DeRoo, Lee And Tauber Face Foreclosures in Chicago

Two different groups of investors facing widespread distress on the South Side of Chicago are facing more foreclosures, linking them together for the first time via new legal filings.

Republic Bank of Chicago filed a foreclosure complaint against investors Tyler DeRoo and Stephen Lee and their affiliated companies last week, and also named a company managed by New York-based investor Eli Tauber as a defendant.

When taken together, DeRoo and Lee’s portfolio as well as Tauber’s portfolio amount to dozens of distressed multifamily properties with hundreds of units throughout the South and West sides.

Republic Bank’s most recent foreclosure filing claims that a company controlled by DeRoo and Lee failed to pay off a $400,000 mortgage backed by two apartment buildings at 5923 and 5927 South Wentworth Avenue when it matured in May.

The outstanding balance including late fees totals $377,000. In addition to their LLC being listed as a defendant, both DeRoo and Lee are also personally named as guarantors on the mortgage and did not pay the mortgage off through their personal or business accounts, the filing alleges.

The pair of investors bought the properties in 2021 for $540,000, backed by the $400,000 mortgage. Then in 2024, the pair signed an agreement with Tauber to sell the properties to him.

There are no new deeds listed for the property after 2024. Still, Republic Bank listed an LLC tied to Tauber as a defendant due to his potential interest in the property through the agreement.

DeRoo said a broker brought up Tauber as a potential buyer for the property and they formed an agreement for Tauber to make payments toward the purchase and complete it by May 2026, when the current loan matured. He said he has not been closely involved in the sale process and that it was spearheaded by Lee.

DeRoo and Lee are currently engulfed in a contentious legal dispute with fellow investor Andy Oshay, and Tauber is facing dozens of foreclosure complaints in Chicago, New Jersey and New York.

Tauber did not respond to requests for comment and Lee could not be reached for comment.

Tauber was also hit with another new foreclosure of his own in April. Wilmington Trust, on behalf of a fund called Tryon Street Acquisition Trust I that’s linked to Churchill Real Estate, alleges Tauber stopped making payments one year ago toward a $1 million mortgage backed by a multifamily property at 9001 South Elizabeth Street near the Auburn Gresham neighborhood on the South Side.

Tauber bought the property in 2024 for $1.4 million from Izzy Rotenberg, another New York-based investor who is also facing mounting distress among his Chicago properties.

The filings come at a perilous time. Tauber, DeRoo and Lee, whose portfolios spread across the South Side and West Side, are facing numerous foreclosure complaints and code violations.

It’s part of a broader trend on the South and West sides in which cheap properties that were acquired rapidly when interest rates were low have since run into financial headwinds.

Rotenberg, for example, spent $48 million on an acquisition spree over the past few years and ended up controlling around 500 units on the South and West sides. Since then, he has faced over $30 million in foreclosure lawsuits and most properties have been returned to his lenders. A few of his foreclosure actions are still pending.