Blighted urban neighborhoods are gold to Politzer Faith: Arnold Politzer is not disturbed that a house is falling down in a marginal neighborhood. His Lucky Realty Homes has found success in renovating urban wrecks and finding the people to buy them.

June 30, 1996|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Arnold Politzer erupted into hearty laughter at a visitor's stunned reaction to the house with its guts ripped out.

The worst houses Politzer renovates look like this rowhouse. Chunks of ceiling hang overhead and the walls have gaping holes, chipped paint and peeling paper.

The house in Irvington is dark, dusty, depressing, even without the more outstanding features of some of Politzer's other homes -- fire-scorched walls, graffiti, the occasional vagrant seeking shelter.

In his stock of unrenovated homes in the city and Baltimore County, some might see signs of decay. Politzer sees potential, a chance to stop the blight from spreading.

That's not to say the Pikesville landlord-turned-developer has embarked on an altruistic mission to save neighborhoods on the decline. But as a private builder carving a niche in affordable housing, he has found a measure of personal satisfaction in transforming a single house or a whole block.

Sellers know Politzer, president of Lucky Realty Homes Inc., as a buyer of houses few others want. Buyers know him through television and radio advertising blitzes as the broker with the layaway plan.

In Baltimore, the Department of Housing and Urban Development knows him as one of the largest purchasers of HUD homes -- properties the agency acquires when lenders foreclose on a federally insured mortgage. Lucky Realty, which now has 50 properties for sale, has sold more than 2,000 homes altogether -- 100 of them last year.

As he drove along Cottage Avenue in Pimlico recently, several tidy blocks of brick rowhouses faded into a rundown block marred by two boarded homes with overgrown yards. Sandwiched in between was a house Politzer bought 15 years ago, which he plans to sell now that a tenant has moved.

Even after he replaces the sidewalk and offers to paint the neighbors' homes, he faces a challenging sale unless the boarded homes are repaired. But he's willing to spend about $30,000 on renovations -- in hopes of selling the home for $54,000 -- because adjoining blocks have remained stable.

"There are good, viable neighborhoods that if left unattended, blocks like this will rot the neighborhood," said Politzer, surveying the peeling linoleum and ceiling cracks in his house.

Some of his finds have weathered the years well. Others are studies in neglect and abuse. When his crews finish gutting and rebuilding homes, they resemble new models in suburbia, selling for $50,000 to $125,000, with new windows, doors, roofs, heating and plumbing systems and updated kitchens and baths.

But unlike the new homes market, buyers first see the homes at their worst. Often, buyers sign contracts on unfinished homes, working with construction managers to customize the work.

The sight of her new duplex in Forest Park with chipped bathroom tile and stained carpeting didn't bother Tami Thompson, a single-mother and administrative assistant buying her first home.

"I saw the potential. I'm thrilled about this," Thompson said, taking the final walk-through before the start of renovations with construction manager Lew Frick and her 12-year-old daughter, Jade. "I can't see continuing to rent -- and I promised her a yard."

Growing up in Pikesville, Politzer didn't know much about fixing old houses. But while in law school in San Diego 28 years ago, he bought his first Baltimore investment property, with help from his father, a hardware store owner.

Soon after he returned to Baltimore to finish law school, he began buying investment properties in earnest. Between 1970 and 1975, he bought 251 Pimlico rowhouses.

He also forged ahead with his law career and discovered he relished doing income tax work. His practice grew; soon he represented about 300 small businesses.

By the mid-'70s, with his family growing along with his workload, he decided to dispose of the rental properties. His first move was to approach his tenants, many of whom had lived in the homes for years.

"I really wanted to see if they were interested in buying the house, so when I left they were not at the mercy of another landlord. I went and met with them. I said 'You're paying rent. I want to sell. If you want to buy, I'll help. I'm a lawyer. If your credit is bad, we'll fix it.' "

The homes needed major renovations to meet bank appraisals. Nobody, he was sure, would take him up on his offer. "You're talking about people who have no real reason to trust landlords," Politzer said.

But one after another of the tenants did. Many had waited 20 years to buy because "nobody ever offered to help," he recalled.

As the buyers' attorney, he negotiated with creditors, looked into financing and worked with real estate agents.

Using the same techniques he used in digging out information from his tax clients, he quizzed potential buyers for information to qualify them for loans. He questioned tenants who said they had no bank account and found they indeed saved in a credit union. He visited tenants and took note of live-in relatives who could co-sign for a loan.

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