"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.