The three-story home near Amherst and America streets has been transformed from an eyesore to a posterchild for renovations coming to Charleston's East Side neighborhood.
At a glance
What: Charleston-based real estate firm Luxury Simplified is restoring dilapidated homes in the city's East Side and Elliottborough neighborhoods. The group is seeking accredited investors.
How: Luxury Simplified has teamed with BridgePointe Capital Markets for debt funding to increase the speed and scope of projects in neighborhoods like the East Side.
Why: Officials say the community-source funding keeps money local and helps revitalize neighborhoods.
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The vacant green and brown structure at 31 Amherst St. was riddled with termite and water damage, missing windows and other problems before local investment firm Luxury Simplified acquired the space for $44,626 in 2013.
Today, the house has undergone a ground-to-ceiling restoration, transforming the lower level into an office space and the upper-level into a two-bedroom apartment.
The lower level will serve as the future headquarters for the construction-renovation arm of Luxury Simplified Group, a downtown Charleston-based firm that restores and then rents older properties in the city.
Luxury Simplified's owners have used the restoration concept since 2006 to invest in the city's East Side and Elliottborough neighborhoods. The firm says it is now looking to fast-forward such efforts with the help of new investors and by locating the renovation office in the middle of a neighborhood it's targeting for projects.
"We want to be a part of this area, and that's why our key office is here," said Chris Leigh-Jones, a Wales native who established Luxury Simplified in 2012.
The group is also looking to tap into funds from so-called accredited local investors, Leigh-Jones added. Those backers must meet certain net-worth requirements, such as a minimum of $200,000 in yearly income.
The initiative, called community-source funding - similar to crowd-source funding - collects finances from backers.
Luxury Simplified is teaming with BridgePointe Capital Markets to seek debt funding to increase the scope of the restorations in neighborhoods such as the East Side.
"We want to give local investors an opportunity to be a part of it," said John Osborne, a business development agent at BridgePointe.
The initiative is aiming for local residents who would have a vested interest in seeing the neighborhoods improve.
"What we want to do with the advent of a source funding is instead of reaching outside of Charleston, going to those in New York, Philadelphia and Chicago, we want to reach a qualified investor in the community to keep the money local," Leigh-Jones said.
The goal is to restore homes, including some of the city's iconic Freedman's cottages, structures that date as far back as the 19th century and housed freed slaves after the Civil War.
Charleston City Councilman Robert Mitchell, who represents the East Side, said fixing up homes is good for the neighborhood but that it can have a downside.
"You are seeing the neighborhood elevated to a certain point, but on the other hand you are hurting the people living next to the homes being fixed up because it could drive up their property values and taxes, and they might have to sell their homes, or the house might need so much work because they can't afford to fix it up that it might be condemned. If that happens, the older residents lose out."
Mitchell added, "It's a concern of mine, but how can I stop it? Anyone can purchase a home."
Luxury Simplified's strategy typically includes a three-year period of acquisition, restoration and rental of the property. Afterward, the proper- ty is mortgaged, releasing funds for future projects or to be returned to investors, officials said.
The group is also planning to build several homes on an acquired tract near America Street and Hampden Court.
Similar investor-backed revitalization programs have popped up around the state, including in Greenville, said Elaine Worzala, director of the College of Charleston's Carter Real Estate Center.
"If they can get a fund for a substantial amount of the area, it's more likely to take hold," she said. "Doing it one-off will take longer, so it's better if they can get a pool of funds to literally buy a bunch of homes and turn them around much quicker, and that makes everything much more valuable."
The home at 31 Amherst, built in the mid-1800s, marks one of the latest restoration projects for Luxury Simplified.
The $175,000 budgeted for the six-month renovation of the structure included restoring and reusing some existing parts of the property. For instance, wood in the attic will be used for some exterior siding.
The building's fireplace was restored and the upper level was conditioned with hardwood floors, stainless steel appliances and a loft area.
"We try to keep the look and feel of the area. ... When you go into an area, you don't want to lose the reason why you liked it to start with," Leigh-Jones said.
The Luxury Simplified group has completed 40 renovation projects already. The company said it has roughly a half-dozen projects going at one time and $15 million of capital invested in current projects.
The community-based funding is intended to introduce a new class of investors in the city, officials said.
"These people who are investing in this opportunity have a knowledge base of what is going on here, and they are helping shape growth of their community," he said. "They get to see that the community builds and they get to benefit from the financial upside of it happening."
This marks one of the latest rehabilitation programs in the East Side.
In 2012, the Preservation Society of Charleston launched a program to buy dilapidated homes in the neighborhood, salvage and resell to first-time homebuyers. The program, the Charleston Vernacular Revolving Fund, is part of the society's "Seven to Save" list, which was unveiled last year and focuses on endangered sites.
Reach Tyrone Richardson at 937-5550 and follow him on Twitter @tyrichardsonPC.