A man who calls himself Wolf was camped in front of 1132 Valencia St.


He had vanished, said real estate sources, contractors and others last month when Maher Muhawieh’s name became attached to legal troubles at one of Valencia Street’s empty storefronts.

But Muhawieh (mah-ha-wi-ay), a soft-spoken 29-year-old, soon surfaced to talk about his adventures in the turbulent San Francisco real estate market.

Muhawieh’s ride is a case study in what was once possible in that market; how a young entrepreneur from a large extended family involved with real estate could turn a couple  of properties into a small empire. In his case, Muhawieh’s rise is, in part, also an immigrant tale. He belongs to an extended family of successful Christian Palestinians from Ramallah who trace their lineage to one family, according to a family member who, like others interviewed for this piece, asked not to be named.

Rising property values became Muhawieh’s collateral to buy one building after another, property records show. The current economic crisis has his properties swamped in debt and possible foreclosures, but the strength of his family’s support and his own determination to succeed make it too soon to say he will become another casualty of the economy’s swift decline.

A man who calls himself Wolf was camped in front of 1132 Valencia St.

Muhawieh said he grew up in a community of Arab-Americans that values entrepreneurial spirit. By the time he was 25, the San Francisco native, with a bachelor’s degree in finance from the University of San Francisco in hand, had opened a couple beauty shops and bought property as well. But, he didn’t stop there.

With a passion for architecture, the help of loose credit, and a booming housing market, the young dealer bought more than a dozen properties over the next few years.

“I have a big knack for design. I love architecture, so I wanted to showcase some of my thoughts,” Muhawieh said. He bought a couple properties in bad shape with the intention of  fixing them up. “I wanted to take something that was a diamond in the rough and make it into a gem.”

His plans were going well until last summer when the economy began to shift and the interest on his short–term adjustable loans began to rise, he said. Suddenly, he was paying more for the same loans so he quickly moved to refinance at better terms. In October, the restructuring looked good, and then the balloon popped. The market took a dive and refinancing became more difficult.

Muhawieh had already defaulted on a $175,000 loan in February 2008. But in December, still short on cash, his other deals also started to unravel. He defaulted on one mortgage that month, then two in January, eight in February, and two more in March, according to public records. So far, he appears to have paid off only the mortgage of more than $800,000 that he defaulted on in December. He said he is trying to renegotiate the others to get better terms.

The decision to default on multiple loans, he said, was strategic. At the end of last year, Muhawieh wanted to start fresh. It was a sort of New Year’s resolution, he said, to let some properties go.

“You don’t throw good money after bad money,” he said. “If you realize the values are going down, why pay the mortgage? Cut your losses.” It’s a strategy that millions of homeowners caught in the same bind of higher interest rates and lower values have followed.

Muhawieh’s stake, however, was bigger.

The young man has a casual demeanor—he is quick to use the diminutive “cous”—and drives an unassuming SUV. Depending on who you ask, he is either smart, resourceful, and bound to come out of his current troubles clean, or he is a clever smooth-talker who made one too many mistakes.

Or perhaps it’s some combination of the two, said one member of his extended family who did not want his name published.

“What you have to understand is this is part of an extended family, where he gained trust from family members and friends,” the family member said. The extended family—which counts tens of thousands of U.S. members, holds annual conventions, and even has its own phone book—gave Muhawieh an existing web of connections on which he could draw, the family member said.“The more investors he got, the more he thought, ‘I can capture this, and I can capture this,’ and he just kept going and he was overwhelmed before he knew where he was going.”

The family member said Muhawieh is sincerely trying to fix the situation and pay his creditors, but that he may have lost control and gotten in over his head. “If you have one guy trying to juggle anywhere between 30 and 50 projects … He’s still young, he’s still green.”

While his losses have been bigger than the average homeowner, Muhawieh’s cash-flow crunch is no different in its essence than what happened to homeowners across the state over the last few months. In April, MDA DataQuick released a report showing that more Californians had defaulted on their mortgages in the first quarter of 2009 than at any time since the company began compiling these numbers, in 1992. In San Francisco, notices of default were up more than 35 percent from a year earlier. For Muhawieh, the reason for his current trouble is simple.

“Interest rates are higher right now, the rental market’s lower, you can’t pay your mortgage,” he said. “Before, you were able to refinance, pull lines of credit out, this and that, and that’s not happening anymore.”

Until last summer, businessmen like Muhawieh enjoyed an unusually easy credit market, said John Quigley, a professor of economics at the University of California Berkeley who specializes in real estate. As real estate prices climbed and lenders began making money by bundling loans and reselling them in secondary markets, lenders became increasingly lax about assessing borrowers’ credit. In a sense, someone’s credit hardly mattered because the loans were quickly resold to others.

“The idea of underwriting is to establish whether the guy you’re giving the loan to is a worthy credit risk for the amount of money you’re giving him,” Quigley said. “If you jiggle things enough and you assume that prices are going to go up, lots of deadbeats become credit risks.”

Many loans were not underwritten well, he said, and now we are seeing the results. When a landowner goes under, it ends up affecting the local economy as a whole. In the case of Muhawieh, the effects are vacant storefronts—two of which are on Valencia Street—gutted buildings, and people owed money.

Take 605-611 Haight Street, a four-unit Victorian building with a commercial space that Muhawieh bought in May 2007 for $1.7 million, according to property records. Muhawieh got a loan for $1.2 million on the building from a company called Trust Deed Investments, which subsequently signed a number of investors onto the loan. Three months later, Muhawieh got another mortgage from a James and Aileen Jaber—members of his family’s network—for $450,000. The Jabers declined to talk about the loan.

Then in December 2007 or 2008, Muhawieh sent a letter to the tenants saying he wanted to renovate the building, according to a copy of the letter provided by one of the tenants. The letter alerted the tenants they would need to vacate the building, but it also said his long-term plan was to take the building off the rental market. This fit with Muhawieh’s pattern of trying to “flip” run down properties, but in this case there were tenants who had lived there for decades—with below-market rents—standing in the way.

He reached an agreement with the tenants last year to pay them a total of $145,000 divided among 10 tenants in two installments, one when they signed the papers and one after they moved out by the end of July. By fall he had yet to make the second payment—the larger of the two—and in November the tenants filed a lawsuit against him. The parties have gone through mediation but have not fully resolved the suit, according to the defendants’ lawyer, Jason Wolford.

Meanwhile, Muhawieh was able to take out another loan from another married couple with the name Nasrah—also part of the extended family, according to a family member and a Ramallah family tree—for $200,000, according to property records. Again, the Haight St. property became the collateral.

By April, the property he bought with the help of a $1.2 million mortgage in 2007 had been used for an additional $450,000 loan, the $200,000 loan and two earlier loans totaling $1.3 million, one from a bank and one from a friend, according to property records. In essence, his loans on the property had ballooned to more than $3.2 million, though about a third of that money was held against other properties as well, according to property records.

Muhawieh is currently trying to sell the property for $1.8 million, and he said he’ll pay the former tenants the rest of their money once it’s sold. But Trust Deed Investments has issued a Notice of Trustee Sale, meaning they intend to auction the property in June if Muhawieh is unable to sell it or pay off his mortgage before then.

He has also defaulted on a second loan on the property, which is now owned by Casco Bay Finance Co. of Delaware. It  is also backed by another property at 2987 22nd St, between Folsom and Treat, in the Mission. All the lenders listed above have to approve any sale, according to an agent with Coldwell Banker, the company listing the property.

For now, 10 former tenants are asking for more than $185,000, including damages. Christina Vissinger, who lived at 611 Haight, said she’s had to borrow money to pay the bills.

“I made the move by counting on that money, and to have certain expenses paid for,” she said. “My budget is over budget by $500 a month.”

Wolford said he’s worried that Muhawieh’s business practices will mean the tenants won’t get their money. “He’s basically siphoned all equity off his properties to purchase other properties, and then siphoned those properties to purchase others,” he said. “So the issue is there may not be any money due to these lending practices.”

Muhawieh’s investments extend into the Mission District, where he owns property on 22nd Street, on Mission Street between 21st and 22nd streets, and at 19th Street and Mission, according to property records. The  mortgages at all three are involved in defaults, according to property records. He is also a commercial tenant in two properties on Valencia St, and here too his financial troubles have surfaced.

At 758 Valencia, where he is the primary tenant and plans to open a healthy brunch-style restaurant called Grub, gas and plumbing fixtures jut from the tiled wall behind a chest-high counter. A large metal hood hangs over the space where the stove will sit. The appliances, he said, have all been purchased.

Muhawieh said he’ll open Grub by the end of the summer. He’s waiting on PG&E to do some electrical work, but a spokesperson from the utility said that while he cannot comment on individual cases, the company is generally ready to do this type of work once the customer is.

Muhawieh said the project was held back a few months because he ran out of cash, but he said he’s secured $100,000 from friends to complete the work once PG&E is done. There are also two outstanding liens for work done, totaling more than $5,000, though it is not clear whether Muhawieh or a contractor he hired is responsible for this money.

Down the block at 1132 Valencia, where he had hoped to open a restaurant in partnership with his cousins in the space once filled by Saigon Saigon, the project is dead, he said.  Construction companies are claiming tens of thousands of dollars in unpaid bills there, though again, Muhawieh said, it is the contractor’s debt. Muhawieh plans to give the space back to the owners.

The last real estate cycle, one he is still heavily involved in, has taught him a few lessons.

“I overextended myself in the market. Sometimes you think you’re bigger than the market,” he said. “You think you have control of everything. But hey, you don’t have control of financing, you don’t have control of the market.”

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  1. Obviously this guy has no morals or conscience While him and his mercedes family lives it up the victims are out of luck. My respect to the famiy members who see him for who he is and are not defending him. He knew what he was doing!

  2. Anyone who defends this guy needs their head examined that icludes family members. He scammed his own family. He tried to scam me and I did not fall for it. What a jerk

  3. Any positive comment made, is suprising to me, since so many people have been drained financially by this so called real estate investor. Families have turned on one another. People have been fooled by Maher, who basically did whatever he could to get in to people’s bank accounts. Maher knew he is was deep trouble, however continued taking out loans, despite major financial setbacks. I took, collected bounced checks, and payment for interst was always delayed. What kind of investment is that.

  4. Maher is a great guy coming from a good family. he is a good person and not a thief! I loaned him money few times and always got it back. maybe little later then what promised but never vanished or hide or escaped. he is one smart guy and potential of handling big projects and has a good heart. it’s not right to make assumptions about people without knowing them and their situations at times.

  5. none of you know what your talking about at all. you do not know his financial situations at all but you assume that you do and make nasty assumptions. maher is a very loyal guy. have you ever stopped to think about the economy playing a role in this? god bless maher and we all hope for the best.

  6. Yeah, this guy is a snake. I am part of this extended family, and dozens of my friends and family members have been scammed. He doesn’t have the decency to settle with them. He doesn’t return calls. He doesn’t say that he convinced simple minded people to mortgage their homes and properties to the max with a promise of ASTRONOMICAL returns of 15, 20, and even 40 (yes 40) percent annually. He has been borrowing to pay off previous lenders, handing his investors “deeds of trust” and only few of those investors actually understanding how and where to file them legally. He has been bouncing checks to countless investors since the initial stages of these acquisitions. Those deeds of trusts given were as good as toilet paper. He would take a new investor on a tour of his properties, telling that investor which building would be securing that particular debt…but he (as the article suggested) would have a dozen investors on a single property. He would be in debt three times a property value, and live the high life. This soft spoken lad doesn’t talk about how he bought his entire family Mercedes Benz’s to drive around. He doesn’t talk about how stiffed his best friend for every nickel (over $2 million dollars of hard earned family money). He doesn’t let on that he still has money that is protected in NUMEROUS limited liability corporations. This guy is a thief. Maybe he was just a liar at first, and became a thief at some point, but he’s the worst kind of liar and thief, because his ego won’t let him admit that he’s wrong.

  7. Tenants profited handily from the RE bubble too, though often self-portray is victims rather than beneficiaries. It shows here in this comments section where SB writes the tenants “only” got $14,000.00 per person. $14K!! … for what? Paying below market rate for years on their apartment?? So basically they got paid twice — once for all they saved paying under market rate, and then again to leave. And the sums paid to tenants are not always so “small” as $14K. Most buy-out agreements between property owners and tenants are mutually beneficial. In this case, the tenants got screwed for non-payment, but so did the investors. Both were the victims of the Real Estate bubble popping.

  8. I have no sympathy whatsoever for this amateur. Saying he “overextended” himself is a lame cop out. Sb is right, he is just another ponzi schemer but with much less tact and brains behind the job. I’d like to see a follow up article on the victims of his poor decisions, those who lent him money to buy all that property. Let them shed some light on this “soft spoken” thief.

  9. Sb – I’ve known Maher since we were both children and have money out to him, and you’re wrong. He got in over his head, but he’s no thief…if he can find a way to make this right, he will.

  10. Sb says – Only $14K per person… Last time I checked, 14K is a lot of money. Why should they get any money at all? The amount of entitlement thinking in San Francisco blows my mind.

  11. Only 14,000/person? And then he doesn’t even pay? Man, he absolutely screwed those tenants.

    I’m surprised this story has such a positive tone. This guy is just another ponzi schemer, stealing money from everyone around him. The sooner the banks and friends come to their senses, the sooner things get back to normal.

  12. Nice Reporting ! Very insightful. Like botcha says, this has exposed the green of individuals also.

    Wondering what state Mr Muhawieh is in. i.e.
    can he still get out of this hole, or
    will he disappear one day and be on local news ?? or
    will he declare bankrupcy and start fresh after 7 years 😉

  13. Why have any symnpathy for the tenants, especially Christina. She made the same mistake as Muhawieh – counting on money from an RE bubble.

  14. Good story . . . suggests that the greed of individuals, not just of corporations, has made life rougher for “ordinary folks” like the former tenants on Haight Street.