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Show Summary
In this conversation, Greg Bennett discusses the innovative model of pre-sale renovations where homeowners can pay for renovations at closing. He explains the process, the importance of curb appeal, and how market trends are shifting towards homes that require less work. Greg shares insights on scaling renovation projects, the significance of working with reliable crews, and offers advice for first-time rehabbers looking to enter the real estate market.
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Investor Fuel Show Transcript:
Greg Bennett (00:00)
Well, that’s the million dollar question because you’re only as good as your crews. And I tell you, I tell this audience, I tell anybody that we had to kiss a whole lot of frogs to find our princess because you you’re gonna, you get a bad crew and there’s not much you can do about it. I like to find the crews that have multiple trades that can handle everything. Where we’ve got one crew, they run, they’ve got their electrician, their plumber, ⁓ their tile guy, those things.Dylan Silver (02:00)
Hey folks, welcome back to the show. Today’s guest is based in the greater Atlanta area and helps homeowners get top dollar by handling pre-sale renovations with payment due at closing. Please welcome Greg Bennett. Greg, welcome to the show.Greg Bennett (02:17)
Thanks for having me. appreciate you. Thank you.Dylan Silver (02:20)
It’s great to have you on here, Greg, and it’s a very interesting type of transaction to talk about. Pay at closing pre-sale renovations. I was actually totally unfamiliar that this was something that goes on. Walk me through it.Greg Bennett (02:35)
Okay, well it’s exactly what it sounds like. It’s pay at closing. First and foremost, there’s no credit check, there’s no credit requirements. There is a requirement that the homeowner have equity in the property and we secure it by using a UCC lien to secure our investment. We come in and do whatever is necessary to get the home top dollar. We go from the curb back, but I would say 75, 80 % is deferred maintenance type.new flooring, new paint, countertops, things like that. ⁓ And we allow the homeowner to rather than sell it for less and especially in this market, if you think about this market right now, it’s gotten a little crazy. You got to win a beauty contest and you got to win a prize for it. you got to stand out in the competition. You got to go out there and do some things. So we allow the homeowner to do that work. A lot of homeowners don’t even have the resources or they don’t have the know-how to
bring a company in to do all of that work. So we come in and we do everything. We basically do see it from start to finish, curve back, and postpone that payment until the house sells.
Dylan Silver (03:45)
I’m curious, how do folks get in touch with you? Is it a lot of word of mouth? Is it through realtors? Or are people in Greater Atlanta generally aware that they have this option?Greg Bennett (03:56)
Well, that’s a great question. ⁓ It started out strictly through Realtors. We belong to a lot of Realtor groups. We do a lot of lunch and learns, know, promotions and things like that. So we built up that reputation where we get a lot of the referral business, but now the market has changed a little bit. We do have a web presence and they do find this online for the pre-sale renovators. So we’ll get a direct homeowner that will give us a call.we require that they work with a realtor. If they don’t have a realtor, we’ll refer them to some realtors that we work with, which is a great lead source for them. However, most of the time, ⁓ if they don’t have a realtor, they have to have a realtor. That’s part of our contractual obligation. It has to be listed with the FMLS, and it has to have a
Dylan Silver (04:39)
One of the things that I mentioned to you before hopping on here, Greg, was before I became a realtor myself licensed in Texas, I was working with a lot of fix and flippers. And then I realized over time, it seemed some of that market was drying up because people really wanted newer or like new homes. And what’s interesting about the type of deals that you’re involved in is I’m sure you’re seeing that as well. The homes that are needing more TLC, that are needing moreYou mentioned deferred maintenance, right? And they’re not getting done. They’re selling for less, they’re taking longer to sell. And so really the market in many locations, Greater Atlanta, Texas, is demanding that folks sell homes that are like new.
Greg Bennett (06:10)
Yes, yes, we’re finding that to be more and more true. ⁓ In fact, it’s on our phone is when the market kind of went down a little bit, know, pricing drop and it kind of slowed down. Our numbers went up. Our phone is ringing off the hook because ⁓ everybody realizes that you do actually need to go ahead and get that paint. You do need to go ahead and change those for us. Nobody wants to move into a house and have to do all of that. I don’t know if it’s generational or if it’swhat drives that other than most people just want to buy the home, set the furniture down and go do their thing. And so they’re going to set and you’re going to get, know, if you haven’t done the things that need to be done to upgrade your house to get it market ready, the house is going to set and it’s going to sell for less. And that’s a fact.
Dylan Silver (06:57)
I want to ask you about getting into this space because as someone who’s worked with lot of investors, fix and flip, right? It’s a different arena, but it’s maybe similar and related in some sense. There’s risk in fix and flip. I can imagine when you’re taking payment at closing, there may be some risk as well, of course. When you were first getting into this space, how did you have the idea for the deferred payments at closing? And then also how has your underwriting process either stayed the same or changed over time?Greg Bennett (07:25)
Great, that’s a great question. When we first started this, it’s actually a friend of mine, his name is Dave Booth. He’s a retired police officer, funny story about him. But anyway, he’s a retired police officer. He went and got his real estate license and he said, you know, if we could have some kind of program that would allow us to get these properties fixed and let them postpone payment, we would just blow the market up. because there was nothing out there at the time, there’s a few companies that do it.there was nothing and so we went and just put together through trial and error a lot of a lot of bumps in the road learning what to do what not to do and we put this program together as far as the underwriting criteria is concerned there is no credit there is no down payment they do we are we do require them two things that they have equity in the home and we like to go with a 70 % of after repair value that that’s where we want to be
and we require that they be caught up on their mortgage. So those are the two things. And then we secure our work with a UCC lien that allows us to secure that, whatever that would be.
Dylan Silver (08:37)
I want to ask you about, know, each home is going to be different, right? Each home is going to need a specific amount of work. When the homeowners are coming to you, when they’re reaching out to you, either through a realtor or through a referral, and they’re saying, we want these things done. Maybe it’s new ⁓ countertops, new roof flooring, hey, we need foundation, any type of ⁓ maintenance that could come up, right? And you’re looking at it you’re saying,In order for us to be secure, may actually need to do more than that because we know kind of what, or not kind of, we know exactly what is going to be necessary in order to command top dollar. Are you seeing a lot of that where you’re actually doing sometimes more than what homeowners are requesting because you know, hey, this is what it’s gonna take to get it to the conditions where the market is at.
Greg Bennett (09:24)
Yes, nine out of ten times that’s going to be the case. A lot of times what we prefer is that we work directly with the realtor through the realtor with the homeowner. The realtor is not emotionally attached to the homeowner. The homeowner may be emotionally attached. And so a lot of times you get into that and what we like to do is we have, I wouldn’t want to say it’s cookie cutter, but there are items that work and items that don’t. You know that if you do this or do that it’s going to get top dollar. Whereas sometimes you’ll seea homeowner that will want something done like, you they want to upgrade their closet because they need more closets. It’s not necessarily bringing more dollars and cents. And they’re emotionally attached to it. So, I you understand that they’ve been there, you know, depending on what their situation is and why they’re selling, you can understand that. But if the realtor stays involved, the most successful projects that we have is around, we run through realtors and they
it.
Dylan Silver (10:52)
I mean, from what I’ve seen, and I can only speak for Texas, you’ve got the kitchen, you’ve got the master bathroom, and then you’ve got, I would say, just general, the face of the home, right? And those three things are really the driving factors as far as what I can tell. Is that a lot of what you’re looking at as well, or are there some other things that are of great interest when you’re looking at doing these rehabs?Greg Bennett (11:19)
Very much so, still kitchens and baths, sell homes, that hasn’t changed. However, curb appeals, you have to have that curb appeal because remember, most of your decisions are made online. They’re shopping and scrolling and if you don’t have curb appeal, then it’s gonna pass you by. So you gotta have some curb appeal in there too. So we’re putting a heavy emphasis on curb appeal. Kitchens and baths, that’s never gonna change. That’s what sells the, ultimately is what sells the house. And then just upgrade, new paint, new flooring.We do a lot of LVP. We’re doing a ton of LVP floors. Whereas when we first started, it was probably 50-50 carpet in LVP. Now it’s pretty much just LVP. And that seems to be an upgrade in performance.
Dylan Silver (12:02)
I want to askyou about ⁓ decades and specific year of homes. there a sweet spot where you would say, if someone bought a home in this year, then it’s still going to be in good enough condition where they’re not going to need like a roof to studs gut or they’re not going to have some big issues. But at the same point in time,
⁓ they will be able to do ⁓ a relatively manageable rehab and see top dollar or is it a specific decade where you say well in this you start seeing problems whether it’s the 50s 40s or what have you.
Greg Bennett (12:35)
Well, you know, that’s great. That’s a good question. We just rehabbed one that was six years old, but it was lived in very hard, very hard, you know, new floors, new paint ⁓ and a lot of pet damage. had pets. So that’s, you know, that’s we get a lot of that. And then you get the ⁓ the fun ones I call them because those are the ones I like. I like the older homes that we could bring up today. Those are the ones that before and afters are so beautiful. You know, youlook at this, we may actually go in and recommend that we move a wall open up for open space concept. And we do some of that because the neighborhood dictates the area dictates and you can just go pull cons. I wouldn’t say it’s the way that the houses have been lived in a treated and taken care of. Obviously, you know, if they’re if they have a lot of animals and there’s going to be some damage, things like that. So we do a lot of that.
Dylan Silver (13:16)
Okay.I do want to pivot a bit here, Greg, and ask you about doing this at scale, right? Because I know ⁓ working with fix and flippers, it can be challenging to manage multiple jobs and contractors and deadlines and so on and so forth. When you’re doing this with folks that are trying to sell their home, and it’s a third party, right? There’s, of course, an increased responsibility, increased concern, and then having multiple of these ⁓ going on concurrently.
When you were scaling in the initial stages, how did that process ⁓ evolve? And then also, what advice would you have for folks who may be looking at either doing multiple flips of their own or for other people concurrently?
Greg Bennett (14:06)
Well, that’s the million dollar question because you’re only as good as your crews. And I tell you, I tell this audience, I tell anybody that we had to kiss a whole lot of frogs to find our princess because you you’re gonna, you get a bad crew and there’s not much you can do about it. I like to find the crews that have multiple trades that can handle everything. Where we’ve got one crew, they run, they’ve got their electrician, their plumber, ⁓ their tile guy, those things.That’s what’s been successful for us. It allows them to get in and get out because remember time is everything too. If we got a six month project, realtor’s not gonna come to you anymore. So we gotta turn. So we try to turn on average, we try to turn in volume per house. I like to give it about a $2,500 a day turn time for retail price. That’s typically what it works out to be. a 10 day project, a $25,000 project is gonna take 10.
Dylan Silver (15:47)
I do want to ask you maybe a niche question related to Atlanta and I’m actually a little bit unfamiliar with the seasons in Atlanta. can speak for Texas. Texas, you’ve got some areas which will have all four seasons, then you’ll have some which won’t see any snow. when I think of real estate, of course there is a seasonality to it. But then if you’re also adding a rehab to it, people have to plan in advance.Is there like an ideal time frame for folks who are thinking of doing a rehab to reach out to you? Is it January? Because then it’ll be ready by, you know, March time frame. Is there an ideal time frame?
Greg Bennett (16:24)
The only thing that I could say here for Atlanta, we also have the four seasons. The weather can be a concern if you have a lot of exterior repairs in the winter months. You do get some shutdown days here, not as much, but you do get some. I think it’s more selling season being ready to go on the market. go in the spring, which is what that’s your best time to sell a house. People are moving because of those kids and the change in location, school districts and stuff like that. But since we’ve started this,I haven’t noticed that the season will change. We stay pretty consistent throughout the whole process. Maybe a little bit more in the spring, but not that much more. It’s just pretty consistent.
Dylan Silver (17:03)
do want to ask you about rehabbing in general and for folks who may be ⁓ taking a look at getting into real estate investing, whether it’s ⁓ with themselves or with partners and they’re looking at doing their first rehab and they’re should I go for a big rehab? I go for something where it’s going to be just a little bit of a touch up? ⁓ And your experience based on that, how might you guide folks if they’re looking at doing their first rehab?Greg Bennett (17:31)
They’re first doing their first rehab and I’m assuming if they’re gonna be, they own the house and they’re flipping it for themselves. Is that the question that we’re asking? If I was doing my first rehab, I wouldn’t wanna stick with the basics, the paint boring countertops kind of thing. Once you get into the moving the walls and the electrical and the this and the that, you’ve got in specialties and those can set you back.Dylan Silver (17:37)
Yeah.Greg Bennett (17:55)
Flip a few ⁓ that you can get in and just do the basic upgrades, know, just deferred maintenance type items. Get your feet wet. Get your crews underneath you. Start working with your crews and then understand from there. Because like I said, crews are everything. No matter what I say and do, if we’ve got a bad crew, it’s going to reflect, it’s going to be a problem, and it’s going to be a delay. that’s nobody wants that.Dylan Silver (18:20)
Greg, we are coming up on time here. Where can folks go if they’re in the greater Atlanta area and they’d like to reach out to you and maybe that they’ve got a home that needs some rehab before listing?Greg Bennett (18:30)
That’s great. ⁓ We could go to RENOMAXPros.com, www.R-E-N-O-M-A-X-P-R-O-S.com and they can get all the information they need on the website or they could just give us a call. The phone number is on there. I got a partner, Chris. She’s the looker of the, you know, she’s the brain trust behind this, but she’s also very organized and she will get you set up and.What we like to do is come out and give a scope and does it cost anything to look and you can get an idea of what it would take. I will say this, a lot of people ask, how do you make money? How we make money is we base our pricing on insurance reimbursement pricing. if a tree were to fall on a house and have the damage, our prices are based off of what that insurance company would reimburse. That’s how we get our number.
Dylan Silver (19:19)
Greg, thank you so much for coming on the show here today.Greg Bennett (19:22)
Thanksfor having me, Dylan. I appreciate it.
