Amid the despair of foreclosures, many see a golden opportunity

One firm buying dozens of homes

Real estate investor Christ Stamatos in the vandalized Roxbury apartment building recently bought by his family business. (Globe Staff Photo / Michele McDonald)

George and Christ Stamatos know their newest apartment building in Roxbury needs work. A lot of it. Chunks of plaster have dropped from the ceilings, black mold creeps along walls, and thieves recently ripped out copper plumbing, causing a flood that soaked the floors.

But George, 38, and Christ, 40, saw a bargain beyond the mess. Their family business bought the 4,432-square-foot, three-story building on Homestead Street in October for $240,000, far less than the $405,000 paid by the former owners, who lost it to foreclosure. The brothers found value in the brick fireplaces, stained glass, built-in benches, and crown molding.

The Stamatos family - including their father, his two brothers and their wives, and nine children - plans to renovate and rent the building's four apartments, adding them to a Boston real estate empire that is expanding because of other people's misfortune. Through Dec. 5, the family has bought 36 bank-owned apartments, at an average price of $69,000 a unit, according to data from The Warren Group, which tracks real estate transactions. And it is closing on another seven bank-owned apartments this month. No one has bought more foreclosed homes in Boston this year.

"I try to educate a lot of people here to buy properties now," said Christ Stamatos, acquisition and development manager for Stamatos Property Management Corp. and owner of Century 21 Pondside Reality. "This is the time to buy. Why wait, when the numbers make sense now?"

The Stamatoses are at the forefront of a growing wave of investors and homebuyers who have purchased 482 foreclosed properties in Boston through Dec. 5, more than six times the number bought in all 2007. Many of the foreclosed properties were deeply discounted. Sales of condos started at $23,000, and about 28 percent sold for $100,000 or less. In all, Stamatos Property Management owns and rents about 300 apartments in Boston, according to Christ Stamatos.

While housing advocates and city officials would prefer that individual buyers acquire distressed properties, because they are more likely to live in them long-term, they concede that investors like the Stamatos family can help to reduce blight. But advocates hope investors searching for bargains are also committed to the city's neighborhoods.

"There are definitely people out there taking advantage of this condition," said William C. Apgar Jr., a senior scholar at the Joint Center for Housing Studies at Harvard University. "The proof will be in the pudding. Are they maintaining them well or are they are letting them slip? Time will tell."

Boston's top housing official said the Stamatos family has a "moderate management style," meaning that it is neither among the best nor the worst of the city's property managers.

"I wouldn't say [Christ Stamatos] is a terrible landlord, but the family is a little bit less focused on getting things back on line than we would like," said Evelyn Friedman, the city's chief of housing and director of the Department of Neighborhood Development, referring to complaints that the family is slow to improve some of its properties.

For instance, residents said the Stamatoses have not kept up or renovated a building on Centre Street in Jamaica Plain that has been vacant since a 2006 fire. The family also owns and runs The Breezeway Bar and Grill, a Blue Hill Avenue bar that has been the scene of several fights, according to city officials.

Christ Stamatos said that he expects to start reconstruction on the Centre Street property at the beginning of the year and that efforts were stalled by insurance claims and the city permitting process.

Regarding the bar, he said, fights are part of the business. "We've had no shootings or stabbings," Stamatos said.

Stamatos's father, James, along with two brothers, came to the United States from Greece in the 1960s, starting with almost nothing. Slowly, the brothers assembled their fortune, working at first in kitchens and as construction workers. They bought their first multifamily home in 1972, and all their children were born in the United States. The family made headlines in 1995 when James Stamatos staggered out of his Jamaica Plain grocery store, a hammer in hand, after fending off an attack by robbers. He almost died, and the family decided to close the store.

The family has been buying property for four decades, but escalated its purchases this year, attracted by falling values in the real estate market. Christ Stamatos said he expects prices to continue to slide for another 12 to 18 months.

Stamatos said that his family does good-quality work - it runs its own construction company - and that neighbors should be grateful it buys properties that have been abandoned, left to vandals and vagrants.

The day the Stamatoses closed on the Homestead Street property, family members found the floors flooded and water dripping from the ceiling after thieves ripped out plumbing and toilet fixtures.

"We buy in areas some people would not buy in, and we make these properties look 10 times better than they did," Stamatos said. "We provide [affordable] housing that was not available there."

While the Stamatoses top the list of buyers of bank-owned properties this year, other investors are also jumping into the market. Boston developer Stephen Chaletzky bought 12 apartments of bank-owned city property to add to his rental stock. He renovates and deleads the apartments before putting them on the market.

Chaletzky, owner of Hearthstone Corp. in South Boston, said he wished that more individuals would buy bank-owned properties to benefit struggling communities. But the bureaucratic process can be agonizingly long, he said. For instance, Chaletzky said, he signed a deal on a property in July that didn't close until November.

"The average person is going to lose their [mortgage] rate lock," he said. "The anxiety alone would drive the average person crazy."

George Stamatos, Christ's brother and the family's property manager, recently toured the Homestead Street house, admiring the intricate woodwork visible behind peeling paint.

Stamatos said he wants to return the house to its past glory. The family plans to invest some $80,000 to restore wood, renovate kitchens and bathrooms, and repair the slate roof.

"If you are looking for a quality tenant, you need to do quality work," said Stamatos. "This obviously needs some TLC here."

Jenifer McKim can be reached at jmckim@globe.com.