String of Pearls
Since participating in Dayton’s Rehabarama project in 1995, Urbieta Construction has purchased and restored five rundown buildings in the city’s Huffman Historic Area. The Urbietas paid between $16,000 and $45,000 for each property, and invested another $140,000 to $300,000 in each to remodel.
The Urbietas have financed their work in Huffman by various methods, including using conventional lines of credit based on their existing properties as collateral. They refinance each property upon completion, using the appreciated value to pay off the credit line. They say that they have never benefited from special incentive programs, except for a $15,000 grant they received for restoring the façade on 1725 E. Third St. within three months.
Other than 129 Ringgold, which the Urbietas never owned, the couple has kept its Huffman buildings as rentals. Monthly income from each apartment ranges from $550 to $900 — more than most Huffman rentals but less than comparably equipped apartments in Dayton’s downtown. With occasional exceptions, all apartments have rented quickly and consistently.
Liking a Good Neighbor
Urbieta Construction has some hard-learned advice for other remodelers considering speculative work in neglected neighborhoods or historic districts. In short, watch out for red tape and be a good neighbor.
“Paperwork is the hardest,” Juan Urbieta says. “I haven’t found an easy way to make [the city] believe I’m going to do it right.” The company often waits months — and spends thousands of dollars on drawings, studies, and fees —before getting permits. Various zoning authorities and the local historic board sometimes have conflicting requirements. Defining clear property rights, or even property lines, can be a headache. “When you buy old buildings, sometimes you don’t know if you own the whole thing or only half of it,” Juan jokes. The more a property is sold or modified, the greater the likelihood of errors or inconsistencies creeping into its file.
The Urbietas’ saving grace has been their exemplary participation in the Huffman community. “You want the neighborhood on your side,” says Mike Osgood, past-president of the Huffman Historic Society. “Every time the neighborhood has asked for their assistance” — such as volunteering for Rebuilding Together, local schools, and other causes — Juan and Carmen have “stepped up to help. They’re an integral part of the neighborhood.”
In return, Huffman neighbors support the Urbietas at public hearings. “Having neighbors stand up and say we support everything this developer has done — that makes an incredible difference,” Osgood says. “You can’t hire a lawyer to do that.”
Robert Ranzau, the couple’s commercial loan officer at Fifth Third Bank, says that lenders also take community involvement into account when reviewing a company’s loan application. “Juan and Carmen are passionate about their business and they’re very honest,” he says. “You look at a company’s financial performance, but you also look at the character of the customer.” The Urbietas’ character, he adds, “is without peer.”
Local organizations seem to agree. Preservation Dayton gave Urbieta Construction its Community Preservation Award in 2004. Earlier this year, the Dayton Better Business Bureau gave the company its Eclipse Integrity Award. Ranzau wrote a letter in support of the nomination.
Leveraging Future Growth
Urbieta Construction ( www.urbietaconstruction.com) spends about a quarter of its time developing the Huffman Historic Area, with the remainder devoted to income-producing remodeling projects in some of Dayton’s affluent suburbs. “Right now, Urbieta Construction supports our development work,” Juan says. “In the future, this is going to change, and development is going to support us. I’ve got 7 years to buy as much as I can,” he says. “I’d like to have 50 rentals by then.”
The company has undergone this kind of planned transition before. When the Urbietas formed Urbieta Construction, Carmen owned a small but successful dental laboratory. She kept the lab for 14 years until Urbieta Construction was fully in the black and self-sustaining.