- 29 March, 2006 -

When friends and business partners Minas Litos and Adrian Tartareanu look at the blighted homes in Gary, they see potential. "Why not Gary?" Tartareanu asks. "That should be our motto," Litos added. The two are co-owners of Red Brick Investment Properties LLC, a real estate investment firm that purchases, renovates and resells single-family homes in Lake County. Red Brick is a franchise of Dallas-based HomeVestors of America Inc., which advertises under the banner of "Ug buys ugly houses." Litos says he and Tartareanu focus on Lake County, and in particular Gary, because the area has more than its share of "ugly" homes they want to turn into beautiful homes. "We are bullish on Lake County," Litos says. "We feel that Lake County is well-positioned to grow." As people funnel from Illinois' southern suburbs into Northwest Indiana, the men believe if they are able to offer renovated homes at fair prices, Lake County will be their destination. That strategy has paid off for the businessmen, who in a short six months have climbed the ranks of the 250 HomeVestors franchises nationwide to the No. 1 position. "We had a lot of things going for us. One, we had experience under our belt unlike most of the franchisees. Then we also had financial backing behind us," Litos says. John Hayes, HomeVestors CEO, agrees that Red Brick is a well-organized corporation, helping the men rise to the top so quickly. While Hayes says it's not unique that a franchise in the HomeVestors organization becomes successful, it is unusual to see a franchisee come on so strong, so quickly. "It takes a certain style to succeed in this business," Hayes says, adding that Litas has the people skills, ambition and drive that allow him to be successful. Being financially strong as a franchise has enabled Red Brick to spend the money on advertising it needs to generate leads, and then purchase the homes those leads identify. Litos and Tartareanu have been working together on remodeling investment properties for a little more than two years, after a chance meeting on a soccer field in 2001 brought them together. Tartareanu, a professional soccer player in his native Romania, emigrated to the region in 1999 in search of the better lifestyle the American dream promises. He joined a team in the Northwest Indiana Soccer League. He met Litos, an American-born Greek, who was raised in his family's homeland and had been living in Lake County for almost 20 years at the time. A soccer enthusiast himself, the two were on the same team. The duo soon discovered they had much in common. Tartareanu was remodeling homes as an investment, while Litos was an investor financier, rehabilitating houses through subcontractors. After a while, the pair decided to try and remodel a few homes together. "We did, and everything went well," Litos says. In August 2004, they formed Red Brick. They decided to add the HomeVestors banner last year after reviewing their business plan and deciding the franchise might help them grow the business at a better pace. "We felt it was worth the large investment we made to join the group," Tartareanu says. Along with the $40,000 franchise fee, franchisees are expected to pay into advertising funds that keep the "Ug" billboards and television commercials coming. So far, the two say that investment has paid off. Homes are selected by Tartareanu, who takes the leads generated by HomeVestors' "Ug" billboards and commercials, inspects the property to determine if it meets their criteria for a remodel and then makes an offer to the owner. Using four crews of five men, Red Brick renovates eight to 10 homes each month. This is double the number they tackled before joining HomeVestors. Each crew is able to turn a home around in two six-day workweeks, and repairs to these homes are far more extensive than just cleaning up and painting. An experienced foreman guides the crews in completely gutting each home purchased. Typical enhancements include upgraded plumbing, electrical and roofing. Cosmetic improvements include new cabinetry, fixtures and flooring. Litos says that while it may be more costly on the material side to gut the home, the money and time saved on the labor end of the remodel makes it worthwhile. Once the crews complete the remodel, that home goes on the market for resale. Litos and Tartareanu don't view their business opportunity as just a chance to make a buck. "For the longest time we saw northern Lake County go through some hard times," Litos says. Looking at Gary, he sees the potential for the investment there to bring the community back to its glory days. The duo is working to coordinate their business activities with the redevelopment efforts of the city of Gary. They are working with the Gary Community Development Department to offer $1,000 to first-time homebuyers who complete the city's down payment assistance program and purchase a home from HomeVestors. The company also has joined the Gary Chamber of Commerce and is participating in the Gary Empowerment Zone's Business Opportunity Expo on May 4. Letty Almodovar, director for the Gary Department of Community Development, says her department has been in discussions with Red Brick about creating a program that would provide down-payment assistance to households whose income is above the 80 percent market rate cut-off for the department's current assistance program. Almodovar would like to see the program target certain areas of the city in need of redevelopment. "There is a lot of potential here, especially with the restoration and renovation of a lot of the older homes," she says. "You couldn't build homes like this and keep the cost affordable for the average buyer." Almodovar says the redevelopment of abandoned homes in the city can be a boon toward redevelopment. She is looking forward to seeing how the company's plans to target 60 to 100 homes this year will turn out. "Clearly any community would rather have homes that are restored and made useful by those individuals who wish to purchase them as their homes as opposed to homes that are abandoned," she says. "We definitely like that part of it."

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