I am getting a little bit sick of all of the fabulism*, with the latest fabulist winning a seat in congress! I would like to think that some of my work has prevented, or will prevent, the next George Santoses from emerging, so when someone sent me this new substack from one of my suspects, I couldn't let it go…FULL TAKEDOWN IN THE SANTOSIAN CRADLE MODE!!!
They live amongst us people! Hold on…I think I just threw up in my mouth a little! ;)
Who says stuff like this? This is of course the mortgage fraudster Deshayes that I wrote about last week. I'm sure this future bestseller will make for a gripping read, but if Mr. Deshayes is such a successful "multi-millionaire" businessman (a 1 percenter is generally recognized as someone with a net worth of at least $10Million), as claimed then:
-What happened to his restaurant and food ventures from just a few years ago? (they failed even before the pandemic…).
-Why didn't the actual mother of his children that he just divorced the day before marrying the new model get a dime? Was he hiding the millions somewhere?
-Why did he have to get taken to court to pay an $8,000 bill to Spencers for home appliances? Perhaps he changed his mind on the color**? This is amongst other bad business practices he has been taken to court for and lost repeatedly in Arizona at a minimum.
-Why did both of you "ethical and licensed Arizona realtors" have to engage in very obvious mortgage fraud?
-You won't mind paying back this fraudulently obtained mortgage….like immediately!?
-Why hasn't he paid back this $31,000 PPP loan? Why did he need it!? Why wasn't it forgiven? Some fibbing on the payroll perhaps? How much PPP moneys are included in these millions?
-Why did you require a costly $100,000 Line of Credit on your principal residence in September of 2022?
-Why would you need to rent your home/Tesla out to strangers for the superbowl?
-I'm sure the IRS, the AZ Department of Revenue, your ex-wife, and your employees and business partners will be interested in your sudden acquisition of these millions.
You might have additional questions!? The Full Substack post is here if you’d like to ask them or subscribe and find out how “members of the 1% live life like…without all the filters!”
One thing I haven't been getting into (because it isn't all that relevant to the fraud) is whether, in the absence of fines and prison for mortgage fraud, these rental properties are even good investments? I could make an argument with some of those 2% interest deals that I have seen, that yes, that looks like a pretty sweet leveraged long-term investment even if rents and values tank a bit. In this case it looks like a very hard no for these financial geniuses.
Even with the benefit of fibbing about this being an owner-occupied home, the Deshayes were only able to get a fixed 5.75% (7 year ARM) interest rate on their $530K loan to purchase the $595K home which would now appear underwater and sinking. That rate seems kind of high for a 10 x Millionaire, no!? That is $30K of interest alone. I'm not a real-estate investor, but I imagine you should probably assume at least 2 or 3 points a year for property taxes, insurance, management and maintenance/upkeep? Let's say $15K to be safe? So, they have to net at least $45K per year in rent, just to break even economically (I assume cashflow isn't an issue for them ;)). Properties like this in this area are going for $2.5K - $3.5K/month. Say best case they never have an eviction (they appear to be renting to felons with a history of evictions…), maybe they can net $40K of rent per year? That doesn't sound like a great investment to me. Of all of the properties/mortgages I have looked at (100’s now?), this would seem to have the highest likelihood of default in even a small downturn.
Lastly, if you are successful entrepreneurs/millionaires, then why do you have so much time to write this bullshit book? At a minimum I hope all of these questions and more are answered!
*I do realize that while "fabulist" is in the dictionary, "fabulism" has not yet been similarly favored. It should be.
**Another excerpt from Richie Rich White Man, or whatever it’s called…you can’t make this sh$t up!