By Krissah Williams
Washington Post Staff Writer
Saturday, February 11, 2006
When Lorena and Jose Teos came to Fairfax County from El Salvador in 1988, they were looking for work and political stability, not real estate.
It was enough to have a roof over their heads, even in a three-bedroom house shared by 15 people. Lorena found a minimum-wage job at Pizza Hut. Jose worked long hours assisting a carpet layer, who paid him $30 day. Since then, they have learned English, found better jobs and have become legal residents. They have also become successful real estate investors.
One recent evening, Lorena and Jose sat at the glass-topped kitchen table in their spacious five-bedroom house in a quiet Sterling neighborhood of $800,000 brick Colonials. It is the latest of five properties that the Teoses have bought in Northern Virginia, selling for profit along the way.
The Teoses and many other immigrants see their homes as the physical manifestation of the hope that they carried with them upon arrival in the United States. Home equity accounts for two-thirds of the average net worth of Hispanic households, studies show. According to 2000 Cenus data, 41.2 percent of Latin American immigrants own homes and other real estate, up from 38 percent in 1997.
In the Washington area, Latin immigrants have become active real estate investors with rental properties and well-thought-out strategies, said Jose Luis Semidey, president of the National Association of Hispanic Real Estate Professionals in Northern Virginia and of the Vienna real estate firm ERA Semidey & Associates. Last year, Semidey's company sold 900 homes; 90 percent of his clients were Latino.
"Our community has been changing, but people have not been realizing that. We are very entrepreneurial, with a lot of expendable income," Semidey said. "We are here. We are here to stay. We want to progress and to be successful."Trading Up
Lorena Teos has a two-story house, with plush carpeting, bay windows and a two-car garage, but she likes to reminisce about her family's thread-bare beginnings in Virginia.
"I had never lived with so many people in one room," Lorena said in Spanish. "We moved ahead little by little."
A list of the homes the family has owned is a record of the progress they have made. After a year of living with Jose's cousin in the cramped three-bedroom house, the couple moved into an apartment and then a house in Fairfax County. They shared those residences with Jose's four siblings. By 1992, Lorena and Jose had children and had saved enough money to buy their own place. They chose an $80,000 three-bedroom condominium in Falls Church.
As immigrants and first-time home buyers, their credit history consisted of a car they had bought for Lorena and a work van they had bought for Jose's burgeoning carpet-installing business. When the condo owner agreed to finance their loan, they gladly accepted her terms. She required a $10,000 down payment and charged them 9 percent interest.
But a fire in the laundry room soon rendered the unit unlivable. Unsure of the insurance coverage and wary of returning to the condo, the family turned the property over to the former owner two years later.
Their credit scarred, the couple began renting again. They sent money regularly to family in El Salvador and even bought two small apartments there for about $50,000 each. Relatives live in those homes.
Then in 1996, Jose heard a real estate agent on a Spanish-language radio station say that people with poor credit histories could still become U.S. home buyers.
He and Lorena went to a Hispanic-owned real estate firm and found a four-bedroom house in Sterling for $190,000. They used a mortgage broker affiliated with their real estate agent to connect them with a commercial bank, which required a 20 percent down payment and charged them a relatively high interest rate, which they say they don't recall exactly.
Two years later, the home's value had doubled.
The rapid jump in their wealth was impressive, Jose said, and they decided to sell and begin looking for a place in a new community. It's a strategy they have followed since then -- moving and buying new homes frequently. As prices around the region have continued an unprecedented climb, the family was able to build up equity for a few years, then cash out and move up to a larger, nicer house.
Their next home was a custom-built five-bedroom house in the Potomac Falls area of Sterling. They paid $480,000 for the place and two years later sold it for $550,000.
They used a portion of the profit from that sale to buy a five-bedroom house in a new development in Gainesville for $504,000.
But that wasn't working for them. "The traffic was just too bad," Lorena said of her commute from Gainesville. She works as an office administrator at a government consulting firm based in McLean. Jose started his own company six years ago, AMK Carpet Installers, and has three employees.
In 2003, they bought their current house in Sterling for $804,000 and began renting out the Gainesville property. They have followed news reports about the local housing market and believe prices in the Washington area are beginning to plateau. Thus, they plan to stay in this house for at least five years. They like their quiet street and friendly neighbors.
But they also intend to continue investing in real estate. Lorena is 39, and Jose is 44. He works 60 to 70 hours a week to maintain his busy carpet-installing business. They have begun talking about retiring in 10 years to South Carolina, where Lorena's sister and two of Jose's siblings live.
On a recent weekend trip down South, they spotted a community of new homes where they might like to build a house. They would rent the place out until they are ready to move again.
"It's more comfortable there," Lorena said, "and less expensive."A Family Tradition
Angel L. Ribulotta led a life of relative comfort in the scenic province of Entre Rios, Argentina. But in 1989, when he was 41, economic crisis and civil unrest were shaking his country. Along with his wife, Valentina, and their children, he fled to suburban Maryland.
In South America, Ribulotta was a manager for a pharmaceutical company. In Montgomery County, he was a man in search of a new profession. But he believed in the value of land. "My father always told me that the one who invests in homes always earns money. Always," Ribulotta said.
In the United States, he discovered, it didn't take long to enter the real estate business. Three months after immigrating, he took a course and soon joined a Rockville realty firm that specialized in selling to Spanish speakers.
As a real estate agent, Ribulotta has sold hundreds of homes. He also followed his father's advice and bought some property of his own. He purchased his first home for $91,000 in 1992. It was a three-bedroom duplex in Langley Park.
At the time, Ribulotta said, he and his wife had little credit history, but what they had was good: A Visa credit card paid on time and steady car insurance payments. He received a commercial bank loan that required only a 3 percent down payment and charged 8.5 percent interest.
The value of the house grew steadily. In 2001, when the Ribulottas and their two sons and daughter decided to open an Argentine restaurant in Rockville and a wholesale bakery in the District, that value served them well -- part of the start-up cost was financed by borrowing on the home equity they had built. The restaurant, called El Patio, serves traditional Argentine empanadas and barbecue.
Valentina and two of their children run the restaurant and a second location in Jessup. The family also owns the small commercial building in Northeast Washington that houses the bakery. They bought it in 2002 for $250,000. It is now valued at $500,000.
After starting the businesses, Angel continued in real estate, keeping abreast of strengthening neighborhoods. In 1995, he moved his family to a larger house in Wheaton and kept the Langley Park duplex as a rental property.
By 2005, the duplex had more than tripled in value and Ribulotta sold it for $300,000. That same year, he and Valentina decided to sell their family home in Wheaton and move to Silver Spring. The Wheaton house sold for $435,000. The Ribulottas bought a five-bedroom house in Silver Spring for $520,000.
"The extra rooms are to host our grandchildren," Valentina said -- there are five of them. The Ribulottas said their real estate investments are also about the future. "The properties we have now will fund our retirement in seven or eight years," Angel said.
And just as he followed his father's advice about the wisdom of real estate investment, his children are following his. They own their own homes and have begun to invest in other property, too.'Result of the Immigrant'
Pilar Perel came to the District in 1968 as a cook for the Uruguayan embassy. She planned to stay for a few years, then return home to Spain.
But one Thanksgiving Day, friends invited her over to celebrate what she thought was a strange American holiday. At the dinner, she met Zalman Perel. They fell in love, moved into a rental apartment on Connecticut Avenue and married.
Perel left the embassy and began her own company, cooking for wealthy individuals and catering parties. She built the company "mouth by mouth," she said. Her husband worked as a civil engineer.
"It was not easy," Perel said. "We were working very hard. I worked 15 hours a day in those days."
When their apartment was converted into a condominium in 1983, the Perels did not think they were ready to buy, so they looked for another rental nearby.
"We couldn't find anything close that allowed children," Perel said. So they came back to the landlord, who allowed them to buy the one-bedroom apartment for $38,000. Because they had been reliable tenants, the landlord assisted the family with financing.
The experience helped Perel develop confidence in the home-buying process. As their family grew, the Perels moved. In 1985, they decided to rent out the condominium and bought a three-bedroom house on Garrison Street in Northwest Washington for $180,000.
"We had some money saved because we are people who don't have much entertainment," Perel said. "We decide when we have children we don't know how to go to the [stock] market so we said 'we will buy property.' 'Property will always be there,' my husband said. . . . My husband always was thinking real property was better than the money market."
Zalman Perel died in 1998. Perel wears a gold medallion around her neck emblazoned with his photo. The properties they acquired together, which she still owns, holds memories of their life together.
Soon after buying their first single-family house on Garrison Street, the Perels decided to invest some of their savings in another property. They found a three-level rowhouse zoned for residential and commercial use in Columbia Heights, selling for $65,000. They could not get a bank loan because they had recently taken out a mortgage on their primary residence.
The owner of the Columbia Heights building, who was selling several properties on the block, agreed to finance it for them with a 15-year loan at 14 percent interest.
"I think maybe he thought we would not be able to pay it," Perel said. But, they bought the rowhouse outright in just eight years.
For the first year that the Perels owned the place, they tossed garbage, painted walls, repaired the water heater and changed windows. They did all the repairs that they could themselves.
"That's the way we make it," Perel said. Instead of paying someone, "we were doing our work and that is the result of the immigrant."
The building on Park Road became three units, with a store at street level and apartments in the basement and on the second level. The Perels were able to keep tenants in all three units despite drug trafficking on the block, Perel said.
Now the neighborhood is undergoing a resurgence. A block from Perel's rowhouse, a community development corporation and Grid Properties Inc. of New York are developing a 540,000-square-foot retail and entertainment complex. Target and Starbucks are expected to be among the stores there.
Perel said she would consider selling -- "If somebody comes and offers me good money." She thinks the property could be worth nearly $1 million soon, even though it was assessed at $225,230 in the District's latest evaluation A house about the same size as Perel's a few blocks away sold for more than half a million dollars. A condominium complex being built on the parcel across the street advertises starting prices in the mid-$300,000s.
She believes that the sale of the property will give her money to travel home to Spain more frequently and to fully fund her retirement, which she began last year after having both knees replaced. Perel now lives in a quiet Kensington neighborhood. Two years ago, she sold the house in Northwest for $560,000. She still owns the little condo that she bought for $38,000. It is now valued by the District at $381,490.Doing It Yourself Pays Off
Celso F. Pajuelo lives in Leesburg, in a neighborhood with vistas of the rolling hills off to the west. It is the home he dreamed of, complete with a curving staircase off the foyer, a side-loading garage and hardwood floors. But back in 1978 when he stepped onto an airplane in Lima, Peru, bound for New York City, he never imagined he would live in a place like this.
"We came to this country with empty pockets and in debt," Pajuelo said. He and his wife, Gladys, owned only the clothes they had on. They left the rest behind for family members.
Pajuelo worked odd jobs and then spent 15 years as a juvenile justice officer in New York. In 1990, he and Gladys found a three-family house in Brooklyn for $200,000. At the time, it was a lot of money, but Pajuelo planned to pay his mortgage by moving his family into one level of the three-unit house and renting out the other two.
Still, his lack of credit history in the United States made it hard for him to find a mortgage, so he paid a mortgage broker to negotiate one. Eventually, a commercial bank offered him a 30-year loan with an 9.5 percent interest rate. Pajuelo put $75,000 down because he did not know that he could buy a home with less cash.
For nearly 20 years, Pajuelo thought no more about buying real estate. Then his family began driving to Northern Virginia often to visit Gladys's brother. On one such visit in 1996, they met a Venezuelan real estate agent who convinced the Pajuelos that the real estate market in the Washington region was hot. They decided to buy investment property in Sterling, and found a townhouse there for $153,000.
Pajuelo said around that time his family began complaining about his long hours working for New York City. They urged him to retire and move the family to Northern Virginia, where the pace of life was slower. He kept the Brooklyn house, but moved the family south. In 1999, the Pajuelos bought a five-bedroom house in western Fairfax County for $200,000. They sold it three years later for $385,000.
"I spent $20,000 on the house, and I made $185,000 more," Pajuelo said. "The houses was going up, up, up, up."
Along the way, Pajuelo started a cleaning company named after his wife, Gladys Cleaning Services. He began by cleaning houses and then won commercial contracts.
While looking for their next home, the Pajuelos drove through Ashburn, Sterling and Leesburg every day after cleaning offices. Pajuelo said he spent weeks looking and was interested in several houses but "some Realtors, because of my color, because of my race, turned their heads. They asked, 'Are you pre-approved? Can you pay the mortgage?' "
Pajuelo took offense. "I'm pre-approved. Don't worry about it," he would reply.
After weeks of looking, he bought his current house in Leesburg for $580,000. As they always have, the family packed their own boxes and moved the furniture to their new home. Pajuelo also finished the basement himself. "Do it yourself and save money," he said.
Pajuelo still owns the three-family house in Brooklyn. It's now worth $850,000, he said. And the townhouse in Sterling is worth $475,000.
"I never dreamed I would have so much equity," he said. "I work hard and my wife work hard for this house."