Rehab 'model' homes are emerging in Baltimore

There's a brick home in Highlandtown, on a prominent corner of Eastern Avenue, that has become a contradiction.

Parts of it are more than 100 years old — varying shades of brick and mortar show where additions have been hewn to the primary structure. Yet several weeks ago, a banner appeared on the side of the house announcing that it is a "Future Model Home."

The property is not what springs to mind when the phrase "model home" is uttered: new construction in a subdivision that will be re-created by a builder after a buyer commits to a homesite.

"It's an investment. Most guys are not going to do this, but we feel it is critical in order to pre-sell these homes," said Brooke Kaine, one half of the team behind Charm City Builders, which is among several developers bringing to Baltimore a new way of thinking about rehab sales.

Kaine and his partner, Tyler Banks, are putting hundreds of thousands of dollars into this house, in the hope that it will show prospective buyers their capabilities. When it is completed later this year, the top two floors will be finished and furnished like a model home and the lower level will be a sales and design center, where buyers can look through carpet samples and select bathroom fixtures.

The model homes of Charm City Builders and other companies, including Come Home Baltimore and City Life Builders, may signal a significant shift in the way refurbished rowhouses are marketed in Baltimore. Instead of purchasing a rehabbed home after the marble countertops are installed, a substantial number of Baltimore's rehab buyers could, in not too long, be able to choose an existing home as if it were a plot of land and wait for their "new" home to be completed.

"They're clearly being very innovative," said Stephen Melman, director of economic services for the National Association of Home Builders in Washington. He's never before heard of the model home approach to rehabbing, he said, but it should be received well by buyers because "there's nothing like walking through and kicking the tires."

That's why model homes started springing up in the first place, he said. There's only so much that glossy brochures and websites can do to convince people that a home is the right fit for their lifestyle, Melman said.

With a model home, buyers can walk through the property and get a feel for how they will interact with it, he said. Parents, for instance, can see how close their bedroom will be to the nursery.

"It also helps the builder work out the kinks" in a home plan and building process, Melman said. "It makes all the sense in the world to me," he said, noting that the NAHB does not maintain current data on the value of model homes for a business' bottom line.

Because the bones of the existing rowhouses that Charm City Builders is rehabbing vary in size and shape, the model will not be a carbon copy of the layout that buyers will get, Kaine said, but it should give people a pretty good sense of what to expect.

"There's only so many ways you can cut" Baltimore's traditional rowhouse for remodeled interior layouts, Kaine said. Their company, which sold two dozen homes in metro Baltimore last year, has figured out designs that maximize the use of space in these pre-existing structures, Banks said.

Homebuilding is a family business for Kaine, 62, whose father started a development company in Calvert County in 1951. Kaine's been building homes in Southern Maryland for decades, typically by buying undeveloped land — like cleared farm fields — cutting it up into plots and erecting new homes on those parcels.

"Models were integral" to that style of business, Kaine said. Model homes in subdivisions help people get a feel for both the home and the neighborhood, he said.

But as the profitability of suburban development in Southern Maryland decreased in recent years, Kaine started looking for new opportunities. He sees contemporary Baltimore as filled with the homebuilding prospects that were abundant in Southern Maryland years ago, he said. Kaine and his wife, who is originally from Pikesville, moved to Fells Point in 2011.

"We wanted a more urban experience," Kaine said, explaining that they were looking for a walkable lifestyle they couldn't get in Calvert County. Plus, he said, "I saw opportunity here. It's a different kind of building, but it's still building."

Kaine met Banks, 32, in the fall of 2010. Kaine was touring Baltimore neighborhoods and struck up a conversation with Banks, who was rehabbing a home on South Bouldin Street, not far from where their "future model home" is now. Banks, originally from Bucks County, Pa., and a Salisbury University graduate, started investing in Baltimore real estate shortly after getting out of college.

The two hit it off and joined forces. They started marketing their business under the banner of Charm City Builders this year and launched a website showing the properties across Baltimore that they're redoing.

Since they've been working together, they've pre-sold about 10 properties and sold many more finished rehabs, Banks said. This year, they expect to sell at least 35 houses, which are typically in the price range of $225,000 to $450,000.

The pair came up with the idea of putting up a model after visiting a home sales center in the Oliver neighborhood, where a company called Come Home Baltimore is rehabbing dozens of rowhouses in a concentrated area.