Gajavelli’s investors were, in fact, highly vulnerable to interest-rate increases over the past year that crushed the business model that they and thousands of others in similar deals across the U.S. had hoped would make them wealthy. For them and a host of small investors —who were expecting a share of rents and a piece of the profit in an eventual sale—it is looking like a looming investment-property disaster.
In April, Gajavelli’s company lost more than 3,000 apartments at four rental complexes taken in foreclosure, one of the biggest commercial real estate blowups since the financial crisis
Source: A Housing Bust Comes for Thousands of Small-Time Investors – WSJ
