Property Update (11/25/2025):

Governance Results for 656 E 126th St:

The Governance Voting results are back for the owner proposed votes.

The winning vote is:

Accept the Offer

This voting option received 318 / 455 token votes, which is equal to 70% of the total votes.

The voting results can be found on chain here or by searching the application ID: 3341135579

The winning vote is:

Authorize Earl Vanze Co to sign closing documents as Authorized Member on behalf of the DAO, settle all debts, and send net proceeds to Lofty for distribution via token redemption.

This voting option received 322 / 455 token votes, which is equal to 71% of the total votes.

The voting results can be found on chain here or by searching the application ID: 3341135993

Property Update (11/24/2025):

Owner-Proposed Governance Vote for 656 E 126th St:

The property manager, ECO Systems with the following wallet address, is proposing a governance vote.

They hold 0 tokens in this property.

The property manager's reasoning is below, word-for-word:

*Because this is an owner proposed vote, Lofty cannot change the content. It’s up to owners to verify the accuracy of the claims below.

Fellow owners,

We have received a $52,500 cash offer, no contingencies. Please see HUD-1 settlement statement in Dropbox.

Net to the DAO is $44,068.68 at closing which includes all back taxes, before reimbursements for expenses.

Financial Summary:

Due TO Yhome (Reimbursement for funds paid to Aligned) -$20,371.67

Due to Evernest -$2,490.07

Due to Universal Lending DAO -$592.35

Due to Lofty

-$4,359.34

Due to ECO Systems (Includes 1.5% Transaction Coordination Fee) -$2,122.30

Estimated Total Debts -$29,935.73

Net Sale Proceeds +$15,802.78

Number of Tokens 1,722

Estimated Net Asset Value Per Share $12.72

Owners may now vote by 11/25/2025 at 5 PM EST.

Vote 1:

1. Accept the Offer

2. Cancel the sale (I have a BETTER offer)

Vote 2:

1. Authorize Earl Vanze Co to sign closing documents as Authorized Member on behalf of the DAO, settle all debts, and send net proceeds to Lofty for distribution via token redemption.

3. Do not authorize Earl Vanze Co to sign closing documents, resulting in cancellation of the sale.

The results will be determined by a 60% Supermajority and sent to all owners on Tuesday, November 25th once the voting period ends.

Property Update (11/03/2025):

Yhome is owed $20,371.67 for repairs here. That said, these repairs are still not enough to bring this property up to code, though it may be rentable. See latest inspection report in Dropbox and photos

$2490.07 is owed to Evernest

$1910.65 is owed to Taxes

$9,140.66 is owed to Lofty, which probably includes the above and may also include $851.58 that I already paid. If I deduct all that, only $3,888.36 is owed to Lofty.

$1334.80 is owed to me, which includes that insurance payment through August.

In total, $29,995.55 is total owed to everyone. ~$20k to Cal, $10k to everyone else.

Property is worth $52,500 (cash offer, no contingencies). Factoring in 6% closing costs and broker fees, NAV is ~$11.24/share.

Property Update (07/23/2025):

As previously mentioned, Lofty took legal action against the seller of this property, covering all legal fees ourselves, due to undisclosed lead issues in the purchase agreement.

A judgment was recently awarded totaling $68,529.50. This includes costs for lead abatement, lost rental income, punitive damages, and attorney fees.

You can view the judgment here. To collect the awarded amount, we will be engaging a debt collection company. Owners will be updated as soon as there is progress on the recovery of funds.

We want to assure our community of both sellers and buyers that Lofty takes abuse of our platform seriously.

While it’s true that we operate as a marketplace, so that investors are responsible for conducting their own due diligence on whether a property and it’s corresponding financial structure makes sense for them as an investment, anyone purposely abusing the platform by providing intentionally misleading data/information with the intention to deceive Lofty or our users will be dealt with seriously.

We reserve the right to pursue any available legal remedy available to us in addition to referring cases to local, state, and federal regulators or prosecutors.

Unfortunately, legal matters can take a long time to resolve and our team is NOT always able to reveal certain information to users during the process as advised by our counsel.

We appreciate everyone’s patience throughout the years.

Property Update (07/15/2025):

Governance Results for 656 E 126th St:

The Governance Voting results are back for the owner proposed vote to change property managers.

The winning vote is:

Transition to ECO Systems LLC as PM with Aligned, Hemlane, or Nomad as Sub-PM 15% Property Management Fee to ECO Systems Leasing Fee

This voting option received 612 / 634 token votes, which is equal to 97% of the total votes.

The voting results can be found on chain here or by searching the application ID: 3120226862

Property Update (07/07/2025):

Owner-Proposed Governance Vote for 656 E 126th St:

The current property manager, M1 Homes LLC with the following wallet address, is proposing a governance vote.

M1 Homes LLC holds 0 tokens in this property.

The property manager's reasoning is below, word-for-word:

*Because this is an owner proposed vote, Lofty cannot change the content. It’s up to owners to verify the accuracy of the claims below.

PROPOSAL: Transition Property Management to ECO Systems LLC

Background:

When M1 Homes LLC was originally proposed as property manager, it was under the condition that the property in question would be free of outstanding financial obligations at the time of transfer. Unfortunately, that condition has not been met. The property currently carries unresolved debts and liabilities, placing it outside the original scope of M1 Homes’ intended role.

Given this, M1 Homes LLC does not believe it is appropriate or consistent with its original proposal to assume management responsibilities under the current financial conditions.

Recommendation:

We propose transferring property management responsibilities to ECO Systems LLC. Earl, representing ECO Systems, has been closely involved in the property’s financial tracking and has maintained comprehensive and transparent spreadsheets regarding its operational and debt status. His proactive engagement and detailed oversight make him well-positioned to step into the property management role at this time. Key Points Supporting This Proposal:

Original Agreement Integrity: M1 Homes’ proposal was contingent on a debt-free property. Continuing under current conditions would contradict that premise.

Established Oversight: ECO Systems, led by Earl, has already demonstrated deep operational familiarity with this property through diligent financial documentation.

Capital Flexibility: Upon transition, ECO Systems LLC will have the discretion to propose capital calls to EARLDAO as needed for property stabilization and repair planning.

Operational Efficiency: ECO Systems LLC, in coordination with Hemlane as sub-property manager, offers a lean and transparent fee structure with no repair markups and rent-readiness verification.

Property Management Transition (If Property is Retained):

Option 1 ) Transition to ECO Systems LLC as PM with Aligned, Hemlane, or Nomad as Sub-PM 15% Property Management Fee to ECO Systems Leasing Fee: One month's rent Hemlane rent-ready service $495 + materials & labor costs 10% markup on repairs or maintenance to Aligned if we must stay with them due to LAIC requirement, no markup to ECO Systems Rent placement to follow post-rehab verification

ECO Systems may initiate capital calls post-transition

Option 2 – Reject Vote #2 and Remain with M1 Homes LLC

M1 Homes remains as manager

No changes to current structure

Financial obligations remain unresolved under the existing framework

The results will be determined by a 60% Supermajority and sent to all owners on Tuesday, July 15th once the voting period ends.

Property Update (05/01/2025):

Note from Yhome Nursing LLC:

"Labor work has been completed for 656 E 126th.

Next Steps:

The property now requires a new lead clearance. Once the lead clearance is obtained, we will proceed with the approval process to move forward with the next phase of work.

Summary:

Labor is finished, and we are awaiting the lead clearance to continue. We will keep you informed of any further developments."

This property is in the process of migrating to the new owner-elected property manager, M1 Homes LLC.

Property Update (04/28/2025):

Governance Results:

The Governance Voting results are back for the owner proposed vote to change property managers to M1 Homes LLC.

The winning vote is:

Move to M1 for lower fees and better management

This voting option received 719 / 910 token votes, which is equal to 79% of the total votes.

The voting results can be found on chain here or by searching the application ID: 2959960270

Property Update (04/24/2025):

The current property manager, Yhome Nursing LLC, has put together a counter-proposal.

This is in response to the governance vote to change managers, sent out on 4/24, which can be viewed on the property page here.

If you have already voted, and would like to change your vote, click the button below, or at the end of this email.

Yhome owns 35 tokens in this property and their wallet address can be viewed here.

Their counter-proposal is below, word-for-word:

*Because this is an owner proposed vote, Lofty cannot change the content. It’s up to owners to verify the accuracy of the claims below.

Hi everyone,

It's worth noting that over the past several months, Yhome has consistently turned around multiple properties and continues to work diligently to protect and enhance the value of these assets.

In the case of this particular property, the claim that “nothing has been done” is simply inaccurate. The unit has been fully turned, photos were provided, and it is ready to be listed for rent. We were transparent in sharing that a health-related issue led to city involvement, and the necessary steps have been taken to resolve it—all of which has been clearly communicated.

Unfortunately, it's becoming apparent that certain individuals on Discord are pushing a coordinated narrative designed to discredit Yhome and prevent fair compensation, despite the significant work that has been done. Ironically, some are now advocating to reward new property managers who have yet to contribute meaningfully to the portfolio.

I strongly encourage you to vote against changing management. Let’s make decisions based on facts, performance, and transparency—not misinformation or politics.

Thank you for your continued support

Property Update (04/24/2025):

Owner-Proposed Governance Vote:

An Owner with the following wallet address is proposing a governance vote to change property managers from Yhome Nursing LLC to M1 Homes LLC.

This owner holds 10 tokens in this property.

The owner's reasoning is below, word-for-word:

*Because this is an owner proposed vote, Lofty cannot change the content. It’s up to owners to verify the accuracy of the claims below.

“Recent developments regarding yhome have surfaced serious areas of concern regarding financial transparency and after several months this property still isn’t passing inspection. M1 has agreed to take on management and get us back on track.

Options:

1. Continue with yhome and give up 3.5 percent dilutive equity immediately

2. Move to M1 for lower fees and better management”

The results will be determined by a 60% Supermajority and sent to all owners on Monday, April 28th once the voting period ends.

Property Update (04/14/2025):

Note from PM:

"We have ordered the windows and we start to work on that as soon as they get here, we will work on getting the lead clearance done after work is completed."

Property Update (02/10/2025):

The new owner-elected property manager, Cal with Yhome Nursing LLC, provided the following update:

"Dear Investors, I wanted to provide you with an update regarding 656 E 126th St. We have completed all the renovations as previously outlined and are ready to move forward.

However, there is a lead clearance order from approximately two years ago that needs to be addressed. This represents an additional expense, and I believe it’s important for you to be aware of it. We have obtained a quote for the necessary work.

While we attempted cost-effective repairs, due to the serious nature of a previous incident at the property, we must ensure full compliance. At Yhome, our goal is always to be cost-effective, and I will continue to seek better quotes. This is the current situation we are facing, and I will keep you updated.

In the meantime, I will arrange for someone to spend a few hours at the property to turn on the water and lights, ensuring we maintain our presence and prevent any further deterioration.

Thank you for your understanding.

Best regards, Cal"

Property Update (02/10/2025):

Cal, with Yhome Nursing LLC, provided the following update:

"Dear Investors, We are pleased to inform you that we are now working on getting the lead-safe certificate, which will allow us to list the property. We will be preparing to go live shortly once we are compliant. We will keep you updated on our progress. Thank you for your support."

Property Update (12/20/2024):

The property has been listed for rent at $1,395/month.

Property Listing

Property Update (12/16/2024):

Cal, the new owner-elected Property Manager with Yhome Nursing LLC, provided an update:

"I’m happy to report that the work on this property is complete. Photos have been ordered, and security will be installed shortly. We will keep you informed as we prepare to go live with the listing."

Video Walkthrough

Property Photos

Pending Rental Listing

Property Update (10/14/2024):

Governance Results:

The Governance Voting results are back for the owner proposed governance vote to take the property off the market and have Yhome Nursing LLC manage the property.

The winning vote is:

Take the property off the market and change management to Yhome Nursing, LLC

This voting option received 972 / 1,060 token votes, which is equal to 91.6% of the total votes.

The voting results can be found on chain here or by searching the application ID: 2364915328

The Yhome Nursing LLC management terms, provided by the owner, Calixte Duffaut, can be viewed here.

Under the management terms, Yhome Nursing LLC will cover the upfront costs for any repairs and expenses, and will recoup these funds, plus 6% interest, from a portion of the property’s cash flow.

There are no Operating Reserves for properties managed by Yhome. As a result, owners will begin receiving daily rent as soon as the property generates positive cash flow. Any future repairs or expenses will also be covered by Yhome, with reimbursement through the same process, plus 6% interest.

Property Update (10/11/2024):

DOM: 63 Days

The property had 0 showings in the last 7 days.

The listing agent noted that there has not been nearly enough showings on this property and it has been listed for over 60 days now.

The agent recommends to lower the purchase price by $5K.

The property is currently listed at $74,900.

Property Listing

Property Update (10/07/2024):

Owner-Proposed Governance Vote:

An Owner with the following wallet address is proposing a governance vote.

This owner holds 248 tokens in this property.

The owner's reasoning is below, word-for-word:

*Because this is an owner proposed vote, Lofty cannot change the content. It’s up to owners to verify the accuracy of the claims below.

I would like to propose that we take this property off the market and ask Yhome to manage it going forward, so that we can eventually become cash-flowing again, rather than sell at an unnecessarily staggering loss on our original investment.

Yhome will front the cost for repairs for properties they're managing, and collect half of the cash flow to get paid back + 6%. There will be no Operating Reserves for properties managed by Yhome, so owners will begin receiving a portion of the daily rent as soon as positive cash flow comes in. Any future repairs/expenses that come up will simply be paid for by Yhome as well + 6% interest.

The Yhome Nursing LLC management terms, provided by the owner, Calixte Duffaut, can be viewed here.

The winning vote will be determined by a Supermajority of 60%+ and the results will be sent to owners on Monday, October 14th, once the voting period ends.

Property Update (10/06/2024):

DOM: 56 Days

The property had 0 showings in the last 7 days.

The listing agent noted that there has not been nearly enough showings on this property and it has been listed for over 50 days now.

The agent suggests to lower the purchase price by $2K.

The property is currently listed at $74,900.

Property Listing

Owners have the ability to propose a governance vote anytime to delist the property for sale and migrate the property management to Yhome Nursing LLC.

The Yhome Nursing LLC management terms, provided by the owner, Calixte Duffaut, can be viewed here.

If owners elect to migrate to Yhome Nursing LLC, new repair estimates will be obtained, a loan will be provided at a 6% interest rate to complete the repairs, and the property will be rented out again.

Cal manages 9 other properties in the Cleveland & Akron markets on Lofty, and is the co-owner and Property Manager of the following co-ownership properties on Lofty:

402 N Wild Olive Ave

122 Florida Park Dr

49 Bannbury Ln

27 Pillar Ln

20 Sederholm Path

752 Gelaso St SW

Property Update (09/28/2024):

DOM: 50 days

The property had 0 showings in the last 7 days.

The listing agent recommends to lower the price by $2,000 due to the lack of showings since listing 50 days ago.

The property is currently listed at $74,900.

Property Listing

Property Update (09/23/2024):

Owner-Proposed Governance Results:

The Governance Voting results are back for the owner-proposed governance to delist the property and get a loan.

The winning vote is:

Take this property off the market, get a loan from the Universal Lending DAO sufficient to perform any additional maintenance expenses needed to rent the property and refill the operating reserve to 50%, and then ask Yhome to manage it going forward.

This voting option received 674 / 1,156 token votes which is equal to 58.3% of the total votes.

Because the governance vote did not reach a Supermajority of 60%+, the vote will not pass.

The voting results can be found on chain here or by searching the application ID: 2316803571

Property Update (09/21/2024):

DOM: 44 days

The property had 0 showings in the last 7 days.

The listing agent recommends to lower the price $2,000 and due to the lack of showings since listing.

The property is currently listed at $74,900.

Property Update (09/19/2024):

Owner-proposed Governance Vote:

An owner with the following wallet address has proposed a governance vote.

The owner proposing this vote holds 248 tokens in this property.

The owner's reasoning is below, word-for-word:

*Because this is an owner proposed vote, Lofty cannot change the content. It’s up to owners to verify the accuracy of the claims below.

We're looking at getting $29/token for our investment at best if this sells at the current asking price, which there is no sign it will. Selling at the HouseCanary low estimate (which is what most Lofty properties have sold for recently on the open market) would net us something closer to $20/token after OR debt repayment, commissions, and closing costs.

I would like to propose that we take this property off the market, get a loan from the Universal Lending DAO sufficient to perform any additional maintenance expenses needed to rent the property and refill the operating reserve to 50%, and then ask Yhome to manage it going forward, so that we can eventually become cash-flowing again, rather than leave it vacant in the hopes of selling at a staggering 80% loss on our original investment.

The winning vote will be determined by a Supermajority of 60%+ via the Ranked Choice Voting method and the results will be sent to all owners on Monday, September 23rd once the voting period ends.

Property Update (09/07/2024):

The property had 1 showing in the last 7 days.

The Buyer has expressed interest and may be putting an offer in this upcoming week.

The listing agent advised that the Buyer will most likely submit an offer under asking price.

Property Listing

Property Update (08/31/2024):

The property has had 0 showings since listing it for sale.

However, the Listing Agent has several leads they are working on scheduling showings with.

The Listing Agent re-ran the CMA and found that the properties sold in the area were between $8k -$40k. The average price sold at $44k. The agent recommended reducing the listing price to $74,900.

Property Listing

Property Update (08/06/2024):

Governance Results:

The Governance Voting results are back for the vote on which price to list the property for.

The winning vote is:

List the property for $84,900 (Listing agent's recommendation)

This option was declared the winner in Round 1 with 635 token votes via the Ranked Choice Voting method.

The other voting options were eliminated in Round 1:

List the property for $95,000

73 token votes

List the property for $80,900 (Listing agent's recommendation)

29 token votes

List the property for $90,000

13 token votes

List the property for $75,000

23 token votes

The listing agent will default to be listed on Roofstock with their partner agent, Alex Johnson with Real Estate Quest, Inc., which provides exposure both on Roofstock and the MLS.

Owners can propose a vote to choose another listing agent at any time. If an offer is received, owners will have the ability to vote to accept, deny, or counter the offer.

Property Update (07/29/2024):

Governance Vote:

The governance results are back for the governance vote to do a capital call or sell the property.

The winning vote is:

Sell the property.

This option received 778 / 825 token votes which is equal to 94.3% of the total votes.

Owners will now have the opportunity to vote on the listing price.

The property has an unpaid bill balance of $5,116.50 owed to the Property Manager, which will be paid at closing.

The property was originally purchased on 04/15/2022 for $74,280. The HouseCanary Valuation as of May, 2024 is $72,770.

The property was originally purchased on 04/15/2022 for $74,280. The HouseCanary Valuation as of May, 2024 is $72,770.

Alex Johnson, a Roofstock partner with Real Estate Quest, Inc., recommends the following:

4 Beds / 1 Bath

Year Built: 1918

Sq Ft: 2165

There are 2 UNDER CONTRACT Listings for Single Family Properties in 44108 area near the above named property:

The following is the listing prices for the 2 UNDER CONTRACT properties, similar to 656 E 126th Street…

Minimum $50,000

Maximum $75,000

Average $62,500

There was 1 SOLD Listing for Single Family Properties in 44108 within the last six months in the area near 656 E 126th Street:

The following is the price of the one property that SOLD near 656 E 126th Street… That property was located at 10517 Elk Avenue, Cleveland, OH 44108.

Minimum $99,000

Maximum $99,000

Average $99,000

With the amount of work needed, I would suggest listing 656 E 126th Street somewhere between $80,900k -$84,900k.

The winning vote will be determined by a Supermajority of 60%+ and the results will be sent to all investors on Monday, August 5th once the voting period ends.

Property Update (07/20/2024):

Governance Vote:

Per the previous updates, a legal case was brought against the seller for failure to disclose the Lead Hazard Control Order and to abate any defects prior to closing. The legal fees were paid for in full by Lofty.

A Motion for Default Judgement can now be filed since the defendant has not filed an answer.

A collections attorney was engaged to review the probability of collecting and/or garnishing wages on the Seller.

The attorney reviewed the case and advised that with the little information that he has on the Seller, the probability to collect is low.

The collections attorney would need to know what assets the Seller has and they're not easy to find, especially if they are in the business of flipping houses and the assets are not in his name.

Additionally, the attorney had an issue with perfecting service on the Seller and they were able to dodge the server several times.

Due to the low probability of being able to collect or garnish wages from the Seller, the Motion for Default Judgement will not be filed.

A total of $3,135.56 in legal fees was paid for in full by Lofty.

Owners will now have the ability to do a Capital Call to complete the repairs, pay the unpaid bills, and rent the property out again. Owners will also have the option to sell the property.

Per the previous update, the lowest cost estimate received for the required turn repairs totals $3,993.50, and the lowest cost estimate received for the lead repairs totals $2,500.

The property has an unpaid bill balance of $5,116.50 owed to the Property Manager.

Due to the depleted Operating Reserve, owners now have the ability to raise a Capital Call to complete the repairs, pay off the unpaid bills, and rent the property out again. Owners can also choose to sell the property outright.

Owners now have the option to do a Capital Call for $12,000 (includes a cushion for insurance and utilities payments), complete the turn repairs, pay the unpaid bills, and rent the property out again. Owners can also choose to sell the property outright.

The property was originally purchased on 04/15/2022 for $74,280. The HouseCanary Valuation as of May, 2024 is $72,770.

Alex Johnson, a Roofstock partner with Real Estate Quest, Inc., recommends the following:

4 Beds / 1 Bath

Year Built: 1918

Sq Ft: 2165

There are 2 UNDER CONTRACT Listings for Single Family Properties in 44108 area near the above named property:

The following is the listing prices for the 2 UNDER CONTRACT properties, similar to 656 E 126th Street…

Minimum $50,000

Maximum $75,000

Average $62,500

There was 1 SOLD Listing for Single Family Properties in 44108 within the last six months in the area near 656 E 126th Street:

The following is the price of the one property that SOLD near 656 E 126th Street… That property was located at 10517 Elk Avenue, Cleveland, OH 44108.

Minimum $99,000

Maximum $99,000

Average $99,000

With the amount of work needed, I would suggest listing 656 E 126th Street somewhere between $80,900k -$84,900k.

If the Capital Call option is chosen, an owner of the property or the Universal Lending DAO must be willing buy any unsold tokens if the Capital Call does not fully fund within the 15 day funding period. If an owner does not back the Capital Call within one week of this option being chosen, then the property will be listed for sale.

The terms of past Capital Calls are as follows:

The interest rate paid to owners contributing funds to the capital call will be 13.5%.

When the Operating Reserve is <50% full, half of all net rental income should go to the Operating Reserve, and half to pay off the loan; when the Operating Reserve is >=50% full, 100% of net rental income should be used to pay off the loan.

4 year repayment period

The capital call offer is open for 15 days.

The owner will back any unsold tokens from the capital call.

If a Supermajority is not reached to do a Capital Call, then the property, by default, will be listed for sale on the open market. If this occurs, a separate vote will also be sent to owners to determine the listing price. After the property is listed for sale, owners are still able to propose a governance vote to do a Capital Call and de-list the property for sale if they are willing to back it themselves.

The winning vote will be determined by a Supermajority of 60%+ and the results will be sent to all owners on Monday, July 29th once the voting period ends.

Property Update (05/11/2024):

The lowest cost estimate received for the required turn repairs totals $3,993.50.

The lowest cost estimate received for the lead repairs totals $2,500.

The property does not have a sufficient Operating Reserve in order to complete the turn repairs.

The legal case against the seller, for failure to disclose the Lead Hazard Control Order and to abate any defects prior to closing, is still ongoing.

Defendants were served with the Complaint by regular mail, with the answer being due April 30th.

On April 23rd, at the Conference Management, the Judge recognized that the service of the Complaint had been perfected.

The Judge granted the Defendants additional time to file an answer until mid-May.

If an answer is not filed by that time, then the attorney will move for default.

Previously, a Case Management Conference was held on 03/21 and 02/08.

The attorney confirmed service was perfected prior to the March and February Case Management Conferences, but then were returned as undeliverable prior to the hearing dates.

The legal fees for this case are being paid for in full by Lofty, not the DAO LLC Operating Reserve, for the seller's abuse of the Lofty marketplace.

Property Update (02/03/2024):

The PM received an estimate totaling $7,150 for the lead based paint removal. The estimate will be added to the property's Dropbox folder once the vendor sends it over.

The PM is working to obtain an additional estimate.

The legal case against the seller, for failure to disclose the Lead Hazard Control Order and to abate any defects prior to closing, is still ongoing. Owners will receive an update on the status of the legal case shortly.

The legal fees for this case are being paid for in full by Lofty, not the DAO LLC Operating Reserve, for the seller's abuse of the Lofty marketplace.

Property Update (01/20/2024):

The PM was able to further reduce the repair costs from $6,079.46 to $3,993.50, while still ensuring the property is rentable and will likely pass a city inspection.

The PM has also included a 15% discount on the estimate, as a courtesy to investors.

Repair Estimate

The tenant paid a security deposit of $2,052.

The property does not have a sufficient Operating Reserve in order to complete the turn repairs.

The PM is still waiting to receive an estimate for the lead hazard repairs as well.

The legal case against the seller, for failure to disclose the Lead Hazard Control Order and to abate any defects prior to closing, is still ongoing. Owners will receive an update on the status of the legal case shortly.

The legal fees for this case are being paid for in full by Lofty, not the DAO LLC Operating Reserve, for the seller's abuse of the Lofty marketplace.

Property Update (01/13/2024):

The PM provided an estimate of $6,079.46, which includes a discount of 15% from the original cost of $7,152.31 as a courtesy to owners due to the delay.

Repair Estimate

The PM is working with the maintenance manager to reduce the cost of the turn, as well as soliciting another vendor to provide an additional turn estimate.

The PM is currently waiting to receive an estimate for the lead hazard repairs as well.

Property Update (12/23/2023):

Evernest performed a move-out inspection of the property.

They received an estimate which is currently pending review from their team. An estimate for the lead hazard repairs will also be provided.

The PM advised there were significant delays in obtaining repair estimates from vendors in Cleveland over this past month.

Evernest recently assigned a Senior Property Manager to properties on Lofty in order to increase efficiency and performance, which includes completing repairs faster & renting units in less time.

This Senior PM will be the one point of contact, and will manage & assign tasks to other members of the institutional team including turn & listing coordinators.

All properties managed by Evernest are now managed by a single Senior Asset Manager, whose one and only job at Evernest is managing properties on Lofty.

The legal case against the seller, for failure to disclose the Lead Hazard Control Order and to abate any defects prior to closing, is still ongoing. More information on this can be viewed in the previous update. Owners will receive an update on the status of the legal case shortly.

The legal fees for this case are being paid for in full by Lofty, not the DAO LLC Operating Reserve, for the seller's abuse of the Lofty marketplace.

Property Update (09/19/2023):

Owners voted to change Property Managers from B2B Realty to Evernest Institutional Services.

Property Update (08/07/2023):

Update 1:

The tenant moved to another Lofty property, 12028 Wade Park Ave, on 8/1 due to the lead hazard issue.

Because the tenant moved out, the lead repair grant will be null and void.

Per the previous update, legal counsel was engaged to handle the case against the seller for the Lead Hazard Control order on the property.

The attorney advised that it's clear the seller is in breach of contract for failure to disclose the Lead Hazard Control Order and to abate any defects prior to closing.

The Initial Demand Letter was sent to the seller on 8/4.

The legal fees for this case will be paid in full by Lofty, not the DAO LLC Operating Reserve, for abuse of the Lofty marketplace.

The lawyer advised that the demand letter must state the plaintiff is the DAO LLC.

The attorney will file suit in the Cuyahoga County Court of Common Pleas if the Seller does not respond by 8/18, which will include claims for breach of contract, fraudulent misrepresentation, and fraudulent concealment, along with attorney fees and punitive damages.

The retainer fee stands at $1,500, with an hourly rate of $275, paid in full by Lofty.

Update 2:

The City approved a 3rd extension request and the deadline for lead repairs is now 10/14/23.

The PM had another lead assessment inspection completed to confirm that the repairs on the Lead Risk Assessment Report from the City are required.

The inspector confirmed that all of the repairs from the original report are still required.

The proposed methods include removal and replacement, enclosure, and specialized cleaning of various components such as windows, door frames, thresholds, wood trim, soffits, and garage walls.

The work is expected to take 20 days once materials have been received.

The total cost of the third estimate for lead abatement is $21,735 ($20,700 + 5% PM markup).

The additional estimates received are below:

Estimate 1: $10,500

Estimate 2: $16,222.50

The owner is responsible for final clearance costs, typically $500.

The proposal does not include any additional methods not listed or imposed by local agencies.

Property Update (05/24/2023):

The current tenant will be moving to 12028 Wade Park Ave, another Lofty property, on 07/01.

The tenant will pay the rent difference from the CMHA voucher.

The tenant has agreed to continue to assist with lead grant applications for the property.

If the property cannot obtain a grant, the cost of the lead repairs could reduce the tax burden as a Capital Expense.

The PM is in the process of obtaining a third estimate for lead abatement, and confirmed they received a 90 day extension for lead abatement from the City Health Department.

Property Update (03/18/2023):

The previous vendor was too busy to complete the leak repairs.

The PM obtained a third estimate to install a new bathroom tub faucet, reconfigure plumbing lines with shut-off valves, and install a tub spout and shower-head.

This would involve both the installation of new fixtures and adjustments to the existing plumbing lines to accommodate the new components.

This estimate is only $1,207.50 compared to the previous estimate of $1,929.90.

The PM was advised by the program administrator of the Lead Hazard Grant that the tenant is still missing documents for the grant application.

The PM reached out to the tenant and they stated that they have not received any communication from the program administrator.

The tenant is no longer interested in living at the property, citing health safety concerns for their family.

The tenant has requested an emergency removal through CMHA.

The PM offered to transfer the tenant to 12028 Wade Park Avenue.

The tenant has agreed to transfer to this property.

The tenant will pay the rent difference from the CMHA voucher.

The tenant has also offered to continue to assist with lead grant applications for the property.

If the property cannot obtain a grant, the cost of the lead repairs could reduce the tax burden as a Capital Expense.

Property Update (02/08/2023):

The compliance repairs for CMHA were completed.

CMHA has approved the property and the lease with a rent increase to $1,130, a $104 increase from the previous lease of $1,026.

The new subsidized rent of $1,130 started on 11/01/2022 and pays for 100% of the rent.

Owners will receive rent back-pay for the difference in rent from 11/01/2022 - 02/07/2023 and daily rent will increase starting today.

The PM advised that CMHA was slow to update them on the rent increase approval, which is reason for the delay.

The tenant is responsible for all utilities and owners are responsible for trash removal. The utility costs have decreased from $146/month to $98/month which will be reflected in the CoC Return moving forward.

The lease agreement is currently being redacted and will be uploaded to the property's Dropbox folder.

Property Update (02/04/2023):

Update 1: The PM was working on getting the property Lead Certified and the inspector found that the property was placed on a Lead Hazard Control by the Health Department back in February, before the property was purchased. The seller was contacted and they provided a Lead Safe Certificate that was signed off by the City in April.

The PM reached out to the Health Department to resolve the issue with the City. The Health Department advised that the orders take precedence over the Building and Housing certificates, and therefore the Lead Safe letter for the property is no longer valid. The seller was asked to pay for any repairs resulting from this, but they did not comply as they were under the impression the Lead Safe Certificate would suffice.

Owners have an opportunity to apply for a Lead Hazard Control Grant which can cover up to $10,000 in repairs. The application has been completed and submitted to the City. The application status is pending review, which can take up to 6 months.

The City is not forcing the tenants to vacate the property in the meantime, so owners will continue to receive daily rent.

The PM has requested for an additional extension with the Health Department.

The PM also obtained two repair estimates per the Lead Hazard Control report. These repairs are required regardless if the Lead Hazard Control Grant is approved or denied.

Estimate 1: $10,500

Estimate 2: $16,222.50

The Property Manager recommends Estimate 1 because it remediates the lead and is less expensive.

Lead Hazard Control Form

Update 2: The tenant has reported another leak in a different area of the house. The vendor has confirmed that this leak is coming from a different area on the roof. Additionally, there is a leak from the shower and the pedestal sink is broken. The necessary repairs include: Replacing the shower valve with a single handle style, replacing the tub surround, and repairing the ceiling damage caused by the leak.

The total cost of these repairs is $2,415.

The PM requested the vendor to revise their estimate to replace the shower valve with a 3-handle style.

The vendor was unable to send a revised estimate, so the PM obtained a second estimate.

The new estimate includes: Removing the existing tub faucet and installing a new one, removing the pedestal sink and installing a new faucet and sink, snaking out the drains in the bathroom sink and tub, and removing and repairing bad spots on the ceiling and plastering the ceiling.

The total cost of the new estimate is $1,929.90

Repair Invoice

Repair Pictures

Property Update (11/01/2022):

A tenant was injured on the property when a ceiling fan fell

The tenant reported the issue with the ceiling fan to a vendor who was onsite for another work order, but the property manager advises that vendors should not be used to report work orders as they are only there for specific tasks

An insurance claim has been filed to investigate the incident and provide medical coverage for the tenant if necessary

The insurance adjuster will obtain a release or waiver when the claim is closed

The owners of the property are not liable for any accidents or injuries that occur on the property as it is owned by a DAO LLC.

Property Update (10/19/2022):

The Housing Authority has identified several repairs that need to be completed on the property before it can be approved for a tenant's Housing Voucher

These repairs include fixing a leaking kitchen faucet, reglazing the tub and shower, re-caulking and sealing the shower, installing a trim around the bottom of the tub, securing ceiling tiles, reinforcing railings on the porch, and repairing a hole in the ceiling of the porch

The total cost of these repairs is $2,997.75, which will be paid from the Maintenance Reserve and replenished through 10% of the cash flow

A compliance re-inspection is scheduled for the end of the month, and once the property passes, the Property Manager will confirm the effective date for the new lease.

Property Update (10/12/2022):

The property failed a compliance inspection due to a leak in the bathroom

Repairs are needed to patch the roof, replace damaged drywall, and repaint the unit

The total cost of repairs is $3,109.31

These funds will be taken from the Maintenance Reserve and replenished through 10% of the cash flow until it is full again

Once the property passes the compliance inspection, the Property Manager will confirm the effective date for the new lease

Property Update (09/23/2022):

The Housing Voucher program has negotiated a rent of $1,130 for the first year of the lease, with the tenant responsible for paying $449 and all utilities

Previously, owners were paying $1,750/year for utilities

A rent increase may be requested in the second year if the lease is renewed, at which point the 40% limit will not apply and a rent comparison will be conducted

The Property Manager is waiting for the compliance inspection to be completed before confirming the effective date for the new lease

If the compliance inspection is approved, the CoC return will be 11.9% once the new lease begins

Property Update (08/23/2022):

The tenant's voucher with EDEN will not be renewed and they have been approved for an 8 year voucher with CMHA until 2030

The tenant will pay 30% of the rent under the new voucher program

The Property Manager is working with CMHA to complete an inspection report and determine the rent for the new lease

The target rent for CMHA approval is $1,400, which would be a $374 (36%) increase over the previous rent of $1,026

If approved, the CoC Return would increase from 8.6% to 13.4%

There is a possibility that the rent may be negotiated down by CMHA, but there is also the opportunity for a rent increase.