: 12/31/2015
Record Date: 12/7/2017
Title: PRESIDENTCompany Name: 5955 SACRAMENTO, INC.
State: IL
Corporation Number: 70479893
Status: GOOD STANDING
Status Description: GOOD STANDING
Record Type: CURRENT
For Profit: For Profit
Filing Date: 12/31/2015
Record Date: 12/7/2017
Title: PRESIDENTCompany Name: 6356 CALIFORNIA, INC.
State: IL
Corporation Number: 70479869
Status: GOOD STANDING
Status Description: GOOD STANDING
Record Type: CURRENT
For Profit: For Profit
Filing Date: 12/31/2015
Record Date: 12/7/2017
Title: GOVERNORCompany Name: EQUITYBUILD, INC.
State: WA
Corporation Number: 603562449
Status: ACTIVE
Status Description: ACTIVE
Record Type: CURRENT
For Profit: For Profit
Record Date: 11/28/2017
Title: GOVERNORCompany Name: EQUITYBUILD, INC.
State: WA
Corporation Number: 603562449
Status: DELINQUENT
Status Description: DELINQUENT
Record Type: CURRENT
For Profit: For Profit
Record Date: 2/20/2018
Title: GOVERNORCompany Name: EQUITYBUILD, INC.
State: WA
Corporation Number: 603562449
Status: TERMINATED
Status Description: TERMINATED
Record Type: CURRENT
For Profit: For Profit
Record Date: 7/17/2018
Title: PRESIDENTCompany Name: JCSC CONTRACTING CORP.
State: PA
Corporation Number: 1072151
Status: ACTIVE
Status Description: ACTIVE
Record Type: CURRENT
Address: 1755 SKIPPACK PIKE, BLUE BELL, PA 19422-1314
Filing Date: 12/22/1988
Record Date: 7/16/2018
Title: DIRECTORCompany Name: EB EQUITYBUILD CAPITAL, INC
State: TX
Corporation Number: 0801945145
Status: FORFEITED EXISTENCE
Status Description: FORFEITED EXISTENCE
Record Type: CURRENT
For Profit: For Profit
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 1/29/2016
Record Date: 3/17/2017
Title: DIRECTORCompany Name: EB EQUITYBUILD CAPITAL, INC
State: TX
Corporation Number: 0801945145
Status: INACTIVE
Status Description: INACTIVE
Record Type: CURRENT
Filing Date: 3/5/2014
Record Date: 3/17/2017
Title: DIRECTORCompany Name: EQUITYBUILD, INC
State: TX
Corporation Number: 0801945145
Status: FORFEITED EXISTENCE
Status Description: FORFEITED EXISTENCE
Record Type: CURRENT
For Profit: For Profit
Address: 1083 COLLIER BLVD, MARCO ISLAND, FL 34145-2539
Filing Date: 1/29/2016
Record Date: 3/17/2017
Title: DIRECTORCompany Name: EQUITYBUILD, INC
State: TX
Corporation Number: 0801945145
Status: INACTIVE
Status Description: INACTIVE
Record Type: CURRENT
Filing Date: 3/5/2014
Record Date: 3/17/2017
- Member since 2018 · 3 posts · 0 votes8y
Latest and Greatest. Apparently Mr.Cohen closely monitoring and reading these postings. Few days back his new fixer a.k.a Chief Operating Officer Ron contact me to address allegation of EB fraudulent activity. To make the story short after endless promises and wasted few days, he can't answer one very simple question. WHERE IS MY $50K invested in one of Shaun schemes? I am confident that Cohen a.k.a Maidoff, using new clients funds to enrich himself and pay off other established clients, instead of actually investing in Chicago defaulting projects.
- Appraiser · Myrtle Beach, SC · Member since 2015 · 9 posts · 1 vote8y
Unfortunately, I am forced to admit that I am also in the sinking EB "boat". I had many misgivings almost 3 years ago when I started this string on Bigger Pockets. I was contacted recently by a lawyer from Florida who was representing a lady investor with EB and he was telling me he believes this is a Ponzi scheme. We discussed a possible class action suit. Maybe that is a way for us to band together to get something done? I have not replied to him regarding this. I would love further comments from fellow investors. Please reply quickly as time is of the essence. Thanks
- Appraiser · Myrtle Beach, SC · Member since 2015 · 9 posts · 1 vote8y
Shaun Cohen has just sent a video to investors. He lays out possible scenarios and talks a pretty good game. I know that the best chance of getting the principal back would be if there was a genuine workout with EB. The problem is at this point, we don't know who to trust. Has anyone else seen this video and if so, what do you think?
- Real Estate Investor · Hartford, CT · Member since 2009 · 1 post · 0 votes8y
I'm an investor with Equity Bulld Finance and would love to connect with others regarding the recent developments.
- Member since 2018 · 2 posts · 0 votes8y
you can find me on linkedin would also like to connect with other investors who are the situation
- Appraiser · Myrtle Beach, SC · Member since 2015 · 9 posts · 1 vote8y
Has anyone else seen the video from Shaun Cohen? I'm wondering how we can form a collective group to discuss this. Anyone have a suggestion?
- Member since 2018 · 1 post · 0 votes8y
Did anyone else respond to the email from Equity Build on Friday, 8/10, to "schedule an appointment" and not get a call back?
- Investor · Chicago, IL · Member since 2012 · 111 posts · 73 votes8y
This article just came out in Crain's
- Attorney · Northbrook, IL · Member since 2017 · 719 posts · 549 votes8ySEC accuses Florida firm of using South Side apartments in Ponzi scheme
EquityBuild pitched the area as a great place to invest, but it failed to deliver on its lofty promises and relied on new money raised to bail out its investors, according to a lawsuit.
This 40-unit apartment building at 7549-7559 S. Essex Ave. is an EquityBuild investment.
The marketing brochure on the EquityBuild website touts the “enormous opportunities” investors can reap by investing in apartment buildings in the South Side of Chicago—and helping to turn around struggling neighborhoods.
“We have seen how improving one building can begin the process of uplifting a block, a street, a whole neighborhood,” says the flier from the Florida-based real estate firm. “We are committed to the ideal that we and our investors can do well by doing good. It’s an amazing feeling to know you’re making such a difference.”
Many EquityBuild investors might not be feeling so amazing today after learning of a lawsuit saying they have been victims of a major Ponzi scheme. Filed yesterday by the Securities & Exchange Commission, the suit accuses EquityBuild and its leaders of defrauding investors it recruited to invest in a portfolio of South Side properties, which turned out to be not such great investments after all.
EquityBuild affiliates “sustained heavy losses and the properties they pitched to investors failed to earn anywhere near enough to pay the promised double-digit returns,” the complaint says. “As a result, (the EquityBuild) investment program devolved into a Ponzi scheme: Defendants could only pay earlier investors by raising funds from unwitting new investors.”
Led by a father-and-son team, Jerome and Shaun Cohen, EquityBuild and a subsidiary, EquityBuild Finance, have raised at least $135 million from more than 900 investors since 2010, according to the suit, filed in federal court in Chicago. In 2013, they even went on a television show hosted by former "Star Trek" legend William Shatner to pitch their offerings.
“The SEC’s allegations are inaccurate and we believe we have done nothing wrong,” the Cohens, who are both named as defendants in the suit, said in an email. “We intend to fight this vigorously.”
The investments include two South Shore properties—a 40-unit apartment building at 7549-7559 S. Essex Ave. and a 31-unit building at 2909 E. 78th St.—that an EquityBuild fund acquired in January for $3.2 million, according to Cook County property records.
The suit didn’t say how many Chicago properties EquityBuild has invested in, but the firm’s website features six. A search of Cook County property records turns up hundreds of documents tied to EquityBuild, but multiple documents typically trace back to the same building.
EquityBuild solicited investors mainly to invest in debt used to finance properties, promising fat returns—ranging from 12 to 20 percent—and downplaying the risks, according to the SEC complaint. The business marketed its investments over the internet, through social media, emails and presentations.
“It lured these really unsophisticated non-accredited investors who appeared to have little to no experience with real estate investing,” said Joshua Kons, a securities lawyer with offices in Chicago and Connecticut who has been in contact with EquityBuild investors over the past few years. “Watch out what you find online because if it’s too good to be true, it might. I think that’s what happened here.”
EquityBuild, based in Marco Island, Fla., and the Cohens defrauded their investors in multiple ways, according to the SEC. They skimmed 15 to 30 percent off each investment through fees that they didn’t disclose, according to the complaint.
“In many cases they did this by telling investors that the properties being purchased cost substantially more than what defendants actually paid for them,” the suit says. “This meant that investors were not only overcharged, but the real estate supposedly securing their investments was worth much less than what defendants told investors.”
But the investments performed poorly, and the business devolved into a Ponzi scheme as EquityBuild and the Cohens started using new money they raised to pay off existing investors, according to the SEC. From January 2015 through February 2017, EquityBuild investors received about $14.5 million in interest payments, but income and fees from EquityBuild properties totaled only $3.8 million, according to the suit.
“Defendants never told investors that they were relying on fresh investor funds, rather than income-producing properties, in order to finance the interest payments,” the complaint says.
EquityBuild’s internal financial statements revealed that the firm lost $12 million in 2015, according to the suit.
The SEC says it filed the complaint to stop a Ponzi scheme in progress.
- Real Estate Investor · Encinitas, CA · Member since 2013 · 225 posts · 91 votes8y
The vultures are circling:
https://www.investmentlossattorney.com/ponzi-schem...
If you are have invested with Equitybuild or Equitybuild Finance, you may be able to pursue recovery of any losses that you may suffer through securities litigation. Please call the Chicago office for a FREE, NO OBLIGATION consultation to discuss your legal rights and options.
- Attorney · Northbrook, IL · Member since 2017 · 719 posts · 549 votes8y
I'd like to take this moment to beg all of you to take the time and hire an attorney before you make any real estate investments. I see far too many posts on this site from investors that say they either don't use an attorney, don't need one, or don't want to waste the money on one. Please take the time and spend the small amount of money to have an attorney review the documents for a deal and protect your money from these companies.
I talked to my clients yesterday that I steered away from Equity Build and I can't tell you how happy they are to have avoided this loss.
- Member since 2018 · 1 post · 0 votes8y
Hi Demetres,
I'm an investor with EB and am looking to speak with other investors about the current SEC Lawsuit.
Thanks,
Carolyn Mueller
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