Investors help spruce up isle's neighborhoods

GALVESTON — Some out-of-town and local investors, perhaps leery of diminishing stock market returns, are putting their money behind island homes.

And local real estate observers hope it’s catching.

“It’s already happening in Lost Bayou,” said V.J. Tramonte, an island real estate agent. “There are three or four people buying homes and fixing them up. It’s contagious.”

Lost Bayou Historical District lies within the San Jacinto neighborhood boundaries, which are Broadway to the north, Seawall Boulevard to the south, 23rd Street to the west and Sixth Street to the east.

In the San Jacinto neighborhood, island residents Thomas Schwenk and Jack Bell have revitalization fever.

Schwenk and Bell started out in Galveston as weekenders and admire the island’s stately old homes.

Structures in the neighborhood are predominantly turn-of-the-century historical buildings with mostly Victorian architecture.

In 1987, Schwenk and Bell purchased a historic home at 1502 Ave. L, within the neighborhood. The two restored it and call it home.

But they wanted to do more.

In April, they rounded up Santa Rosa, Calif., investors John Hayes and Michael Golas and together, purchased a home across the street.

The investors, whose group goes by the name Michael Thomas Investments, spent $65,000 to buy the property, completely renovate it, give it a new roof and porch and bring it up to code.

Compared to California prices, local property is a bargain, said Golas, who owns a landscaping firm in Santa Rosa.

While wanting to get a return on investment, the group also wants to preserve the historic structures.

The apartments, which are ready to rent, also have new floors and carpeting. The home, built in the early 1900s, had an illegal third apartment before the investment firm renovated the property.

Now, two stylish apartments are available on the site, where once there were structures the group described as “deplorable.”

Tramonte is behind the leasing and management of the property.

“Since we’ve renovated, we’ve noticed that the neighbors keep their yards up a lot better,” Schwenk said.

The group hired locally-based builder and renovater Rawlins Residential to preserve the old-style of the homes.

The group is searching for more island properties to add to its portfolio.

Tony Akin, who has homes in Houston and Galveston, is overseeing the renovation of a series of run-down cottages on Sealy Avenue, north of Broadway. Akin is managing the contractor work for Houston physician Alan Hurwitz.

Hurwitz, who owns a Galveston home on Elm Street, has purchased cottage homes at 2710 Sealy Ave. and 2708 Sealy Ave. and owns another property on Avenue K.

Hurwitz, who was unavailable for comment, bought the run-down cottages in a foreclosure sale. The houses are being gutted, restored and returned to the tax rolls.

Even Akin isn’t immune to the island real estate fever spreading.

Akin already owns a home at 1610 Ave. N½. He bought the house two years ago, gutted and renovated it. And he’s searching for more.

“I’m looking at a couple of properties now,” Akin said.

Real estate agent Tramonte said investors are choosing real estate over the stock market as a more stable means of investing.

There’s a ripple effect.

James Lemire, who owns Seabird Construction, typically does most of his jobs in League City and Texas City. But Lemire’s contractor work is in high demand on the island. He’s working on the Hurwitz homes, among other projects.

“I’ve got so much work in Galveston, I have to work the weekend,” Lemire said. “I don’t take any days off.”