Two brothers from Cyprus started out flipping North Texas houses. Now they own a homebuilding giant

The $1 billion Mercer Crossing community under construction northwest of Dallas is one of the largest projects being built in the town of Farmers Branch.

The residential community near LBJ Freeway is also the biggest deal yet by fast-growing local builder Megatel Homes — founded by two brothers from Cyprus who started out buying foreclosure properties with money borrowed from their father.

"There are 1,000 home sites under development right now in Mercer Crossing, and Megatel controls 700 of those lots," co-founder Zach Ipour said. "We just opened the first model home here in January of this year.

"And we are selling 15 to 20 homes a month."

The huge Mercer Crossing development is helping to raise the profile of Megatel Homes — one of Texas' fastest growing builders with projects in all the major markets.

In an unconventional move, Megatel brought in President Donald Trump's newest legal adviser and former New York mayor, Rudy Giuliani, as the guest of honor for a May 8 grand-opening party for the Mercer Crossing development.

"We have over 100 active subdivisions all over Texas and 65 to 70 subdivisions in Dallas-Fort Worth," Ipour said. "We build north all the way to the town of Gunter in Grayson County and south all the way to Waxahachie."

Ted Wilson with Dallas-based housing analyst Residential Strategies said Megatel is now one of North Texas' top 10 builders.

"They have been a juggernaut," Wilson said. "It's pretty amazing what they have done."

And, for the first time, Megatel is looking at projects outside Texas, with plans for Colorado and Florida markets.

"We've had to convince ourselves to go out of Texas since Texas is doing extremely well," Ipour said. "We are expecting to sell between 1,200 and 1,400 homes this year."

Some competitors criticize Megatel, saying it pays too much for some of its land and question its long-term funding strength, but that hasn't stopped the company from growing. The company also builds more speculative homes than many of its competitors.

They offer incentives to real estate agents for help moving their properties.

Brothers from Cyprus

Megatel Homes got its start more than a decade ago when two brothers from Cyprus migrated to Dallas.

Aaron Ipour came to the U.S. first and younger brother Zach followed in 2006 after graduating from university. Zach Ipour said real estate "was the only thing I thought I could do at the time. I had to stay at my brother's house because I was so poor."

Funded with startup money borrowed from their father, the brothers started buying distressed properties.

"We were going to the Collin County courthouse and buying foreclosure homes," Ipour said.

The brothers would fix up the houses and sell them for a profit — only a few thousand dollars to start.

Zach Ipour, co-founder of Megatel Homes, poses on the stairs of the model home at the Mercer Crossing development in Farmers Branch. Mercer Crossing is a 370-acre mixed-use development and is on the north side of LBJ Freeway near Luna Road. Megatel Homes in the development start at $429,000.

When the Ipours had the chance to buy some home sites in Forney in 2007 from a failing builder, they decided to construct their own houses for sale.

"We were building homes for a very thin margin — $5,000 to $10,000 profit and waiting for the market to come back," Ipour said. "The market came back much quicker than anybody expected, and we started receiving offers from builders to buy our lots.

"We thought maybe it was better to expand our homebuilding operations," he said. "I'm glad we didn't sell."

Next year, Megatel plans to start building apartments for the first time.

"I never would have thought back then we would reach the size and the scale Megatel has grown to today," he said. "We just work hard and over the years have improved our equity position in the company."

Focus on affordability

Founded barely a decade ago, family-owned Megatel sells everything from townhomes priced below $300,000 to custom-style houses priced over $600,000.

"Two years ago, our average price was in the mid $400,000s, but we noticed the market is shifting and affordability becoming an issue for the homebuyers," Ipour said. "We came up with more high-density product.

"In the last two years, we have lowered our average price point to $330,000 or $340,00," he said. "We are now the second-largest townhome builder in D-FW."

At Mercer Crossing, Megatel Homes is building townhomes starting in price under $300,000 and detached single-family houses that begin in price near $340,000.

"It's one of the largest developments Megatel has ever been part of," Ipour said. "Demand has been very strong.

"Our goal is to be built out in Mercer Crossing in the next two to two and a half years if the economy stays strong."

A living area in a 3250 square foot model home in Megatel's Mercer Crossing development in Farmers Branch.

Two years ago, when Megatel bought the home sites in Mercer Crossing from developer Centurion American Development Group, the location — planned as an office park in the 1980s — was unproven.

"We were uncertain it would work and now we are so grateful we did it," Ipour said.

Megatel Homes is still flying below the radar of many North Texas businesses and consumers.

"We build a couple thousand homes a year and most people haven't heard of Megatel," Ipour said.

https://www.dallasnews.com/business/real-estate/2018/05/11/two-cyprus-brothers-went-flipping-houses-owning-north-texas-homebuilding-giant

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