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Despite troubled economy, these franchisees improved their business in 2008
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Todd Reid, Paul Barrow and Mike Hoff share their experiences during the "Most Improved Office" panel at Convention.
CONVENTION PHOTO GALLERY
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Just one day after the awards were handed out in Vegas, a panel of top franchisees shared tips about how they turned around their businesses. Panelists included: Michael Hoff of Corporate Properties in Denver, CO; Paul Barrow of Metro Properties in Denver, CO; and Todd Reid of Nosara in Atlanta, GA.
Here are highlights of what they shared:
…On business changes
Reid: “I joined a country club exclusively to find investors. And literally I was broke. But that’s where the investors are. That’s where they play golf. [Today] We want to have 20, what I call, ‘touches’ a week.”
Barrow: “The aha moment for us was a client coming to us and asking us if we could do everything for him. So we adapted the business model to say this is what we’re now selling--a turnkey investment opportunity.”
Hoff: “The biggest change for our business was the market and our ability to adapt to our market.”
…On tracking their numbers
Reid: “We greatly upgraded our accounting function. We went from having a bookkeeper to hiring a CPA as our CFO.”
…On rehabs, retails and rentals
Reid: “Renting a house to me is as good as selling a house.”
Barrow: “We over improve, especially for a rental property, for two reasons. A client, or ourselves, is going to own it for the next three to five years.”
Hoff: “The real value of HomeVestors is rental properties.”
Reid: “We don’t call them rentals. We call them new-home placebos. When you do that [upgrade the rehab], you get a better-quality renter.”
Hoff: “Every single house [we rehab] has stainless. It’s a no-brainer. The cost pales in comparison to the initial impression.”
Barrow: “We rent a property in a week as soon as our sign goes in the yard. It usually goes to the first person who sees it. It does pay in the long run to do better improvements now.”
Hoff: “You have to differentiate yourself in this market. And we stage our houses, too. Two totes for house. That’s it.”
Reid: “Everything we use to stage a house fits in the back of Lilian’s SUV.”
Hoff: “Our average days-on-market is 12 to 14 days in a market where it’s typically 90 days. Our upgrades are a little more. For 3 bedrooms/1 bath, our average fix is $26,000. We found that you can buy bank-owned homes at $70,000 or $80,000 or our complete remodel at $120,000. And ours sell, because people don’t want to do those upgrades.”
…On past goals and future goals
Reid: “We went from buying 39 houses to buying 112 houses and rehabbing 13 houses to rehabbing 100 houses. So, it was an incredibly stressful year. Our goal this next year is to have a more balanced life. We have the processes and systems in place. Now we just want to refine them.”
Barrow: “I worked way too hard. I want to scale back and utilize the systems more. I’m planning on more profit per transaction.”
Hoff: “Our goal was 42 buys, which turned into 72 buys. The most important thing is to maintain profitability per transaction. Three years ago we decided we needed fewer houses and more profitability. Hopefully we’re planning on selling another 50 homes next year.”
Reid: “Our goal was 72 houses. This next year, we have the same goal, but we’ll probably concentrate on more quality instead of quantity.”
Hoff: “All of us are looking for additional balance and a way to create more wealth on a stable basis.”
…On a final note
Hoff: “Be an investor first. You’re in this not to buy homes. You’re here to make a profit and create wealth. These guys [Reid and Barrow] are not great home buyers. These are good businessmen. When you focus on profits, when the market adjusts, you’re in a position to adjust with it.”
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