On a single dead-end street on Meetinghouse Hill, two extremes of Dorchester's troubled multi-family housing market can be found side by side. The difference between these two three-deckers on Navillus Terrace - creatively named for a man named Sullivan - reflects market price, but also conjures up a fortune-telling vision for the neighborhood.

With multi-family buildings accounting for a large share of properties heading toward foreclosure, and more foreclosure filings in Dorchester than any place in Massachusetts except Worcester and Springfield, the conflicting extremes are cause for concern, even if mixed with hope for a market recovery.

Late last September, after mortgage defaults led to a rash of boarded-up three-deckers on Hendry Street and elsewhere, causing property prices to plummet in Dorchester particularly, all the units in a three-decker at 10 Navillus - just three short blocks away from Hendry - sold for no less than $345,000 apiece.

The buyers seem to be habitual high-price mortgage borrowers. The mortgage on one unit was for a second home, and the lenders for the other units waived the requirement for owner-occupancy. Two of the owners have also bought units at other locations in Dorchester.

Next door, at 12 Navillus, there's a very different story. After changing hands three times in little more than two years, the entire three-decker was sold at auction last month for $260,000. The buyer was an investor and developer who also bought five other properties in Dorchester sold by auction since last November.

What neither vision at Navillus involves is owner-occupancy on even one floor, the thing most neighborhood activists say is most vital to improving any neighborhood.

The developer whose firm did the conversion at 10 Navillus, Michael "Dave" Scott, says, "You're going to see more investors buy this housing. It's going to be an investor's market."

Real estate analyst John Anderson has spotted both trends: unit sales at prices that still make him predict more foreclosures, and buildings at bargain prices often going to investor/developers who survived the slumps of the past.

"Everybody's having a field day, except the people who live in Dorchester," said Anderson. "We're still concentrating equity and wealth in the hands of the people who have it."

Pricey Condos in a Depressed Market

On paper, it would appear the equity in multi-family conversions is going to people like Scott, who shows up in several conversions as manager of the development company Southeast Properties. But Scott says he also pays back equity through renovations, and by providing jobs.

"I have a lot of expenses that you don't see," he said. "The rehab costs are really killing me."

Scott has been linked to conversions of more than one hundred units, whether in sales by himself, his development entities, or associates. Most of the units are in Dorchester and Roxbury, with many sales going to buyers who buy multiple units. Many of the buyers are listed as being from other states or locales outside of Boston, and the number of foreclosure filings against these buyers - whether at locations involving Scott or other developers - continues to climb.

Three weeks ago, in response to a Reporter article detailing at least eight foreclosures among his converted units, Scott said the figure was "impressive," given the overall market.

"If I don't have foreclosures, I think I'm doing something wrong," he said.

A review of additional and more recent transactions on properties where Scott has been involved shows roughly two dozen petitions to foreclose. That figure includes units where Scott represented a buyer with power of attorney, or where units in a conversion that involved him were sold again, usually within no more than a matter of months.

Scott says he sells units to "legitimate buyers," even though, he allows, they "sometimes make bad choices." He notes that condo units purchased for investment take time to pay off.

"I think it's a good investment," he says, "because after taxes, you're making money and you're building up equity over time."

But, for a good deal of his unit buyers, time tends to run out.

"It's a scary market," says Scott. "Everybody's pointing fingers. It's a high-risk area."

Scott points his own finger at appraisers, underwriters, and some buyers. He also points at 20 Sawyer Ave., a three-decker where a developer named Edward Mazurkiewicz sold three units for $439,900 apiece to a buyer from Hyde Park, Cristobal Toledano. The sales took place in May and June of last year. By May 1 of this year, foreclosure petitions had been filed in all three units.

He also points to Draper Street, where several converted units have drawn foreclosure petitions. Three of them were at 85 Draper St., a house purchased by Giles Moss-Hayes, who was represented through power of attorney by Patrick F. Lee. At 80 Draper St. across the street, Lee sold two units that would later draw foreclosure petitions. Each of them sold in November 2006 for $374,900.

Lee also represented Moss-Hayes in the conversion of 110 Norton St., where all three units sold in May and June of 2006 for $350,000 apiece. Foreclosure petitions would later be filed on all three units.

Over the past two years, there have been 17 foreclosure filings in buildings where Lee figured in a condo conversion. In his most recent transaction, Lee was the buyer for three units in a house on Theodore Street in the Franklin Field area where foreclosures are taking a serious bite out of housing prices. He bought the units in January of this year, at $315,000 apiece, from, wait for it… Giles Moss-Hayes.

A review of more than 200 conversions over the last two years in Boston - mostly in Dorchester and Roxbury - shows more than 100 foreclosure filings against owners who bought more than one unit, sometimes in the same building. Names that appear as unit buyers with mortgage trouble sometimes turn up later as investors converting more units, or as people with power of attorney to represent other buyers.

One of the stand-ins is Jerrold Fowler, a buyer from Norfolk, Virginia, who purchased a unit from Scott on Avondale Street in Lower Mills in November 2006. A foreclosure petition on the unit was filed last month. In the interim, Fowler was given power of attorney to represent buyers in seven other unit sales involving Scott.

Another unit buyer recycled into a developer was Tariq Muhammad. He lost three units to foreclosure in a three-decker at 43 Whitfield St.

After two of the units there were sold at auction to another developer with his own trail of mortgage troubles, they were resold this year to buyers from out of state.

In the developer role, Muhammad converted a three-decker at 310 Fuller St., where he sold two units last year for $355,000 apiece, and one this year for $365,000. A foreclosure petition on one of the units sold last year was filed in July. Meanwhile short sales and bank-owned condos, albeit without existing condo associations - have gone for less than half of that price on Fuller.

The New Market: Owners or Investors?

In a local multi-family market where Anderson sees an "incestuous mess," some see opportunities, at least in the long term, and probably without more condos.

One investor and developer, who is mainly avoiding conversions, says there is a market for three-deckers and "plenty of value" in Dorchester. But he also says media reports have frightened off buyers, and even scared some owners into walking away from their property.

"There's some good buys out there," he says, "and, instead of waiting for the market to bottom out, they should be out there buying."

Some predictions call for the Dorchester market to begin recovering in one or two years. The executive director of the Mass. Affordable Housing Alliance, Thomas Callahan says there has recently been a "fair amount of activity" in its "soft-second" mortgage program to make purchases more affordable for first-time home-buyers.

"We are definitely seeing people taking advantage of the market drop," he said.

But Callahan says even the current lower prices on three-deckers are no match for the affordability of the early 1990s, when these houses were within range for buyers with an annual income of $30,000.

"What we say in our classes," Callahan notes, "is that three-deckers are not for everyone. You've got to really want to be a landlord."

Potential buyers interested in multi-family housing still have to compete with the market for conversions. A survey of recent conversions in Dorchester - on Mt. Vernon Street, Rill Street, Adams Street, Everton Street, Torrey Street and Topliff Street - shows several buyers who have also bought units at other locations. The prices are lower than figures for the condo conversions of two and three years ago - for sale of the entire building and for units, most of which have been selling for less than $300,000 apiece.

While the city works toward bringing owner-occupancy back to vacant houses on Hendry, at least one non-profit community development group is exploring ways to break the foreclosure cycle at other properties. Codman Square Neighborhood Development Corporation Executive director Gail Lattimore said it's difficult to get cooperation from most of the companies in charge of foreclosure sales. And putting the properties back into control of owner-occupants or "good-guy" investors, she said, will require more intervention from the private and public sector.

"I'm a little concerned," she said, "that if there are lots of investors out there, I don't think it bodes well for Codman Square and the rest of Dorchester being stable as we go forward."

Editors note: Patrick F. Lee shares part of his name with a principal in the development firm Trinity Financial, but other than that, there is no connection between the two men.