How $20M in South Side flips got fumbled into foreclosure

Deals involving Shaunte Porter, Carlos Perez and Florida-based lender A&S Capital have consistently fallen apart

How $20M in South Side Flips Got Fumbled into Foreclosure
A&S Capital's Alexis Agopian and Evo Group Inestments' Carlos Perez with 7200 S. Vincennes in Chicago IL (Google Maps, Evo Group Investments, A&S Capital)

A string of South Side multifamily flips ended in foreclosure lawsuits for a dozen buildings, hammering lenders on $20 million in deals that raised eyebrows among local real estate players.

The financial unraveling of 14 buildings in the neighborhoods of South Shore, Chatham, Grand Crossing and Auburn Gresham — 12 of which have already been foreclosed on or are in the process — followed a similar pattern, according to court documents and Cook County records.

The same two buyers — Shaunte Porter of Maywood and Carlos Perez of New Jersey — worked with the same two lenders and each other to transact almost all the properties. Porter appears, by the timing and prices of the deals, to have been a flipper; Perez looks to have been an investor who paid big prices financed by lenders who quickly unloaded mortgages.

Now, nearly all of their deals have gone bad, causing frustration among lenders left holding the bag, their lawyers and the properties’ receivers.

As the deals fell apart, Chicago landlords have been warning of the consequences of out-of-state prospectors overpaying for South Side apartments, such as high-priced deals delaying much-needed repairs.

In the case of a 24-unit building listed at 7200 South Vincennes Avenue, Porter, through Inner City Projects LLC, purchased the property on March 9, 2021 for $515,000. The property had an assessed value of $575,590 in 2023, according to the Cook County Assessor’s Office, and Porter snagged a mortgage loan for $777,000 from New Jersey-based lender NAP IV LLC. Typically, a buyer would be given a mortgage higher than the purchase price of a building if they present plans to upgrade or repair the property in ways that pencil out.

The next day, she sold it to an LLC run by Evo Group Investments Managing Partner Carlos Perez for $1.8 million — netting a profit of about $1.3 million with a holding period of just one day, records show.

Perez pulled in a $1.26 million loan for his purchase from Florida-based lender A&S Capital, which sold the debt before the building ended up in foreclosure. At 11 out of these 12 properties Perez bought, A&S has appeared to provide an initial mortgage loan. The debt from A&S then got sold off to other groups that often sold it again to a lender that filed for foreclosure.

Perez or LLCs run by him are named as defendants in each of the 12 foreclosure lawsuits that added up to $13.8 million in mortgage funds lost for properties bought in 2020 and 2021, according to public documents. He appears to have purchased the properties for a total of nearly $20 million.

In half of these cases, the loan notes ended up in the hands of Redwood BPL Holdings, which filed for foreclosure against Perez and his entities. In three other cases, the lender that ended up controlling the mortgage and filed for foreclosure was Wilmington Savings Fund Society, which served as a trustee for Residential Mortgage Aggregation Trust. The other three lenders left with the debt were Millennium Trust Company/Prime Meridian NPL, Axonic Credit Opportunities and PS Funding.

It’s unclear whether Redwood or other lenders that bought debt owed by Perez and his entities did so at a discount to the stated mortgage values. Prime Meridian’s website says it specializes in purchasing non-performing loans at a discount.

But the deals have drawn the scrutiny of multiple Chicago real estate professionals who have been surprised or confused by Perez’s arrangements. A handful of his properties have been seized at foreclosure auctions in recent months following lengthy and contested court proceedings.

Foreclosures on Carlos Perez-owned properties

Leaflet map created by Adam Farence | Data by © OpenStreetMap, under ODbl.

Porter, meanwhile, is staying quiet. Reached by phone, she initially agreed to an interview, but ended the calls before one was conducted, and later did not respond. She runs a company called Grade A Development in Oakbrook.

An attorney representing Perez in the foreclosure suits did not respond to multiple requests for comment from The Real Deal. The email and phone number listed for Evo Group Investments weren’t functioning when tried by The Real Deal.

Requests for comment to A&S Capital and the attorneys representing lenders that bought its loan notes for Perez’s properties also went unreturned.

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While fighting the foreclosure of a building at 8216 South Martin Luther King Drive, Perez tried to sell 15 of his properties to Longwood Development LLC for a total of $11 million — ostensibly to pay back some of the outstanding debt against the buildings. The agreement asked Longwood to put up $300,000; then Longwood would have been given 10 days to inspect the properties to decide if it wanted to close the deal. A sale never materialized.

Longwood could not be reached for comment.

Some of Perez’s buildings have also ended up in the city’s housing court for building code violations and safety hazards to tenants during or close to the same time as their foreclosure cases. This is noteworthy because Chicago landlords cited with violations are first called in for administrative hearings and the matter is only taken to housing court if the owner fails to make necessary repairs.

A judge ordered an outside property manager to briefly take over running the Vincennes building. The job was given to Community Initiatives, Inc., the city’s receiver and partner with the Troubled Buildings Initiative, a program designed to identify poor management practices to prevent the loss of affordable housing.

Perez “paid a high price for a building in need of extensive repairs,” a receiver’s report to the court from 2022 said. It noted that the property would have to sell for more than $135,000 per unit in order to clear the debt Perez took out on the property and also fund the nearly $2 million in needed repairs for the building. That per-unit price would exceed the most expensive sale for 12-to-24-unit buildings within a 2-mile radius of 2021, which was the real estate market’s peak.

Community Initiatives, Inc. determined it was not feasible to make repairs on the building.

Its inspection revealed conditions hazardous to the building’s tenants including “imminent danger of falling brick” requiring canopies to be set up to protect people walking to and from the entrances. Inspectors also found water damage from leaking pipes, electrical problems and structural issues.

The other properties purchased by Perez that ended up in foreclosure are listed in public records at the following locations: 8216 and 8031 South Martin Luther King Drive; 8102 South Maryland Ave.; 7758 South Racine Ave.; 8200 South Paulina Street; 2900 East 79th Street; 7157 South Yale Ave.; 8100 South Paulina Street; 1626 West 79th Street; 1505 West 79th Street; and 7816 South Phillips Ave.

Many of the buildings have recently been sold at foreclosure auctions held by the Judicial Sales Corporation and ended up under the ownership of lenders holding debt secured by the properties. No other takers have outbid the lenders.

The two other properties purchased from Porter by Perez that have avoided foreclosure thus far are 8256 South Racine Avenue and 11214 South Indiana Avenue.

Perez still owns the Racine property and sold the building on Indiana Avenue for just under $1.4 million in 2022 — or about $100,000 less than he paid two years earlier, records show. The buyer was an LLC tied to Christopher Milliner of south Chicago suburb Tinley Park and Shaya Wurzberger of Brooklyn.

The assessed value of the South Indiana building was $1.04 million in 2023, according to the Cook County Assessor’s Office.

In the foreclosure case at 7758 South Racine, an attorney for the New York Mortgage Trust affiliate – the lender that ended up buying the property’s loan note — alleged that Perez was bordering on being found in contempt of court, a September legal motion shows. The loan on the South Racine property was originally provided by A&S for $2.2 million.

Amid the lender’s attempt to foreclose, the Perez-led venture allegedly was “constantly interfering and refusing to provide the receiver with keys of rental units,” and wouldn’t allow the receiver to access properties or receive rents from tenants, the court records show.

The matter was eventually resolved as a sheriff’s sale of the property was approved by the court in February, putting it into the New York Mortgage Trust affiliate’s control, records show. A sale of the property has not yet been recorded.

It’s not just mortgage lenders who have accused Evo Group leaders of not paying their dues on time. A law firm in New Jersey, Genova Burns, in February filed a lawsuit accusing Evo Group, its founder Christian Chavez and Vadim Michael Korytny of failing to pay more than $40,000 owed for legal services the law firm provided, according to New Jersey court records. Genova Burns didn’t immediately return a request for comment, and the case remains pending.

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