David Schweikert would have you believe that buying large numbers of foreclosed homes, kicking out the occupants and turning them into rentals, is good for neighborhoods. However, his cash-fueled "vulture" investor scheme hurts neighborhoods and hinders economic recovery. Schweikert's vulture fund is designed to turn a quick buck by aggressively outflanking and outbidding families that are bank-financed and hoping to occupy the home and improve the property. Schweikert's company faces thousands of dollars in fines for repeatedly being cited for neglecting his properties. And law enforcement experts say that the large numbers of rental homes in the Valley make their jobs more difficult because criminal human smugglers and drug cartels frequently use rentals as "drop houses."

THE FACTS ABOUT 'VULTURES'

• According to The Arizona Republic, city leaders would rather have homeowners purchase foreclosed homes than vulture speculators, who will only turn around and rent them out. "In the long run, the trend could shake the stability of Valley neighborhoods and hurt cities' efforts to promote homeownership, community leaders warn." [Arizona Republic, Aug. 30, 2009]
• Schweikert's company, Swartz and Brough, has been cited multiple times by Phoenix police for violating the "Neighborhood Preservation Ordinance," which is designed to help neighborhoods fight blight and remain safe, secure and attractive. His company now faces thousands of dollars in fines for code violations that include overgrown grass, debris and graffiti. [City of Phoenix Notices of Ordinance Violations]
• Another Arizona Republic article showed that a large number of rental properties in one neighborhood can "lead to blight." [Arizona Republic, October 27, 2005]
• A large number of rentals in one neighborhood also gives smugglers more choices for drop houses and "Investigators say they have seen an increasing connection between drop houses and foreclosures in the past year." [Arizona Republic, Aug. 31, 2008]
  • Experts say many potential buyers can't compete with investors, bacause they are able to make higher down payments than most first-time homebuyers. [Arizona Republic, Aug. 30, 2009] This has become such a concern for realtors that they recently held a large "No investors allowed" home auction in Phoenix. [KPNX TV 12, Aug. 6, 2010]
  • Aggressive speculators were a contributing factor to the housing bubble that ultimately burst and exacerbated Arizona's economic downturn. Now they are back, aggressively outbidding ordinary folks looking to be homeowners through a scheme that will artificially inflate prices once the housing market returns. [Arizona Republic, March 7, 2010], [Arizona Republic, Oct. 24, 2004]