Peter Chrisopoulos is maneuvering his slate-gray Nissan Altima around the streets of South Baltimore, stopping and pointing at once-unusual sights. Look, there. And another around the corner. And a third across the street.
The star of this tour: home rehabilitations.
"Everything is getting worked on," says the longtime investor who is president of Homes By Express LLC.
The Baltimore region's unprecedented boom in housing prices has attracted unprecedented numbers of investors and rehabbers - many to the city, where plenty of homes in poor condition can be had.
In the late 1990s, there was one real estate investment club in the area and few members showed up. Now there are three, and they're all popular. The Mid-Atlantic Real Estate Investors Association alone draws more than 200 people to its monthly meetings at the Pikesville Hilton, where speakers discuss the finer points of financing, foreclosures and tax credits.
Why the upsurge? It's about low interest rates. It's about fast appreciation. And it's also about the stock market bust of 2000. Investors eager for something concrete to buy started looking at bricks and mortar, some of them following the siren call of investment-course commercials promising wealth for no money down.
The local investment community is a hodgepodge of people: full-timers and part-timers who buy to rehab, to rent or sell to other investors, or to do all three. Quite a few do not have real estate experience and left jobs in other industries, from hospitality to high finance, to become property entrepreneurs.
"There's been a huge boom and a lot more competition," said Alan Chantker, president of the Mid-Atlantic club, which was founded near the end of 2002 and is gaining 20 to 25 members every month.
So many investors are battling for homes at auctions in the suburbs that some joke that the winner is the loser, the price is bid up so high.
So many investors have jumped into long-overlooked neighborhoods in Baltimore that "people are buying houses in areas I didn't even want to drive through before," said Steve Cook, an investor/rehabber who works primarily in the Harford Road corridor.
And on top of that, people who just want a place to live are venturing into territory normally cornered by investors - like U.S. Department of Housing and Urban Development homes.
"People are willing to buy them and put sweat equity into them because the market's tight," said Chris Smith, a Columbia resident who invests full time in the Baltimore suburbs.
The infusion of private money into shabby housing is an important part of the reason the city is reviving, said Doug Austin, deputy commissioner of development for Baltimore's housing department.
"We need it in order for us to be successful," he said. "We figured that there is a need of probably $2- to $3 billion in public subsidy in order to solve the city's housing problems. ... We don't have anything close to that."
The city has a love-hate relationship with investors, though. Speculation during the real estate boom of the 1980s - particularly from out-of-town buyers who thought anything cheap was a deal - helped push the city into a real estate slump from which it only recently recovered.
What made matters worse was a spate of illegal flipping in the 1990s. Some investors conspired with mortgage brokers and others to trick people into buying property for much more than it was worth, and to trick lenders into handling the loans - generally falsifying documents to do it. The investors would buy and sell these homes quickly, with few or no repairs.
Low-income residents making their first foray out of renting were victimized. So were other investors, people hoping to be landlords.
But Baltimore officials say it's different now.
Though investment activity is way up, property flipping decreased almost 80 percent between 2000 and last year, according to the city's Flipping and Predatory Lending Task Force. There's a much bigger market now for fully renovated city homes - and the threat of jail time for deceptive sale practices.
Permits show that investors and homeowners rehabilitated about 17,500 residential properties in the city last fiscal year, a 40 percent increase from fiscal year 2002.
"Now you can hardly drive a block in Edmondson Village without seeing a truck out front with somebody renovating a house," said Ron Guy, 56, a local investor who has branched out from that once-ignored area because of increasing competition.
Seven years ago, Guy was a Baltimore insurance executive who thought real estate would be a good investment on the side. Then he came to work one day to find he had been reorganized out of his job, his entire division eliminated.
Shaken, he cleaned out his desk. He got into his car for the drive home to Ellicott City. And it struck him that the investment property he had recently bought in the city could be a career instead of a hobby.
"I'm not going back to work for a corporation," he decided. "I can make good money doing this."
There are lots of stories like Guy's. Smith, an engineer, found his job cut last fall as the once-high-flying Corvis Corp. hemorrhaged money. Cook owned a restaurant in Carroll County that went under, then went to work for a chain and discovered he'd much rather continue to be his own boss.
The work can be rewarding. Guy's income is higher now than it was in the insurance business, when he was making six figures, he said. But it's not necessarily easy.
He tries to rehab a dozen houses a year, so every month he needs to buy one property, manage the work on another and find a buyer for a finished product. When he walks through boarded-up purchases, he carries Mace and a flashlight, never sure if he'll come upon a wild animal or a squatter in the dark.
His sellers generally live elsewhere and have come to hate the rundown property. His buyers are usually single mothers who don't want to deal with fixer-uppers. He rents some of his rehabbed homes as well.
"There's a significant amount of uncertainty in it, so there are times when I briefly think, 'Boy, it would be nice if I was just getting a paycheck every two weeks,'" Guy said. "But ... I feel much more secure today than I ever felt as a corporate guy. ... One boss' opinion can get you booted out on your ear."
Chrisopoulos, 50, is a licensed electrical contractor who began rehabbing in Federal Hill in 1984. He has stuck with it as the name "Federal Hill" is applied to neighborhoods farther and farther into South Baltimore - and tastes get progressively more expensive.
Prices more than doubled in Federal Hill between 1999 and the first half of last year, to $370,000, according to the most recent statistics tracked by the nonprofit Live Baltimore.
Walking through a largely finished project on Light Street in November, Chrisopoulos points out the two-story addition, the spa-jet tub, the central intercom system, the recessed lights, the two fireplaces and the pile of hardwood flooring all ready to be installed. He leads the way to the new deck upstairs and gestures to the stadiums in view.
When he finishes the basement, he says, this rowhouse will be close to 3,000 square feet, bigger than the typical suburban home.
"This one, I'm going to ask about 465," he says.
Work on the house took longer to complete than expected, though, and the market kept rising, along with the price of materials. So four months later, he has just listed it - for $489,900.
A rowhouse he rehabbed on Patapsco Street in South Baltimore was a typical deal: Bought for $105,000 in July 2003 from a wholesale investor who had held it for six months. Financed at an interest rate of about 7 percent. Sold in November for $375,000.
In the 16 months in between, he said, he put about $150,000 into the rehab: first- and second-floor additions; a new third floor; two decks; new plumbing and electrical wiring; a two-car parking pad; and pricey interior touches such as granite countertops and stainless steel appliances.
Profit: about $95,000.
Some investors increase their profit margin with historic rehabilitation tax credits, though they can be difficult to get. Those who buy property and rent it to tenants get a tax break through depreciation - but rehabbers can find themselves hit with short-term capital gains taxes if they don't hold the property at least a year, said Bernard Leibtag, a tax partner with the local firm of Gorfine, Schiller & Gardyn.
Top-to-bottom rehabs can be just as good for a neighborhood as an investor, sending values shooting up as contractors introduce granite and marble to areas more familiar with Formica and vinyl.
is a prime example. It fell victim to illegal flipping in the 1990s, contributing to its downward spiral. Then came the Community Development Corp., a nonprofit formed to save the neighborhood by fixing up its old rowhouses. The for-profit rehabbers eventually followed.
By the first half of last year, the average price for homes around the park was $220,000 - quadruple the '99 sales tag.
"You wouldn't see this kind of dramatic change without them," Dahlia Kaminsky, the nonprofit's sales and marketing manager, said of the rehabbers.
Neighbors don't always like it, though. Some are irked by the trash and noise of the work. Some are overwhelmed by the increased property tax bill. And some look at the end result and cringe.
Federal Hill and other neighborhoods are working with the planning department to draft new rules about additions and renovations so that they blend with their surroundings. The Federal Hill Neighborhood Association finds that about half the renovation jobs are in keeping with the historic community.
Investors looking for good deals are appalled by the prices some newcomers are willing to pay, but most are making money while the region appreciates briskly. Buy a home in a popular area and you can make thousands of dollars just by holding it for a few months, they say.
The veterans shake their heads. They don't know whether housing is a bubble waiting to pop, but they're sure this sort of acceleration won't go on forever.
Interest rates will rise, economists say. Demand could fall. And what doesn't seem like risky speculation today might turn out to be, with clear-eyed hindsight.
"When real estate slows down, or people get the feel that it might be a bubble, or we see a correction in the market, more than half the people will be out in no time," Cook predicted. "A lot of people [are] investing on emotion."