While getting his degree in architecture and environmental design, Fernando Balli earned a C in architectural history. That is noteworthy because now, with Balli Property Group, he specializes in restoring historic architecture in Brownsville.
The turning point came when, after restoring a 1931 house on Palm Boulevard that backs onto Town Resaca, he and his wife decided that, instead of flipping it, they would make it their home. The striking residence now boasts a state historical marker and is featured in the new book “Brownsville Architecture: A Visual History.”
After college Balli had gone into commercial construction and then into real estate with his mother, Estelita Balli, later expanding into property management. Balli’s experience in building contemporary homes and business properties gave him the foundation for tackling and saving brick structures up to 150 years old.
But he didn’t go into building restoration alone. “Larry Lof has been my mentor. He’s sat at my side showing me everything,” Balli said of the region’s leading historic building conservator. “Pedro Rocha has been with me since day one as carpenter and artisan.” Designer Tina Bailey of Garbo/Bailey Designs has consulted on most of Balli’s restoration projects for the past 10 years. “I’ve had a lot of support and that’s what keeps me going.”
“When you are working with an older building with character, there is nothing like it. You never get tired of it,” Balli said. “The combination of technical skills and property management skills has helped. The mix makes the projects fun, profitable and exciting.” Beyond saving noteworthy, historic architecture, Balli aims to retain them as rental properties.
He buys aged properties, rarely in good condition, and undertakes restoration on spec, which is risky. “I have an investor who believes in me. That’s important because I can’t go to the bank and borrow money to buy an abandoned, deteriorated building. I show him my business plan, what I plan to do, how I think it will return our investment. He gives me a short-term bridge loan. When I get tenants in, I go to the bank and get a loan on the property to pay him off.”
The scenario has been repeated several times and more buildings like El Alamo store are undergoing restoration. “The way I have it calculated, if we can make a little bit, we should go ahead.” Balli said the quality of buildings’ workmanship and their history makes it worthwhile. They strive to make buildings look as original as possible.
“Trey Mendez and I are partnering on a casita. Our goal is to save the property. It’s about preserving an architectural piece. A little return on it is icing on the cake. People see you enjoy what you do and appreciate it.”
Balli Property Group recently completed restoring the 1860 Putegnat Building for the Putegnat family, and it is for lease. Of handmade bricks, the building’s 16-foot high interior reveals 2×16 wood joists that are 26 feet long. Originally a pharmacy known as J.L. Putegnat & Brother and Botica del Leon, it sold herbs, patent medicines and garden seed.
“Vacant building owners and potential property investors should consider that a rehabilitated property is likely to be worth more in value and appeal in 20 to 30 years as compared to demolishing a vacant building to build a new one,” he said.
A financial bonus for property owners comes when a building is declared a historical site. “If we get them listed as a Recorded Texas Historical Landmark, city and county property taxes are waived,” Balli said. “At the moment Local Primary Sites (historic sites recognized on the local level) pay 50-percent property tax.” Balli has secured PLS status for several properties. Restoration has increased the value of remarkable old buildings.
Balli has yet to apply for state or federal credits available for restoring a historical property, which involves complex limitations. “It seems really complicated – the effort and time it takes. I’m more of a person who says let’s get it done and start renting it.” But he doesn’t rule out that route for future projects.
“I probably would make more money doing only new commercial and residential construction,” said Balli, who has an MBA. He joked he should have gotten a degree in counseling since he often deals with couples building a house and referees their, um, discussions.