Sam Zell was looking for opportunities, and he found a winner in Mexico.
The government was working with developers to build massive housing complexes for poor and working-class families outside every major city. With billions in government funds flowing into the housing market, builders stood to reap a bonanza.
Zell, a Chicago real estate billionaire, spotted a prospect in 2002 in the northern state of Sinaloa — a small construction company called Homex owned by four brothers of the De Nicolas family.
The brothers possessed the ambition. Zell, through his Equity International Investment Fund I, provided a boost of capital: $32 million.
Over the next six years,...