On November 27, 2004, at 1340 eastern standard time, a Mooney M20J, N2201, registered to a private owner, operating as a 14 CFR Part 91 instructional flight, collided with the ground and a fence during a short field takeoff from Statesville Regional Airport, Statesville, North Carolina. Visual meteorological conditions prevailed and no flight plan was filed. The airplane received substantial damage. The commercial pilot flight instructor, and the private pilot receiving instruction reported no injuries. The flight was originating from Statesville regional Airport, on November 27, 2004 at 1339. The flight instructor stated the private pilot was having problems with rotating the airplane when performing the soft field takeoff maneuver. The private pilot taxied out to runway 28 and completed the required takeoff checks and taxied into position for takeoff. The private pilot started the takeoff roll. When the airplane reached rotation speed the private pilot did not rotate the airplane. The flight instructor verbally informed the pilot to rotate the airplane. The pilot did not respond to the flight instructors instructions. The flight instructor pulled back on the control yoke and the airplane became airborne in a nose up attitude with both pilots on the on the flight controls. The flight instructor stated, "the airplane stalled and the left wing dropped down." The flight instructor verbally instructed the pilot to release the flight controls and he complied with his instructions. The flight instructor leveled the airplane as it collided with the ground off the left side of the runway. The airplane continued forward and collided with a fence before it came to a stop. When asked if the airplane had any mechanical problems before the accident the flight instructor stated no. He further stated, "the accident was his fault, he failed to exercise good cockpit resource management by not properly transferring the flight controls, resulting in the airspeed not being maintained when he pulled back on the control yoke."