Interest expense topped $1.47 million as the Beverly Hills-based microcap’s mortgage debt climbed past $23 million across its 34-property Los Angeles portfolio.

April 08, 2026

Hubilu Venture Corporation, a Delaware-incorporated real estate consulting and acquisition company trading on the OTC Pink under the ticker HBUV, reported its fiscal year 2025 results in its annual report filed with the Securities and Exchange Commission on April 8, 2026. The company generated $2.2 million in rental revenue from its portfolio of 34 residential properties in the Los Angeles area, but posted a net loss of $551,442 — nearly three times its $186,237 loss in fiscal 2024.

Four New Acquisitions

The company acquired four new properties during 2025, all through its subsidiary Elata Investments, LLC, bringing its total portfolio to 34 properties held across nine Wyoming-incorporated limited liability companies. The acquisitions included 1650 S. Rimpau Boulevard for $650,000 in May, 1434 W. 22nd Street for $640,000 in June, 417 W. 52nd Place for $525,000 in August, and 1460 Exposition Boulevard for $520,000 in September. All four were vacant at purchase. Total property acquisitions for the year amounted to $2.335 million, with an additional $419,149 in capital improvements across the portfolio.

Revenue and Operating Performance

Rental revenue dipped slightly to $2,203,976 from $2,232,412 in 2024, a decline the company attributed to multiple tenants vacating during the year. The company generated $930,955 in net operating income — still a healthy margin, though down from $1,123,115 the prior year.

The widening net loss was driven primarily by a sharp increase in interest expense, which rose to $1,476,460 from $1,209,530, reflecting the company’s growing debt load. Repairs and maintenance costs jumped 61.5 percent to $231,422, property taxes rose 18.6 percent to $270,614, and depreciation increased 26.4 percent to $271,681 as the portfolio expanded.

Debt and Refinancing Activity

Total mortgages payable, net of debt discounts, stood at approximately $22.5 million as of December 31, 2025, up from $20.2 million a year earlier. Related-party mortgages added another $1,017,094, up from $599,594, as Jacaranda3 Investments, Inc. — an entity controlled by CEO David Behrend — provided second-position financing for two of the new acquisitions.

The company completed five mortgage refinancings during 2025, consolidating first and second notes on several properties into new 30-year loans with lenders including Investor Mortgage Finance and LendingOne. Interest rates on the refinanced loans ranged from 6.35 to 7.45 percent. The refinancings resulted in a $26,716 loss on early extinguishment of debt, an improvement from $73,802 in 2024.

Balance Sheet and Going Concern

Total assets grew to $23.5 million from $20.9 million, with net real estate holdings of $23.4 million. However, the company had just $52,071 in cash, negative working capital of $2.4 million, and an accumulated deficit of $2,858,582. Total liabilities reached $25.3 million, resulting in a stockholders’ deficit of $1,777,646.

The company’s auditors, M&K CPAS, PLLC, issued a clean opinion but flagged substantial doubt about Hubilu’s ability to continue as a going concern, citing recurring operating losses, negative working capital, and the possibility that cash on hand may not sustain operations.

Business Strategy and Market Context

Hubilu’s model focuses on acquiring residential properties near the University of Southern California campus and in surrounding Los Angeles neighborhoods, targeting student housing and corporate rental demand. The company noted that average monthly rents in the USC area have risen from approximately $750 in 2005 to $2,200 in 2025, while USC enrollment has grown from 32,000 to 46,000 over the same period. Management has also expressed interest in expanding into business acquisitions in sectors including property management, clean technology, healthcare, and AI.

Ownership, Leadership, and Internal Controls

Behrend controls approximately 95.3 percent of outstanding common stock through Jacaranda3 Investments, Inc. As of April 7, 2026, there were 26,237,125 shares outstanding. The company also has 520,400 shares of Series 1 convertible preferred stock outstanding, with $231,449 in accrued but undeclared dividends at year-end.

Behrend serves as chairman, president, CEO, CFO, and sole director. He received no compensation in 2025 or 2024. Tracy Black-Van Wier serves as secretary and vice president of investor relations and received $68,975 in salary during 2025. The company’s estimated monthly burn rate is approximately $30,000.

Management identified four material weaknesses in internal controls: insufficient segregation of duties, journal entries identified only by external auditors, no formal related-party transaction approval process, and insufficient technical accounting expertise among staff.

Subsequent Events

After year-end, the company completed three additional mortgage refinancings in January and March 2026 for properties on Exposition Boulevard, 52nd Place, and South Hill Street, securing new 30-year loans at rates between 6.0 and 6.115 percent.