by Neena Satija | Nov 28, 2011 8:07 am
After milking them for years while stiffing banks and failing inspections, Janet Dawson and Michael Steinbach have unloaded a small chunk of their rental-house empire. Local property-flipper Wade Beecher (pictured) got his hands on four of them, on behalf of some well-heeled “Venezualan friends.”
That is the latest twist in the saga of the Dawson-Steinbach empire, which includes hundreds of properties in poor city neighborhoods, many of them criticized by city inspectors as under code and many of them nevertheless receiving federal Section 8 rent subsidies.
The properties include 227 Clinton Ave. in Fair Haven, where tenant Delwanna Wiggins was injured when the bathroom ceiling in her second-floor apartment caved in on her two years ago. (She’s still waiting to get the $30,000 judgment she was awarded in court; read more about that here).
Beecher wouldn’t comment on the practices of the Dawson/Steinbach team. He said he plans to fix up all the houses and make sure they’re up to standards. (Wiggins’ apartment is paid for largely by the government’s Section 8 rental assistance program. It failed its most recent health inspection).
“I have a reputation to keep,” said Beecher as he sat on the steps of the Fair Haven house. “That’s why my hands are dirty and calloused.”
A known property-flipper in town, Beecher uses “hard money” to buy up bunches of cheap houses, fix them up, and then unload them at a profit.
That’s not what he’s doing in this case, however, he said. He’s acting on behalf of other investors.
Beecher buys many properties under his own name and limited liability corporations he’s created, such as Wades Housing LLC. With the newly transferred Dawson/Steinbach houses, though, he’s not the owner. He’ll fix up the properties, collect the rents, deliver them to the owners and take a percentage, he said. He wouldn’t say how much.
Beecher’s quest for Dawson/Steinbach properties started more than a year ago when he called his “buddy” Dave Zamary, an employee of First County Bank. First County Bank is a major lender for Beecher, as well as for Dawson and Steinbach.
“I called Dave up and I said, ‘What have you got for foreclosures?’” Beecher recalled. “He says, ‘Well, we’re working on this Apple Management stuff.’”
Zamary was talking about nine properties embroiled in dragged-out foreclosure lawsuits by the bank against Dawson and Steinbach (whose corporate aliases have varied from Betty Boo LLC to Apple Management LLC to Apple Holdings LLC). Would Beecher like to buy the mortgage notes? he asked.
“Rather than fully foreclose, [the bank] said ‘Have somebody buy the notes,’” Beecher said. “But I don’t have deep enough pockets.”
“Elite” Steps In
So Elite Property Investments LLC bought the package of mortgage notes instead. It was that company, registered to a man named Leonard C. Goldberg in North Haven, that finally foreclosed on the properties this October.
After that, Beecher said, someone “called me and asked if I was interested in the package.” Beecher wouldn’t say who the caller was. He said he wanted all nine, but he said his staff “procrastinated” and managed to get four—all through different LLCs.
He couldn’t remember which LLC actually ended up buying 227 Clinton Ave. recently, because “there are so many different LLCs.” (LLCs enable investors to shield most of their assets from potential suits and often to shield their own involvement in transactions.) Records show the property was bought for $94,900 by Ziyad Holding Company LLC, which is registered in Miami Springs, Florida.
Beecher confirmed he is working with Ziyad, but he wouldn’t say who set up the company. “There are some things that are confidential,” he said. “We’re a group of investors…I’ve got to protect my guys.”
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