Real estate maven Maxwell Drever often chooses to invest in affordable housing in areas that aren't so welcoming to new and-let's be blunt-wealthy, big-city developers who wear suits, suspenders and bowties. Moreover, residents of these housing developments aren't particularly hospitable to outsiders, or new residents who might complain about certain criminal activities taking place on the grounds.

"We get a lot of gangs that we have to deal with," says Drever, a white-haired, white-mustached gent who dresses in the above said attire.

Despite the moustache and the fact that his daily regimen involves swimming in the cold waters of the San Francisco Bay to stay in formidable shape, Drever, 71, doesn't see himself fitting the mold of the vigilante character that actor Charles Bronson played in the Death Wish films. Drever's solution to gang and criminal infestation of a housing project is far more elegant than pulling out a gun: He calls the cops. He doesn't file complaints; he offers policemen a place to live.

"We always do this in areas that are a little bit problematic. We put police in two of the front units. We give them [free rent], or have them pay reduced rent," Drever explains. "They park their squad cars out front. ... You want to drive by a squad car all the time? It's not good karma [for criminals]." He says the criminals quickly move out.

Cleaning up crime is just one element Tiburon, Calif.-based Drever Capital Management, his investment arm, incorporates into its strategy. DCM has a pretty straightforward and simple business plan: It acquires distressed multifamily properties in submarket areas of major cities and fixes them up. Returns have been as much as 400% on some properties. But what DCM really looks for is consistent, longer-term premium returns.

Some of Drever's biggest investors are life insurance companies. And life insurance companies are interested in quantifiable returns, he says. "They are not interested in risk. They would rather invest for 10 years at 9% than three years and get a 20% return," Drever says. "It's because of safety. They need to cover their annuities."

Ever mindful of their investor base, Drever refurbishes properties with long-term cash flow in mind. The company largely accomplishes this by what it calls "dreverizing," which is another part of its triple-bottom-line approach. (DCM advertises that it's "doing well by doing good.") Dreverizing involves revitalizing communities and fostering pride in rental ownership.

"It's surprising how much longer you can get out of an apartment-the owner and the next owner and the next one will take care of it-if your street scene really looks great; people want to live there," Drever says. "There is so much less wear and tear on apartments if people stay."

Apartment turnover eats into profits. Every time a new tenant comes in there is new maintenance and additional costs, whether it be because of lost rental time or administrative fees.

"People don't realize just how expensive turnover is," Drever says. "Some of the turnover in the apartments we've bought was over 100% because people would leave and go next door where they could get a free TV and a couple of months' rent. We found out that by fixing [the apartments] up and making them look nice from the street that even if the guy next door's occupancy was 60%, we'd be full.

"There are always people that want to live in a nice place. They want to live in a home. And our average apartment's rent is only $796. We have 10,000 apartments, but they are nice. We are workforce housing. That is our motivation."

Drever says he starts with the street and works inside right down to the carpets when remodeling an apartment building. "I have always been involved in the landscape side of properties," says Drever, who is a master gardener. "Our properties are rental magnets. You go to the outside of them and you can tell."

From the landscaping to rod iron fences, to energy-efficient appliances and environmentally friendly carpets, to granite countertops and plank floors, the idea is to combine aesthetic appeal with sustainability, he says. "For the occupants it's great; they get lower utility bills," Drever says.

Still, financial returns are Drever's top priority. "The other stuff is OK. But it's got to be profitable financially first because we are buying the assets," Drever says.

To be sure, sustainability and profitability go hand in hand. But with the many pitfalls in the real estate sector these days, the emphasis now is on solid returns.

"I have been through so many cycles ... but this is one of the best times if not the best time in my lifetime to buy apartments," says Drever.

There are two sectors of the real estate market tracking right now, according to Drever. One is high-end apartments in high rises in major cities. "Some are at their all-time highs," he says. And then there are "broken" apartments-multi-unit buildings in disrepair. This is DCM's sweet spot.

Major opportunities exist in the Sun Belt, Drever says. The nation's aging baby boomers are migrating to the South and Southwest, making properties in these regions attractive, he says.

The low-interest-rate environment makes "fixer uppers" attractive to investors. Indeed, Drever says being able to borrow at 4% or less leaves a lot of upside after units are fixed up and occupancy rates increase. Because Drever's rents are relatively low-around $700 per month-fetching minimal rent increases brings big wins. For example, an $80 rent hike at one Houston property led to a 9% increase in cash flow, he says.

The investors that have stuck it out with Drever through thick and thin have been families. Indeed, Drever began investing with eight other families in the late 1960s. They cobbled together $50,000 and bought a rental triplex. They fixed it up and sold it off, netting a 400% return.

That set Drever off and running. And some of those families still invest with Drever today.

Drever operates through three different entities: DCM, Crossbeam Holdings and Drever Mitchell Torres LLC. He and his family always invest alongside investors through the myriad funds set up to invest in particular properties.

Drever has used this model successfully through different incarnations: in Seattle in the 1970s to redevelop 16 multifamily communities; in the 1980s with Resolution Trust Company assets (Drever acquired more than 18,000 units from the RTC); and in California and Florida in the 1990s, when he merged with a publicly traded real estate investment trust (REIT), Walden Residential Properties. In the 2000s, Drever stayed relatively quiet until 2009, when he merged his investment vehicle, Concierge Asset Management, with Crossbeam Capital, an apartment investment advisor to the insurance industry.

With Drever Capital Management's Parallel Fund II and Crossbeam's Apartment Fund II, Drever is once again buying multifamily properties and apartments.

At the center of the investment philosophy is the "doing well by doing good" mandate. Indeed, on page five of the Parallel Fund II's sales brochure, additional profit builders for its communities are:
A tutoring program and service projects for school-age children.
Complimentary health care screening.
Health and wellness seminars.
Onsite police and fire educational sessions.
Two annual community involvement projects for its team members and residents.

These social initiatives are on top of the de rigueur sustainable improvements: Energy Star appliances; environmentally friendly flooring; devices that conserve potable water; drought-tolerant landscaping and irrigation reduction upgrades; and LEED certification, which provides third-party verification that a building was designed and built using strategies aimed at achieving sustainability.

These socially responsible tactics up the ante from anything Drever has done before. "It's exponential impact investing," Drever says. "It's huge."

Creating housing communities as opposed to mere housing complexes is what Drever is all about these days. Perhaps it's because he's aging and wants to leave a bigger mark, or perhaps it's because he sees the financial value in sustainability, or perhaps he sees something else in this ethos.

Drever, who was on his way to see his grandchildren in Disneyland after an interview for this magazine, talks a lot about family-his, his investors', and even the families of his rental property residents.

"It's why we called ourselves 'concierge,'" he says.  "We cater to the housing needs of the workforce." In other words, they are like family, too. Which means if the economy picks up and there is increased job growth and employment, Drever's properties' values will rise in kind.
Police should expect more calls.