Monday, November 21, 2005

Foreclosure 'Veteran' Moves Back Into Houston

This report from Houstin found an old hand is back in action. "Maxwell Drever is back in Houston buying apartment complexes out of foreclosure with plans to flip the properties for profit. The veteran San Francisco real estate broker was an active dealer in distressed properties during the 1990s before selling his portfolio and departing the market eight years ago."

"Once the city's largest landlord, Drever Partners Inc. owned 79 apartment communities with 18,000 units and employed 700 people. Now the 63-year-old Drever has returned for a repeat performance. Two funds controlled by Drever and Omaha-based Magnum Capital have paid $29.2 million to acquire five foreclosed suburban multifamily projects in Texas, three in Houston and two in Dallas."

"The market for foreclosures isn't exactly thriving, says Richard Zigler of a Houston real estate research firm. 'We haven't seen that many properties in foreclosure recently,' says Zigler. Overall, Zigler says, Class C apartments slid to an 86.45 percent occupancy rate during the second quarter of 2005. 'In most markets, anything below 94 percent to 95 percent is pretty bad,' he says."

"The latest five Texas properties were acquired by two funds. Drever contributed 80 percent. Magnum Capital chipped in 20 percent after tracking the five apartment properties for six months from default to foreclosure. The twin funds bought the 1,038-unit portfolio for $28,131 per unit from Dallas-based GMAC Commercial Mortgage Corp., which had foreclosed on the properties in January."

"Like their predecessors, the newly acquired properties will eventually hit the selling block. Says Myra Rega: 'How quickly, we never know. We look at market conditions and when the time is right to sell, we will.'"


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