How an investor plans to flip a low-income Charlotte neighborhood, double rents and make millions
The J.T. Williams neighborhood in north Charlotte already looks much different than it did a month ago.
The small brick homes have been painted white, the parking lot has been paved, and workers have spread fresh mulch and planted small shrubs.
The biggest difference, however, is the emptiness. Homes that once held families, friends and individuals who were able to afford the cheap rent now sit empty. The parking lot is quiet, with a dwindling number of cars, and the basketball hoop in the middle of Pryor Avenue, once the center of the small community, is unused.
The few remaining residents are struggling to find new homes. That's because the community was purchased in June by investors who began telling residents to move out so they could make over the community and raise rents by as much as double.
It's the latest Charlotte neighborhood to experience a mass displacement after getting bought up by investors.
WFAE reporter Nick de la Canal has been covering the story and joined WFAE's Chris Jones to share more information about the new owners of the J.T. Williams neighborhood — and the money they expect to make. You can listen to their conversation above, or read the text below.
CHRIS JONES: So catch us up on the situation here. What’s happening in this neighborhood, and why are residents getting pushed out?
NICK DE LA CANAL: Yeah sure. This is a low-income neighborhood a few miles north of uptown Charlotte off Statesville Avenue. There are 103 homes — a lot of them are small one or two bedrooms. About a dozen are townhomes.
And the people who’ve been living here are who we’d call the working class. They’re paying between $650 and $750 a month in rent. That’s about half the median rent in Charlotte.
They’re working at the airport, or in hotels, or as cashiers. A lot of kids live here and go to nearby schools.
But over the summer, some new owners purchased this rental community, and in September, they began telling residents to leave. That’s because they plan to renovate the homes, fix them up and nearly double the rent.
JONES: This situation is happening a lot in Charlotte, right?
DE LA CANAL: Yes. Investors actually call this a “value add” deal. This is when they purchase a cheaper, older apartment complex or rental community, renovate it, and then raise the rent.
Chuck McShane, with CoStar Group, said investors have bid up the price for older apartments in Charlotte, from $65,000 per unit in 2016 to $139,000 per unit today. That’s a huge increase, and it’s fueling higher rents.
And these deals can be very profitable for investors, but devastating for the residents, who are pushed out of their homes with very few other options.
JONES: What do we know about the investors involved in this deal in the J.T. Williams neighborhood?
DE LA CANAL: We know there’s a group and the man who appears to be the lead investor is Javier Hinojo Jr.
He’s kind of this flashy, self-promoting real estate guy who has pictures of himself with stacks of money on his social media. He also posted a video of himself dancing as money rains down around him after purchasing this community in June.
He’s actually dancing in front of a picture of the J.T. Williams neighborhood on, like, a mock Forbes magazine cover.
And last month, he also posted this 8-and-a-half-minute YouTube video in which he explains his plan for the neighborhood.
JAVIER HINOJO JR: All right, I’m standing here in front of 103 units in Charlotte, North Carolina, that I just bought.
He talks about how the neighborhood cost $8.5 million, and he comments on the appearance of the homes.
HINOJO JR: You walk in, you might get a little nervous because it looks ugly, dirty, but once we’re done with them, they’re gonna look really, really nice.
He says they’re going to spend up to $4 million fixing up the homes. That includes renovating the interiors and doing things like repaving the parking lot and putting in landscaping. And then…
HINOJO JR: We’re gonna double the rents. Right? They’re $600 now. We’re gonna get $1,200, $1,400 plus on these properties.
And he says he and his investors could make up to $10 million. It’s only toward the end of the video that he mentions the people living in the homes behind him.
HINOJO JR: Of course, you’re gonna tell the current tenants, hey, we got some new units coming up at a higher rent, would you like to move over? And if they qualify, perfect, you move them right over. Easy, easy process, right?
And if they don’t qualify, he says, they’ll have to move. The reality of this, however, is many of the current residents won’t qualify for these newly doubled rents, so it creates a mass displacement.
JONES: Have you heard from him or other investors since you began your reporting?
DE LA CANAL: I reached out to Hinojo, but didn't get a response by yesterday evening. In general, investors like him say they're putting their money and time into properties that need extensive renovations, and those properties might otherwise fall into disrepair and become uninhabitable.
JONES: And what have you heard from residents?
DE LA CANAL: A range of emotions. I’ve heard sadness and fear from a resident who takes the bus to and from work and doesn’t know how she can move or find a new place without a car.
I’ve heard anger from a woman who said she sees this as investors pushing poor Black people out of their homes for a profit.
And I’ve heard from single parents like April Moses who says she can’t find another place for her family on her income as a hotel housekeeper. She thinks this is wrong.
APRIL MOSES: You just can’t kick nobody out they house like that. Especially if they been paying rent and they don’t have no reason why you kicking them out. It’s not right.
By the way, she told the property manager she would move out by December 3. With one day left, she still hasn't found a place, and says she’ll likely have to move herself, her mother and her three kids into a hotel — and that’s not ideal for three kids in the middle of the school year.
JONES: What do you think the solution is here? Is there anything the city can do?
DE LA CANAL: Well, in the short term, some local nonprofits are pledging to help these residents pay security deposits and up to three months' rent at a new apartment, or three months at a hotel.
The nonprofits acknowledge these residents will struggle to find new homes in the same price range, and many will have to move in with family or friends, or to a hotel.
The new property management company, Trademark Residential, has given residents flexibility with move-out dates.
In the long term, it’s hard to know what the right solution is here. These investors aren’t doing anything illegal, although these displacements are a concern.
The North Carolina legislature has banned cities and towns from enacting rent control and mandating affordable housing, which advocates say could help. Any change would have to come from state lawmakers.
Major support for WFAE's Race & Equity Team comes from Novant Health and Wells Fargo.