By Mark Wineka
mwineka@salisburypost.com
EAST SPENCER ó Cherrathee Hager was the only person to give this house at 126 Division Ave. a second look.
A foreclosure property, it had been empty for several years. From the front sidewalk, Hager could see the crumbling front porch, water damage, the need for a new roof and the overall film of neglect.
But inside she was pleasantly surprised. The overall structure seemed solid.
Under the downstairs carpets were heart pine floors. The kitchen just needed some updating. The living room fireplace had virtually all of its original tile.
She noticed some stress fractures in the plaster, but nothing serious.
Most of the windows were in good shape. The upstairs, which had been renovated not long before the house was foreclosed on, was close to move-in condition.
Another plus was all the space: three bedrooms and two full baths as part of its 1,800 square feet.
A subsequent inspection by one of her contractors confirmed the house had no serious structural or termite problems.
“If a house has good bones, you get a lot more for your money than with a new home,” Hager says. “You have to see past the wrinkles, past the bumps.”
Hager’s contracting crews are almost two weeks into a monthlong rehabilitation of this Division Avenue house, which dates back to the early 20th century. The property had a tax value of $84,000 but was being listed for sale at only $25,000.
Hager and her investment partner, Pat Marsh, bought it for less.
They plan to sink $35,000 to $40,000 into the rehabilitation before putting it back on the market. They’re confident it will sell, and if it doesn’t, they have a solid rental property until the market improves.
The women say the rehabilitation project, which they entered to make a profit, also has the important side benefit of promoting neighborhood revitalization in East Spencer.
As a longtime real estate investor, Hager has increasingly bought houses to rehabilitate with an eye toward turning neighborhoods around. In East Spencer, she previously has bought, renovated and resold two properties on Torbush Drive and another on Spruce Street.
She also has a rental property on Earnhardt Street.
“It starts being contagious,” Hager says, noting that the house next to her Division Avenue project has just installed new siding.
Through the years, Hager has rehabilitated houses in Salisbury, too. This is her third project with Marsh as a working investment partner.
“I have created a name to describe my goal for East Spencer,” says Hager, who owns Twin Oak Development. “I call it CPR ó Community Pride Revitalization.”
At the Division Avenue home Saturday, Hager shared her expertise with 40 participants in a real estate investors’ class, sponsored by the Metrolina Real Estate Investors Association.
The class spent two hours at Hager’s Twin Oak Development office, where Walter Wilson gave a program on home inspections and what to look for when purchasing an investment property.
Then the class moved to Division Avenue, where East Spencer Mayor Erma Jefferies greeted them.
“We are so excited about having people come in and rehabilitate these houses,” Jefferies said.
A majority of East Spencer residents are at the poverty level, the mayor noted, and they need affordable, adequate housing.
“It makes a big difference,” Jefferies said of private investors like Hager who are trying to improve the existing housing stock, “because there is money out there for our citizens.”
East Spencer qualifies as a rural area, and U.S. Department of Agriculture financing and grants are available to qualified homebuyers. Hager stays in contact with Jefferies and the town’s Community Development Corp. in trying to find potential families for her homes.
In marketing the properties, Hager also promotes East Spencer’s proximity to Interstate 85.
“By rehabbing these homes, there are numerous benefits,” Hager says. “Creating jobs for local workers and contractors, improving the neighborhood, increasing the tax base by increasing the value of a distressed house and providing a lovely home to a deserving family.”
Hager made a great investment on her Spruce Street project. She bought the property for $24,000, put $30,000 into the renovations and sold it within two-and-a-half weeks for $98,000.
She says one secret to her success has been working with the same group of contractors for the past eight to nine years.
“She has a great group of people,” real estate investor Jon Wilson of Kannapolis agrees. “Getting your team together is ideal.”
A rehabilitation has to be on schedule, and the contractors have to know how to work on these older homes, Hager says.
“They’re (the houses) are very temperamental,” she adds. “They have surprises for you.”
When searching for properties to buy and rehabilitate, Hager says she looks for a good price ó often a foreclosure house ó and decent neighborhoods. But falling in love with a bargain price “sometimes is not a good idea,” Marsh says, explaining how an expensive renovation might eat up all of those savings.
Because lenders are leery now of financing real estate investors, Hager and Marsh are having to pay for everything themselves. “I needed a partner, so I called Pat,” Hager says.
“We cleaned out our piggy banks and decided we would partner on transforming this house into a home,” she adds.
The pair won a historic preservation award in Salisbury for their work in the Fulton Heights neighborhood.
Hager says today’s suffering economy has put many existing homes on the market “which can be updated and transformed into affordable homes for families.”
Hager urged the participants in Saturday’s on-site class to keep their emotions out of things when deciding on whether to purchase and rehabilitate a house. Don’t fall in love with the way it might look from the outside, she warned.
Do the necessary inspections and determine before buying whether it can be renovated and, after that, whether it can be sold, she advised.
When the Division Avenue house is finished, Hager and Marsh plan to have an open house, which will be more like a community event. It will include food and live music, with information to pass out on grant and loan programs.
Those attending the Saturday class received four hours of continuing education credits toward completion of their Professional Housing Provider National Certification, offered through the National Real Estate Association.
Metrolina REIA offers 20 hours of education a month for its members, and Hager is the leader for the Concord Area Subgroup and is on the Metrolina REIA board.