Builder No. 2 to the Rescue
Firms Step In, Finish Developments After Owners Walk Away
Howard Fingeroot, center, and other Pinnacle Homes officials inside a model home at Kirkway Estates in Michigan.
(By Andre J. Jackson -- Detroit Free Press)
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Saturday, April 12, 2008
Ever wonder what happens to those half-done subdivisions?
Sometimes, the owners walk away, leaving the neighborhood in the hands of a bank that doesn't really want it.
That's when companies like Pinnacle Homes of Farmington Hills, Mich., enter the picture.
Pinnacle, a home-building firm run by a former Pulte executive, has picked up four unfinished subdivision projects throughout metro Detroit after working out deals with banks.
Howard Fingeroot, managing partner of Pinnacle Homes and the former president of Pulte Land Development, said the projects are the result of many contacts to banks.
"We started looking in 2006 because it became evident when the market turned down that the banks would be saddled with a number of properties that they would have to take back," he said.
Fingeroot said some of the projects were bought from the banks. In other deals, Pinnacle agreed to finish building the homes and handle marketing and sales for the banks.
Kirkway Estates in Lyon Township, Mich., is one such project. In a venture with AmTrust Bank of Cleveland, Pinnacle will finish building 85 homes in the 100-lot development for a fee and the bank will retain ownership. The homes will range from 2,800 to 3,400 square feet and will be listed around $330,000, Fingeroot said.
Pinnacle is providing the same service for Comerica Bank at the Hills of Oxford in Lake Orion, Mich., a 200-home subdivision with 150 left to build.
Pinnacle bought a Novi, Mich., project from Citizens Bank and changed its name to Bella Terra. There were 67 fully developed lots with plans for homes ranging from 2,800 to 3,800 square feet. The company has not started building there.
And at Greenbriar, a 102-unit duplex development in Commerce Township, Mich., Pinnacle bought the project from Comerica Bank. Fingeroot said he plans to convert 50 of the duplexes to single-family homes to reposition it in the market. The properties are to start at 1,900 square feet and $200,000.
"We were fortunate that when the downturn took place, we weren't strapped with a lot of inventory at high prices," Fingeroot said. "You can't make money in times like these. The best you can do is position yourself for the market to improve."
