A plugged-in reader turns up two more Muhawieh comps of yore headed for the courthouse steps: 1036 Jackson and 619 Diamond. Additional background (such as a lawsuit from 619 Diamond’s neighbor) and discussion on the 1130 Cole thread.
UPDATE: From a plugged-in legal reader:

This guy is facing a lot of lawsuits, including some brought by his own family (and some in which family members are included as co-defendants). I count 21 lawsuits, almost all filed within the last year….And I’ve learned one easy way to get rid of a protected tenant — just sign a contract agreeing to pay him/her ridiculously high sums to move out, then don’t pay!

An Ex-Comp Now Contractors Special Closes Escrow On Cole (1130) [SocketSite]

Comments from Plugged-In Readers

  1. Posted by anonn

    What is the fascination with calling utterly gutted and/or neighbor undermining properties, “former comps” or “comps of yore” ?

  2. Posted by FAA

    Fascination? I don’t see it. They were comps when they last closed. Simple fact.

  3. Posted by anonn

    Several things. Isn’t “comp” by definition current? Most would say so. What good is a two or three year old comp? The word doesn’t even apply. The other thing is the nature of the beast. They weren’t gutted wrecks when they were bought. They became something else, so again, why “comp” ? What they are now are current comps for total fixer, and encumbered total fixers at that. It’s clear what the editor is doing. He feels as if he’s onto something provocative-bearish-cynical, but it is a stretch IMO.

  4. Posted by Jimmy (No Longer Bitter)

    I think he means that they were comps for other properties listed at the time of their last sale 2 or 3 years ago. Thereby serving to justify inflated prices, etc. etc….
    although the argument could be made that the buyers did, by spending no doubt substantial sums of money on permitting and demolition, convert these properties into something even less desireable than they were 3 years ago.

  5. Posted by anonn

    There is no argument whatseover on your second point. You’re talking about a fixer versus a gutted shell and a lawsuit that’s all yours if the price is right. Also, from what I’ve seen a lot of this guy’s buys weren’t even on the open market in the first place.

  6. Posted by San FronziScheme

    Things are pretty clear. A property was bought 2 years ago for a lot of money. It was used as a comp at the time. Now it is gutted and useless as a comp.
    The point behind all of this is that the same guy who completely messed up the redo is the same guy who overpaid for the property. A case of bad judgment from A to Z that was probably used as a comp at the time. I can imagine the talk on the street: this “professional” just paid x dollars for a place that needs a complete redo. This means that my place in good shape must be worth x+y dollars! That’s one house, one street, but I think there are many many less-in-your-face train wrecks all around town.
    It happened that the guy in question was a delusional bubble-topper who got trapped in his own tangled web before he could make a buck or even repay the numerous investors. A guy spending a lot of other people’s money wasting years of savings in a black hole. Sad story all around. A house is gone. Money is gone. Neighbor’s illusions are crushed.

  7. Posted by Michael

    Muhawieh was running around town bidding up the price of dozens of properties which buyers, realtors and appraisers used as comps to justify even higher prices but were based on a speculators poor judgement.

  8. Posted by anonn

    Neighbor’s illusions are crushed
    Why? Other than safely saying that they’re angry about their foundations getting undermined?

  9. Posted by anonn

    Muhawieh was running around town bidding up the price of dozens of properties which buyers, realtors and appraisers used as comps to justify even higher prices but were based on a speculators poor judgement
    I’ve gone back and looked at a number of these sales. In many instances I don’t think that was the case, as they were off market buys likely only shopped to select contractors. Pretty sure 619 Diamond falls into that category. But he did lose track of the need to make money on the buy side of the equation, that is for sure.

  10. Posted by Trip

    Man, just did a quick check through some court records. This guy is facing a lot of lawsuits, including some brought by his own family (and some in which family members are included as co-defendants). I count 21 lawsuits, almost all filed within the last year. Good for his lawyer (I hope he got a very big retainer because I suspect it will be difficult to collect unpaid fees).
    Reading through the complaints is quite a ride. This guy was good at getting people to toss money at him. And I’ve learned one easy way to get rid of a protected tenant — just sign a contract agreeing to pay him/her ridiculously high sums to move out, then don’t pay!

  11. Posted by San FronziScheme

    Yes illusions are crushed when what you assumed was a market price 2 years ago was just a bubble-topper overpaying for a property.
    I have a retired lady friend in NV who’s considering her cute little vic as her retirement plan. Seeing places all around climbing from the 400s mid-90s to 1.3M+ in 2007 for the same kind of house gave her the illusion she has become a millionaire. Her place needs some work but a similar place close by sold for around 1.5M in 2007. 2 years ago she was all “prices will never come down here”. Now the prices are correcting fast and she is at a loss as to why this is happening. Ever higher prices were imprinted in the mindsets. It was a given. Nothing is ever a given. The market works for you until it doesn’t.
    She’ll still be OK because she has no debt and has been a thrifty busy saver all her life. But people who got recently leveraged into a home hoping to accumulate 100Ks over a few years just in time for retirement are now left with less equity than when they started. They thought they would build retirement with other people’s money and ended up being the ones paying for the big Ponzi. Whocoodanode?

  12. Posted by FAA

    Anonn, comps are not always current–they are relative to time of sale. So, sales in previous years would be “previous comps”, or in other words “former comps”, or maybe if you dig florid prose “comps of yore”.
    How would you refer to comps in the past tense?

  13. Posted by rabbits

    619 Diamond was bought for $1.2 million, but only $780K was financed… so $420K is in the “first loss” position, and from what we know of this guy that money was likely borrowed from relatives. Thank the lord that this guy is not in my gene pool.

  14. Posted by anonn

    “Comp” versus “past sale” ? I don’t know. Call it what you want I guess. Say it in the head and the lede if you want. No editorail intent is perceived any longer. You guys changed my mind. 🙂 They were off market tho, know that.

  15. Posted by anon

    “How would you refer to comps in the past tense?”
    decomposed.

  16. Posted by San FronziScheme

    1 – They were off market tho, know that.
    Proof?
    2 – Nice time-wasting exchange. Deny the obvious. Deny everything. Deny always. Something will always stick just like the idiots shouting their party lines at the town hall meetings.

  17. Posted by anonn

    I mentioned that I looked at them. I mentioned 619 Diamond in fact is one. Believe me if you want. I’m not circling one of your unearned, from a standpoint of knowledge, synopsis drains today tho.

  18. Posted by Kathleen

    These demo-ed construction projects
    should be “comps of gore”

  19. Posted by max.diez

    I read through the many comments on this blog and as a avid reader of Socketsite I have always appreciated the honesty of this forum. That said I wanted to readers to know the truth about Maher Muhawieh. I have been his close friend since 2001 and I can vouch for the kind of person he is.
    Back in 2007, my wife and I got behind on a first and second loan that we owed on an investment property. Maher let us borrow the money to save that property. Without him, we would have surely had to foreclose on that investment. I realize that times have changed, but knowing the kind of person that he is and where he came from I firmly believe he will come out of this stronger than he was before.
    I know many of you have your own opinions of him, but take it from me. He is a good guy. He did not need to help me back in 2007, but he did it anyway.
    If you have questions you can contact me directly @ re-syndicate.com

  20. Posted by wanker

    See – Maher has shown all of us socketsite clowns how to “man up” and “act like men”.
    Take that, renters!

  21. Posted by ex SF-er

    Max.diez brings up a relatively good point that no person is truly good or truly evil (except for Hitler, Chris Daly, Miley Cyrus, and that one traffic cop with the red hair down on Leavenworth… but I’m not sure any of those are “people”).
    on a more serious note, this story boils down to:
    greed. (everybody)
    stupidity (the bankers and Muhawieh)
    credit bubble.
    any cursory review of this man’s finances would have revealed that he was riding the credit bubble. Clearly he convinced himself and others that he was some sort of RE mogul (yeah… him and 1 million other dorks). but really how hard was it to do what he did? not really hard.
    as always, most of what he has done appears to be legal, although here and there it looks like he “stretched” the law a bit.
    regardless, we’ll hear more stories like this as the bubble unwinds.
    By the way: the credit bubble made LOTS of idiots look smart. Like many hedgies, most bankers, most of the Private Equity and venture capital dorks.
    Heck, the bubble made me look pretty smart too because everything I invested in rocketed up in value over the bubble years.
    as the bubble unwinds people are finding out how smart they really are.
    ==
    lastly, I’m still not sure that we would call all of his investors “family” in our culture. we’d use the word “community”. His “family” is up to 10’s of thousands of people, basically the entire Christian-Palestinian community from Ramallah.
    it is common for idiots with a dream to exploit their community to make personal riches. He likely didn’t intend for his ineptitude to harm his community, and he probably honestly thought that he was “da man”.
    but his current actions don’t seem to be 100% ethical, although most seem legal.
    not mentioned in the stories I’ve seen:
    1) when he ruthlessly defaults do his investors (his family/community) get wiped out or has he tried to make them whole?
    2) how much of a salary did he pull over those years. how many ‘things’ does he have. (house, car, yaught, etc)? is he selling assets to make his family whole?
    if not, he just exploited them.

  22. Posted by anonn

    on a more serious note, this story boils down to:
    greed. (everybody)
    stupidity (the bankers and Muhawieh)
    credit bubble

    But it doesn’t boil down to that at all. The guy had access to a vast private equity pool like few others. I should also say that Malawieh made a lot of them a lot of money for years. That part of the story has been left out.
    You make a synopsis of sorts, yet finish with open ended questions? Why? Why not simply ask questions?

  23. Posted by San FronziScheme

    Had the bubble lasted 2 more years he’d be praised as a visionary genius and nobody would throw him to the lions today. High risks, high rewards. He’s just way too late in the game. Tough luck for his co-investors who lost their savings.

  24. Posted by EBGuy

    The guy had access to a vast private equity pool like few others.
    So did Casey Serin — a global equity pool. Interesting, though, the scale which Muhawieh could operate at due to “personal” trust relationships (versus the impersonal global financial system [aka MBS foodchain]). I guess I’d rather piss off a small town in Norway, though, than a couple hundred of my relatives…

  25. Posted by chuckie

    IMO it was a classic Ponzi. “Family” writes a check, is promised a high rate of return, money from later “family” is used to pay off earlier “family” and at some point the scheme collapses. Later “family” is left holding the bag.
    “RE investing” just provides a plausible story and a patina of legitimacy.

  26. Posted by anonn

    OK, Casey Serin and Maher Malawieh are the exact same. You guys know what really went down. Totally awesome. Thanks for sharing.

  27. Posted by EBGuy

    Anonn, FWIW, I don’t agree with chuckie, and, as always, we will have to agree to disagree regarding speculators. Steady growth is much better for all of us than the bubblenomics pursued by people like Muhawieh. Tradesmen (and contractors) are going without work (or stiffed for the work that they have already done). Thankfully, his properties will be hitting the market soon at reduced prices to provide opportunities for those who can add real value. I counted over 300 recorded filings for Muhawieh in 2009 alone. Definitely a story there, but the SF Recorder’s site does not lend itself to an easy narrative as it takes a bit of work to link records to a specific property…

  28. Posted by chuckie

    Casey’s business model was bank fraud in collusion with real estate professionals and mortgage brokers.

  29. Posted by Justiceforall

    Hey Annon—Here’s a question for you. You say that this Muhawieh guy made a lot of money for a lot of people…Just curious if you might know of some of the people’s names????????????? I wonder how they were able to get their money back and the others aren’t.
    Thanks

  30. Posted by anonn

    This is only anecdotal. A friend of mine who is a small business owner in a neighborhood populated by people from Maher’s community was approached for years by several Malawieh investors. It was along the lines of “You should invest with Maher. He only makes money. He’s never lost it.” This happened all through this decade, to hear him tell it. Lucky for him he did his own thing instead.
    But that was then. What you’re talking about is something else. When the tide turned, it really turned. I’ve looked at a lot of his purchases. He lost sight of the need to make good value buys. If you read some of the articles, he admits it too.

  31. Posted by Justiceforall

    Annon, thanks for the info. You mean to tell me that it wasn’t only Muhawieh going asking these investors for their money? He had other people working with or for him?

  32. Posted by anonn

    What I mean is that he was making his investors money and they were boasting about it. They were encouraging others to join in what they depicted as a lucrative private equity pool.

  33. Posted by LMRiM

    As I said in one of these Muhawieh somewhere, this sounds like a typical affinity scam. It probably didn’t start out that way – I bet Muhawieh sincerely believed in the dope he was peddling, and things just snowballed. Stuff like this always happens in every bubble.
    About investors getting “paid back”? Not a chance. This turkey’s done – put a fork in it. Maybe in 5-10 years he’ll reemerge in some other type of venture – he’s obviously got talent and charisma. That would be pretty typical too.

  34. Posted by Trip

    Reading some of the many court complaints against this guy, it is clear that he is quite good at getting people to throw substantial amounts of money at him — promises of 20% returns, etc. There is an old adage: “You can’t con an honest person.” That may have some applicability here as well.
    I doubt the DA will get involved. When people only rip off friends and family, the prosecutors generally just let the civil court system deal with it (perhaps they have the above adage in mind). The sums are significant enough that his victims may chase him down. You can’t discharge in bankruptcy debts that are the result of fraud. On the other hand, you can’t get blood from a stone.

  35. Posted by auden

    EB Guy- Since you are the foreclosure resource for the site, have all the Muhawieh properties worked there way through the foreclosure system yet?

  36. Posted by sparky-b

    Cole street was sold and not foreclosed.

  37. Posted by auden

    thanks S-B. Cole was one of the nicer properties.

  38. Posted by auden

    What’s happening to the vapor room on Haight? Muhawieh’s antics may take down one of the finer SF institutions. You can buy AND smoke inside.

  39. Posted by Taking Action

    I let Maher borrow 1400.00 from me last week. He begged me to borrow the money from someone else if I could. He said it would be worth it financially. I told him how important it was that I received the money back that this past Thursday. He said not to worry even thought he claimed to be “Sick” He dodged my calls, and my email requesting for my money to be paid back to me as well as text messages that I’ve sent him. I am in the process of suing him. As of yesterday I decided to google him only to find some info. on this site and other sites. He is obviously a user, and I only hope that by taking him to court with the promisarry email I made him send me before lending him the money, will teach him a lesson. For those of you that have not started the process of suing him…What are you waiting for?? He is constantly taking advantage of people like me through mutual friends, but I will soon make sure everyone finds out about him by taking him to court through court t.v.

  40. Posted by Taking Action

    I guess I should also mention that Maher promised me interest of 550.00 on top of the 1400.00 I let him borrow by Thursday, plus 70.00 that I recieved for 2 checks that did not clear due to the fact that he was one day late paying me back from the last loan he borrowed from me about a week ago. He has begged me to borrow money every other week for something. Which I of course collected interest. To those of you who believe in him Don’t trust him. He is not trustworthy.

  41. Posted by diemos

    Neither a borrower nor a lender be,
    For loan oft loses both itself and friend,
    And borrowing dulls the edge of husbandry.

    And that other great chestnut, “If it sounds too good to be true it probably is.”

  42. Posted by sfrenegade

    “I guess I should also mention that Maher promised me interest of 550.00 on top of the 1400.00 I let him borrow by Thursday”
    Usually not a good idea to admit to usury on the Internets. If you actually sued him for the interest, he might be able to get treble damages under California law.

  43. Posted by nsc68

    Taking Action. Try the county of SF court system next time for your research. Muhawieh has been sued at least 22 times in the last 3 years.
    While you are at it, it looks like you should research the term usury.

  44. Posted by Rillion

    Someone tell that to the credit card companies and the payday loan people, 39% interest rate is common these days.

  45. Posted by nsc68

    I don’t know credit card companies case by case, but it is probably legal. The interest rates the Maher investors are receiving are only illegal because the transactions are not being brokered by mortgage brokers (more or less). Any loan rate over 10% is illegal unless handled by a broker.

  46. Posted by sfrenegade

    Credit card interest is regulated by the state of incorporation, per court ruling. That’s why Citibank is officially in South Dakota — no usury limit.
    Payday loans are an odd duck, because they are protected in some states and not in others.
    In any case, person-to-person transactions have different limits in California. Usury laws are complicated, and you should check with a lawyer if you are concerned. But people should be wary of anything above 10% in California, and I believe certain types of transactions are limited to prime + 6%, which is lower than 10% now. Criminal usury has different limits too — can’t remember if that’s 25% or something else.

  47. Posted by Rillion

    Once again we see the system is stacked against your mom & pop loan sharks in favor of the big banks!

  48. Posted by bill

    Chiming in a little late…. I am one of the many who “threw” my money at Maher. I totally fell for his spiel. I knew him through a mutual friend. He was charming and told me stories about receiving a key to the city and many acts of charity. I honestly felt proud of him. I have not received any of the promised returns on my investment and have lost so much of my savings. So much. It is my own fault for becoming dazzled with such an impossible return. At the time though, was a very unseasoned investor and frankly ignorant. This has been a tough lesson for me and my family.
    Just before I realized (last year) what was going on- Maher was still trying to get me to give him more money. But at that point there was a desperation in his demeanor. He became shifty. Never answers his phone. Is always “sick” and generally hiding out. I honestly don’t understand how this guy is still walking around and “doing business”.
    I haven’t received any of my money since that time, although he continues to promise that he hasn’t forgotten about me. I believe he began with good intentions, but now- he is a bonified con artist and thief. Still, to this day tricking people into giving him money. He doesn’t really have any assets. Lives with mom and pop.

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