House Flipper EXPOSES Chicago Flipping PONZI SCHEME

What if your home flipping dream turned into a nightmare?

After 40 years in the industry, I've seen scams come and go, but this one takes the cake. Let's dive in on how this Ponzi scheme targeted both investors and families in Chicago. I'm Joe Homs, broker, investor, and mentor. For over 4 decades, I've seen the good, the bad, and the ugly in real estate. Today, we're going to break down a video that should serve as a warning to all of us. We'll uncover We'll uncover how this scheme unfolded, why it's a cautionary tale for investors, and how you can protect your portfolio. Stay tuned because this one hits hard.

T5 responds. A bad business model or a Ponzi scheme? That's what several people who invested money with a popular Chicago home flipping business are asking themselves tonight.

The owners of iFlip Chicago are accused in lawsuits of luring inexperienced investors into predatory loans lending to financially devastated Devastating consequences— leading, rather, to financially devastating consequences for dozens of Chicago families. PJ Randhawa unravels how things went wrong.

Do you have any idea who you're flipping with? That's got to be one of the first things that you investigate, especially with these so-called gurus out there. You need to find out who they are, what they're doing. And find out from boots on the ground and see if they're up and up. And this story that you're going to hear starts out good, but doesn't end up that way.

If you're interested in actually learning how to flip homes—

In late 2020, Amira Hadid signed up for a home flipping boot camp offered by real estate company iFlip Chicago.

iFlip Chicago boot camps is 100% hands-on, This is something that my mom always wanted to do, and I'm a fan of HGTV.

Yeah, and it's your own cousin.

Yeah, and who can't trust family?

My name is Romo Bay.

This is my wife, Michelle Nicole Bay.

That's Amira's cousin, Michelle Bay. She and her husband Romo Bay run iFlip Chicago. In addition to boot camps, the company offers joint venture partnerships to first-time investors who want to flip a home.

There were a lot of people who had successfully—

So I always tell people, I don't trust anybody, whether it's family or not. You have to investigate.

You have Yeah.

And you have to find out whether they're telling you the truth or not. You know, many times I hold a meetup once a month, I have for the last 10 years. And many times I'll get people that come and just literally start talking and I'm the greatest thing since sliced bread. And you have to kind of question, like, why are you the greatest thing since sliced bread? What is it that you're doing? Make sure it's not for their benefit, and then it's for yours. So let's let's listen further. Family members take advantage of other family members because they know that there's a trust factor in there. But again, I don't trust anybody. So prove up what you're telling me.

Successfully done flips with him.

Tatiana Barnett is a realtor and iFlip boot camp graduate. Both she and Amir say after the boot camp they were recruited into iFlip's joint. Participants would have to provide some upfront capital. iFlip would find the property, provide access to the lender, and oversee the renovation. Then iFlip would sell the home for you and take 30% of the total profit.

You don't have to worry about any of this stuff because they have all of these relationships.

To get financing through iFlip's preferred lender, Rommel-Bey told the women his name had to be on their loan.

Being in real estate, it's not something that's unheard of if you don't have a track record of doing, you know, fix and flips with other people.

But Rommel-Bey says the women were told At closing, each woman hired iFlip's preferred real estate attorney, Alex.

See, now that's, that's a big red flag to me.

And I know they do real estate a little bit differently over there. They're what we call the foreclosure state. We're, we're what's called a trustee state here in California. So things are done a little bit differently. Obviously, you've got a little collusion going on between the attorney who's supposed to be Representing both parties at the table, and then and then this person as well. I don't know. Like for here, I if I joint venture with somebody, I I'm probably not on the loan unless the lender requires it. If if if that's if that's the case, I'm also on title to the property as well. So you know what they're doing here is a little bit questionable. At least from the business standpoint that I do here in California.

Ranja to represent them, but Tatiana says Ranja never showed up at her closing.

They didn't know it yet, but in hindsight, this is where they say things went terribly wrong. Buried in the hundreds of pages of documents they signed during closing were 4 sentences in the loan agreement that put them on the hook for Ramo Bey's debts. It was part of a cross-default and collateralization clause that meant if Ramo went delinquent on any of his own loans, The lender would charge what Romo owed to the loans he held with other iFlip participants like Amira and Tatiana.

And Romo—

and I think just looking at that, the 4 lines there, that this, this was definitely, you know, I don't know if you want to call it a Ponzi scheme or what, just, just outright fraud, that he was tying up not only this property but every other property basically as a guarantee That if anything wrong with the other property, that they would charge other people. And that's great if you're the lender in this situation.

That's awesome.

You know, you normally have due recourse on the property that you're buying. But what they did is they tied it up to other properties that this person may own. And I'm talking about the actual mentor, teacher, investor in this case, not the students that were putting up their hard-earned money. So if you, if you're going to go into a contract with somebody, make sure you read the contract. I always like to have independent parties in the transaction. So again, we don't use attorneys out here. We use title companies and escrow companies, and the lender is totally independent and would not necessarily have a clause like this unless Unless somebody spoke up and said, yeah, I, I need you to put this clause in because I've got like 10 other loans and I want to make sure you get paid back, and so I'm going to put these people on the hook for that. So that's fraud from, from, you know, step—

And Ramos had several past-due balances.

The women's loan documents show they were charged thousands in cross-interest fees, all transferred from Ramos' delinquent loans.

This was never about flipping property. This was about taking loans out to pay a debt that didn't belong to us.

The loans then went on to fail. They were never written to succeed. They were predatory loans.

Now lawsuits recently filed by both women say iFlip lured them into a real estate investment Ponzi scheme, and the lender and real estate attorney were in on it.

So instead of you getting the money to pay the contractors and renovate the home, what was happening with it?

We have no idea where the money is.

How much are we talking about here?

I have lost $169,000. I'm sorry.

And we are at risk of losing over $200,000.

Our desire was to elevate the Black community, rebuild and redevelop our neighborhoods.

And there you go. iFlipChicago. He probably spent a lot of money putting that, uh, video together, uh, to make it look good. You know, it's like I tell people, you know, yeah, here's the internet and you can put your presence on the internet as well to make everybody think that you're the greatest thing since sliced bread. But if you don't investigate what you're getting yourself involved with, you may end up like these poor 2 ladies here that are going to lose hundreds of thousands of dollars. And I don't— honestly, I don't ever think that they're going to get anything back. The lender, in this case, you know, they say that the lender was involved, but at the end of the day, that lender is going to foreclose on that property because of nonpayment. So there's a foreclosure process headed down the road there. In Chicago, it takes a lot longer to foreclose on a property than it does here in California. But that, that's where it's headed. And will they ever get any money from this?

I highly doubt that that And the Woodlawn community Ramo and Michelle claimed they wanted to revitalize now has 2 more vacant and decaying homes dotting its landscape.

So this property has been this way since 2022.

Sandra Robinson lives next to the home Mamera was never able to finish renovating.

It's an eyesore. I hope something gets to be done.

It's disgusting that this is 2 years later and we have no answer. We have more questions than answers.

The city says it's We found at least seven iFlip investment properties, including Tatiana's, are currently in foreclosure. In an email, Ramo Bay tells us he and his clients were a victim of predatory lending, and the cross collateralization policy was never disclosed or explained to him at closing. He says he will go after the lender who caused all this damage. Alex Ranja's attorney tells me they will be filing a motion to dismiss the case. Ramo is still holding real estate investment seminars. On Facebook and encouraging church groups to invest. PJ Randhawa, NBC 5, responds.

Of course he's going to continue to advertise his services and, and move forward because not everybody's listening to this video or a news report about what he's doing. So he's going to get— he's going to end up getting more victims here unless, uh, you know, the government steps in and files some sort of charges against him.

And it—

they are federal charges because we're talking about loans And stuff like that. So again, at the end of the day, who knows if these people are ever going to get any money back? I highly, highly doubt that that will ever occur. I had a broker when I first started out, and in his kind of mantra saying to me that basically everybody has. Their hands in your pocket during a real estate transaction. You've got the lender, you've got the title company, you've got escrow company, you've got termite companies, you got everybody else wants a piece of that pie. And if you don't know what you're doing and you're not educated properly, things like this can happen to you. And I hope they don't. And I hope if you see this video, please like, share, subscribe, comment. I'm happy to hear whatever it is that you're going through. If these folks— not that I do anything in Chicago, but if this was California and these folks had come to me, I would have told them early on, you know, cut your losses and move on with somebody else in this transaction. And, you know, don't be piling up these charges that are being piled up. Refinance right away because this was, this was very ugly what was happening. And I'm sorry that they had to go through this, but be careful who you invest with out there.

Thanks for watching the video. Make sure you like and subscribe and share this video so that other people can get informed. We'll see you on the next one.