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One local outfit proves turning over houses in D.C. is not a dream deferred.
Express Homebuyers has a set formula to flipping houses in D.C. “Plus or minus, we have the same color on the walls, white trim, hardwood floors wherever we can, we put in new windows,” says company founder and co-owner Jud Allen. “We stage all our properties.”
His company is like the Starbucks of home-flippers: From Deanwood to Brookland to Columbia Heights, the product’s pretty much identical.
Today, Allen’s leading a tour of 230 Randolph Place NE in Eckington. In the living room, there’s a square tan sofa with some green and red pillows. It’s sat in roughly 25 houses.
Allen wants to sell quickly, so he can move this model furniture to his next renovated property. In an era when even HGTV and TLC are having trouble sustaining shows about house-flipping, Express Homebuyers is still at it—successfully. In 2007, Express sold roughly 100 properties. Last year, it sold 80. In 2009, the projected number is 130.
On average, the company makes about $35,000 to $40,000 per sale after construction costs are removed, but not before office costs are taken out, says Allen. So the take isn’t as huge as it might have been in, say, 2006, but there are several properties in play.
A minute up the road from Randolph Place, Allen’s got another renovation job in process; he’s also got a townhouse off North Capitol Street in Bloomingdale in the rehab phase. His Eckington row house is pristine, though not terribly fancy. Then again, neither is the neighborhood, and the price-tag matches: The home listed at $349,955, about average for the neighborhood, in mid-March.
“There’s some balance of a fair price, and getting the house gone,” says Allen. Reflecting on a recent $350,000 sale in Park View, he muses, “Could we have gotten another $10,000 if we waited another 60 days? Maybe?”
Since its inception in 2003, Express has flipped roughly 500 properties in the Washington area.
It sent out mailers, advertised on billboards and the Internet; it did radio and TV commercials, telling people: “We buy houses.” In the beginning, the duo barely had to renovate the homes in order to sell them.
Bites came from little old ladies needing to sell their properties before moving into assisted care facilities and from people who’d given up and allowed their homes to be filled with trash, among others.
“I had some guy in Springfield, he was a pack rat. He was too embarrassed to meet me at the house,” recalls Allen. The man left the door unlocked for Allen to do a self-guided tour. When he agreed to purchase the property, the man signed all the documents in private. “I never met him,” says Allen.
Business breezed along for several years. The company would patch roofs and spruce up the interiors—but nothing major. “We’d buy them and then resell them to other investors, who would then fix them and resell them.”
These days though, Express Homebuyers has switched its business model. Around late 2006, Allen started noticing that some of his potential buyers couldn’t get loans for homes in need of significant upgrades. That’s when he began completely rehabbing dumpy old properties, often foreclosures, pricing them just below the market rate for completely updated houses, and “getting them gone,” as Allen says.
The entire flip process can take less than three months. Take, for example, what happened with 737 Hobart Place NW. Express bought the Park View row house in late December for $157,000. By mid-March, a new owner closed on the property for $350,000, which was $5,000 above the listing price.
Buyers agent Deatra Trinidad worked with the woman who bought the home. She and her client started looking for a house in D.C. last June. In late 2008, they made an offer on a LeDroit Park Express row house that ended up going for roughly $20,000 above the asking price.
“Of course we got bid out, so we weren’t able to move on that one,” says Trinidad, but then she did some research to find out about the next Express house in the area. “That’s how I came across this one. I knew when they purchased this one, and I figured four weeks later we should see it—and four weeks later we saw it.”
The story’s not terribly uncommon for Express. Recently, Allen hired Marc Hershkowitz as a new in-house real estate agent to handle his tidal wave of properties. It sounds like an easy job, at least in one respect.
“In the month that I’ve been with the company, I’ve already had my hands on 10 to 12 contracts, and almost everything comes in close to the asking price,” says Hershkowitz.
But what exactly are these buyers buying? Are these renovations any good?
In mid-December, Michael Fonseca purchased a home on 12th Street NE. He says he asked the builder to add handrails to the front and back of the house and upgrade the breaker box to something that seemed a bit more suitable for the home’s size.
“They did a reasonably good job,” he says. “It’s a brand-new house inside. But on the outside, they tried to just paint it up a little. They didn’t even do the brick. They just painted the steps. The simple stuff. I can’t complain. It was within my price range.”
Later, he added he was going to do some preemptive re-grouting in his bathroom, just to make sure there wouldn’t be any future leaks.
Alisia Richards bought her house in the Lincoln Heights/Deanwood area in August. “It’s holding up pretty well,” says Richards, whose husband is a plumber with an eye for bad reconstruction. There was a drainage issue in the basement when they first moved in. But Richards’ husband fixed it himself and since then, no surprises.
“They did a wonderful job,” she says. People give her compliments all the time.
The company now has 15 full-time employees, not including all the construction contractors working throughout the region. They basically shuffle around from Express house to Express house, says Allen. Four of the full-timers were hired within the last month.
After Allen and I leave the Randolph Place home, we drive a few blocks west to T Street, where we stop at another row house. This one still needs a good amount of work, but it’s already under contract. The buyer has asked for some customization, so one living room wall is—shocker!—blue, not the traditional beige. Moving across town to Bloomingdale, Allen points out two more Express houses. One has already been sold, another is under renovation. As we drive by, the crews are clearly working.
A few days later, I e-mail Allen to ask how many Express properties are currently on the market.
“Only 7 currently (because we’ve sold them so quickly),” he writes, “but we’ll have 35 additional in the next 2 months.”
This piece will appear in this week’s Washington City Paper hitting the streets tomorrow.