While scrolling through a Facebook group in 2017, a Swedish woman named Lena Jalke-Fehrm learned about a real estate opportunity in Cleveland. 

She didn’t know much about the city but recognized it from the sitcom “Hot in Cleveland.” Online, a company called Solid Capital Group said Swedes could buy American houses and generate “passiv inkomst:” passive income, a reliable stream of rent payments from halfway around the world. 

Jalke-Fehrm was interested. Later, she met with two women from the company in her kitchen. It was a “lovely conversation,” she said. She was sold.

She and her husband bought five Cleveland houses for a total of $271,500, records show. Jalke-Fehrm, who uses a wheelchair, figured the investment would supplement her disability income from the Swedish government while doing a good deed: providing housing in a struggling city. 

“I thought it was a win-win,” she said.

Solid Capital Group marketed itself as “the link between dream and reality.” Nearly two years after buying her first house, Jalke-Fehrm felt that she wasn’t getting answers from the property management overseas. So she visited Cleveland and woke up from the dream. 

In one house, paint peeled off of the bathtub and shower walls, photos dated around that time show. In another, the plaster had fallen away from part of the ceiling, revealing a snaggle of broken wooden boards. Outside, the back wall of the garage had collapsed. Ivy creeped over debris within.

A tenant confronted her in Cleveland, she said. A broken pipe had leaked sewage into the basement, Jalke-Fehrm said she was told. There were mice in the couch and cockroaches in the kitchen, she said the tenant told her. The tenant lived in the upstairs unit with her husband. They didn’t pay their rent. Jalke-Fehrm didn’t blame them. 

“After seeing the houses, I can understand why people didn’t want to pay rent,” she said. 

Jalke-Fehrm was part of a Swedish real estate venture that involved at least 80 investors and 100 houses purchased between 2016 and 2019, a Signal Cleveland review of property records, business filings and emails found. On average, the Swedish investors sold their houses within a few years for less than they originally paid, transaction records show.

Jalke-Fehrm’s story and that of another Swedish investor who spoke with Signal Cleveland, along with property records and translated court documents, offer an inside view of something that Clevelanders rarely glimpse: the long-distance business deals behind the city’s investor-owned homes.

Several investors, including Jalke-Fehrm, now say that Solid Capital Group misled them with promises of renovated homes and stable rental income. Instead, the investors alleged, a revolving door of property managers couldn’t maintain the houses. Those investors went to court in Sweden to recoup their losses.

“A significant proportion of the houses,” the suit alleged, “had no tenants, were unrenovated and left completely unattended. The consequence of this was that the houses were affected by vandalism, theft, pollution and unmanaged garbage, which led to several property owners having to pay fines.”

The investors didn’t win money in the courts. Solid Capital Group was bankrupt, so the effort to get money from the company was fruitless. A separate suit against Solid’s owner and CEO, Kajsa Sihlén, settled with no finding of liability and each side paying its own legal fees. 

Sihlén declined to speak with Signal Cleveland, writing in an email that she wanted to put the case behind her. 

Andreas Johansson, the now-39-year-old U.S.-based investor who sold the houses to Solid Capital Group’s clients, said the investors should have known the risks of chasing high real estate returns. He was not a party to the Swedish lawsuits.  

“While it is not a popular opinion, the investors themselves will probably have to accept most of the blame – which is a shame, as they all seemed like nice and sincere people,” Johansson wrote to Signal Cleveland in an email. 

Word of the failed U.S. venture reached Swedish newspaper Svenska Dagbladet, which reported in partnership with Signal Cleveland. The Swedish saga is just one episode in Cleveland’s ongoing struggle with landlords who invest in the city from afar.  

‘Window of opportunity in Cleveland’ draws Swedish investors

Maria Areskoug’s path to becoming a Cleveland investor started with a search for balance. A school teacher in Gothenburg, in western Sweden, she was drained from her years-long battle with breast cancer.

In 2017, she found her way to Balansekonomi, a company led by a Swedish television presenter that offered lectures and classes on financial independence and good living. At one class, Areskoug said, she met a man who put her in touch with a Swedish businesswoman named Kajsa Sihlén. 

Sihlén’s company, Solid Capital Group, was seeking investors to buy houses in Cleveland and Detroit. Cleveland was on the upswing after suffering economic disaster, Areskoug said she was told. 

“There’s a window of opportunity in Cleveland now, because they have gone through hell,” Areskoug said, summarizing the pitch. “The economy went down, everybody was out of work, and in the States, the bank takes the houses when they can’t pay.” 

According to Areskoug, the model was this: Solid Capital Group finds foreclosures in Cleveland, gives them a new interior and rents them out. All investors have to do is buy the houses and reap the rental income.

“They said that we were buying renovated houses,” Areskoug said. 

From a small venture to one ‘beyond our wildest imagination’ 

Solid Capital Group advertised itself to people looking for freedom from their daily routines. In a YouTube video, Sihlén stood in the center of an auditorium, speaking through a headset microphone as three rows of people – mostly women – listened. On a slide projected above her in Swedish were the words, “Take leadership over your life and surroundings.”

That leadership took the form of buying real estate. “High and regular returns from day one,” an archived version of Solid’s website from 2017 read. “Real estate is something that anyone can invest in.”

The company acted as a matchmaker. It linked Swedes with houses that belonged to Johansson, the U.S.-based investor, through his company, SBAR Holdings LLC. He sold 118 homes to Solid’s investors, he said. Most were in Cleveland, but he said others were in Detroit and St. Louis. 

A local property manager named Bradley Kessler worked with Johansson and Solid Capital Group in Cleveland.

Kessler recorded videos with Sihlén talking up the real estate business. In one, their voices echoed through what sounded to be an empty house as Kessler explained how he searched out properties for Solid Capital Group clients, rehabilitated them and placed tenants in them. 

“We’ve gone from a small operation to something that’s beyond our wildest imagination,” Kessler said in the video.

The workload grew, too. Kessler told Signal Cleveland that he managed 40 to 60 Solid properties. His address became the go-to mailbox for many Swedish investors’ new limited liability companies and the destination for bills and housing code violations. 

Eventually, Kessler quit working for Solid, he said.

“Literally, it just became too much,” he told Signal Cleveland. “I had no life for two years. None.” 

Investor lawsuit questions home inspections

The Swedish investors alleged in their lawsuit that Solid’s inspection reports did not accurately represent the condition of the houses. Properties were not renovated as expected, the suit claimed. As for the neighborhoods, Solid Capital Group referred to them as “finer ghettos,” according to the investor lawsuit. 

Jalke-Fehrm, the investor who bought five houses, told Signal Cleveland that Solid Capital Group gave her access to an online folder full of one-page sheets that included an exterior photo, estimated costs and a projected return on investment. Jalke-Fehrm said she asked for interior photos but never received them. 

She paid $295 each for inspection reports, she said. Those reports were just a few pages long. They covered the basics: the status of the roof, heat, plumbing and wiring. Jalke-Fehrm said Solid Capital Group encouraged investors to move fast to claim their houses. 

“They said there’s so many customers and so many people wanting to invest, so you had to be quick,” she said. 

SBAR Holdings’ purchase contract with Jalke-Fehrm underscored the sense of urgency. One section of the contract ended with a sentence in all capital letters: “TIME IS OF THE ESSENCE.”

Johansson, however, said the houses were safe and ready to be rented. Typically, his company repaired properties to the standard required by the federal government for housing voucher subsidies, commonly known as Section 8, he told Signal Cleveland in an interview. Johansson said he prefers Section 8 business because of its stable rental payments and higher inspection standards. 

But Solid Capital Group wanted “a cheaper product,” he said. 

“The last thing we wanted to do was some kind of slumlording, where you just put some paint in there and call it ready. We didn’t want to do that,” Johansson said. “But obviously the budget was pretty limited.” 

Johansson shared a general breakdown of his estimated costs. According to his figures, he spent almost $1.7 million rehabilitating the 118 properties he sold to Solid’s investors.

Swedish investors should have gotten more comprehensive inspections, Johansson said. In the end, investors signed contracts with SBAR Holdings accepting the houses “as is.” 

“If they had any concerns, they probably should have addressed that before they closed on a property, right?” Johansson said.

Inspection reports Jalke-Fehrm shared with Signal Cleveland list SBAR Holdings, Johansson’s company, as the customer. One report was signed by a Christian Cortez, and his company was listed as Cortez Home Inspections. Signal Cleveland could not locate a property inspector by that name. Cortez’s name also appears on an eviction notice sent by SBAR Holdings on behalf of a Swedish investor.

Johansson told Signal Cleveland that his company did not order the inspection reports, and that he did not recall the name Christian Cortez. Kessler, the property manager, said Cortez did work for SBAR at some point.

As this story was being reported, Johansson made a $320 donation to Signal Cleveland. Donations do not influence Signal Cleveland’s editorial decisions. Find a list of donors and our editorial transparency policies. The donation is being returned.

Johansson discussed the Solid Capital Group deal in multiple phone interviews with Signal Cleveland. He later sent a lengthy email. In it, he wrote that Solid’s property managers fell short, and reiterated that the Swedish investors bore responsibility for their overseas bets. 

A Swedish visit to Cleveland 

Areskoug, the teacher, found a Solid Capital Group house that interested her. It was on Dorver Avenue in Cleveland’s Slavic Village neighborhood. 

She wanted to see the property before she bought it. She booked a trip to Cleveland and met up with a friend who lived in Ohio, she said. She had planned to ring the doorbell and introduce herself to the tenants, bearing a gift of Swedish fika – cookies and coffee. 

Sihlén warned against it, though, Areskoug said. It wasn’t safe to knock on strange Americans’ doors, Areskoug said she was told. In 2018, right around the Fourth of July, she settled for a drive-by viewing of the houses. 

Areskoug took notes. “Shot holes next door,” she wrote of one house. Of another: “Roof broken, door missing part of porch missing, risk.” 

The Dorver house had points to recommend it. “Small area,” she wrote. “Highway close by…public transportation…close to nice waterfall” – Mill Creek Falls, the park just up the street.

Before buying the house, she learned that the house belonged to the man she had met in class. He had owned it for about a year. Despite misgivings, Areskoug took the deal. For $57,000, plus fees and closing costs, she became a landlord in a city nearly 4,000 miles from her Gothenburg home. (This story has been updated to reflect the correct distance in miles, not kilometers.)

There was something important about the Dorver house’s history that Areskoug said she didn’t know at the time. The prior year, in September 2017, Cleveland police had raided the property as part of a drug investigation. Inside, officers found guns and fentanyl. A man who lived there was later convicted of drug trafficking. 

A Cleveland Housing Court violation reaches Sweden

About six months after Areskoug bought the house on Dorver Avenue, a city health inspector found garbage alongside the garage and cited her for it. 

It was months before the news reached Areskoug. A letter from Cleveland Housing Court dated Aug. 12, 2019, arrived in Sweden. The letter said she had failed to appear at multiple court hearings. The judge had found her company in contempt of court and had issued a $1,000-a-day fine.

“‘Why am I not getting these things?’” she recalled saying. “‘Why aren’t they coming to me?’” 

Areskoug paid a $540 fine online to close the code violation. But a second violation – for an expired rental registration – remains unresolved, court records show. 

Just before the COVID-19 pandemic, Areskoug got the house off her hands. In February 2020, 18 months after she bought the house, she sold it for $5,500. She lost 460,567 Swedish kronor in Cleveland, according to her lawsuit, the equivalent of around $43,800 today.

What Areskoug thought would be a good deal turned out to be, financially speaking, a “leaking hole.” 

“Now in hindsight, I see that I was very naive and stupid and trusting,” she said. 

‘A lot of people wanted answers’ about property issues

By September 2019, the Swedes’ investments were in trouble. Tenants were threatening to withhold rent, Solid Capital Group’s property manager, IDT Venture, told investors in an email. They listed a litany of problems.

Hot water tanks, furnaces, pipes and electrical wires were in shoddy condition, the email said. IDT Venture was Solid’s fourth property manager and faced a large workload across more than 100 houses, the company said.

When IDT Venture took on the Swedish properties, the email said, “we instantly noticed the distressed conditions of each home including major mechanical issues that had not been addressed.” 

In an email to investors, Solid Capital Group representatives cast the blame back on IDT Venture.

“They have been bad at communicating – both with us, with you homeowners and with their tenants,” Solid’s email read. “They have also been slow in a number of processes – execution of evictions, production of estimates, ongoing maintenance and appointment of new tenants.”

Kessler, who worked early on as a property manager for the Swedish houses, said other managers weren’t up to the task. Kessler said he was aware that the investments were not going well.

“Most of these property managers didn’t do jack shit,” Kessler said. “If the property isn’t going to be managed, if it doesn’t have a tenant in there, if the tenant isn’t taking care of it, or the house is vacant, bad things are going to happen.” 

Kessler flew to Stockholm to meet with investors at the end of October. They were unhappy. 

“A lot of people wanted answers,” Kessler said. 

One question that investors wanted answered, according to Kessler, was this: Who is to blame for this troubled venture in Cleveland?

Kessler shared a story. Once, he had invested in an Alabama apartment building. He quickly lost his money. 

“Then it hit me,” he said. “I said, ‘Why would I buy something in another state that I can’t touch, taste or feel myself? I can’t manage it.’”

A fiery end to the Cleveland investments

The following spring, in 2020, Lena Jalke-Fehrm decided to sell her five houses. 

She had hired a new property manager, who called her in May 2020 with bad news. Her house on East 61st Street had caught fire two months earlier. 

The house was vacant at the time of the blaze. Firefighters listed the cause as “under investigation,” and the case remains under review by the city prosecutor. Jalke-Fehrm said that she and her insurance company surmised that the fire had been started by a squatter trying to keep warm. 

A month later, Jalke-Fehrm received a tearful video call from her property manager, she said. There had been another fire, this time at her house at East 71st Street. The cause was an electrical failure, the city fire report said. The tenants, including children, escaped the house without injury. 

Jalke-Fehrm transferred her companies to her property manager. Now, all that is left of the two houses that burned is a pair of vacant lots. They are accumulating unpaid taxes – two of many dead plots of land across the city. (Clarification: This story was updated to reflect that the two vacant lots are accumulating unpaid taxes, but not housing court fines.)

By 2023, Solid Capital Group was finished. The company had applied for liquidation in Sweden. In court, the company did not mount a defense, a court judgment said. But there was no money for the investors to win. 

A separate lawsuit against Sihlén hit a wall. As Jalke-Fehrm recalled, she and her fellow investors could not establish that the houses were in bad shape on the day of purchase. She had photos of her investments falling apart in 2019 – but that was two years later. What did the houses look like on Day One? 

Despite these disappointments, Jalke-Fehrm still believes in the dream that she had grasped at years before: The “win-win” of providing rental units to tenants thousands of miles away in the United States. 

“I also won’t shame myself for being a victim, because I still think it was a really good business idea,” she said. “If it had worked, it would have been wonderful.”