Michael Valente With Renovation Sells

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Lee Kantor: [00:00:32] Lee Kantor here, another episode of Franchise Marketing Radio, and this is going to be a fun one today on the show, we have Michael Valente. And he is with renovation Sells. Welcome back, Michael. Hi, Lee. Great to be back. Well, I’m excited to get updated for the people who aren’t familiar. First, tell us what tell us about renovation Sells. How are you serving, folks?

Michael Valente: [00:00:51] Sure. So we do quick cosmetic updates in order to get houses ready for sale. So we partner with real estate agents. They bring us in on projects that are either about to go to markets or projects that are have been listed for a while and aren’t selling for some reason. So the whole concept of what we do is, Hey, let’s just do a quick cosmetic updates, meaning paint cabinets change counter sand floors. We do it all with a designer touch to hopefully get the best looking pictures possible. So that’s that’s all forward facing online, and it helps drive traffic to a listing to hopefully maximize sale price and decrease market time.

Lee Kantor: [00:01:28] And that kind of Instagram friendly look is not a nice to have any more, right? This it must have in today’s world.

Michael Valente: [00:01:35] Yeah, really. I think you hit it on the head. I mean, today’s world, you know, people, especially buyers and the largest segment of home buyers right now are millennials. They make up about 37 percent of the buying market. You know, they really want what they see on TV. They want what they say on Instagram. And frankly, you know, ninety nine percent of the time, the first time homebuyer or any home buyer for that matter, sees a house, it’s online. So the purpose of what we’re trying to do is how do you update these homes and get really pretty forward facing pictures to drive traffic? So it is a must, you know, buyers want what they want and they want a specific look. And if that particular home doesn’t have that look, you know, you’re potentially going to miss out on that buyer.

Lee Kantor: [00:02:12] Right. So if you’re not investing in kind of the look of of your place, you’re kind of wasting a lot of people’s time, the realtor yourself, it’s going to take a lot longer to sell, of course.

Michael Valente: [00:02:23] And I really say, you’re doing yourself a disservice if you’re not doing some updates in order to prep your house for sale. This is as a home seller now you’re doing yourself a disservice, and that prep could be anywhere from decluttering to doing the construction staging kind of like renovation sales does or staging your house. But at minimum, you have to do some pre-sale update to your home to get it ready for sale.

Lee Kantor: [00:02:48] Now, let’s talk a little bit about the back story and the kind of the genesis of this concept. Can you share a little bit about what the thinking was when you started in and then how you moved into franchising?

Michael Valente: [00:02:59] Yeah, sure. So we didn’t set out the franchise and that’s, you know, I always kind of say that this concept wasn’t born to do that. It was honestly it was born out of some pain that we had. I’ve been in the construction business and residential construction for about 14 years. I’m a licensed realtor. I don’t practice, but I’ve held a real estate license for the same amount of time. I flipped houses, done multifamily development, but our main business between 2012 and about twenty eighteen was really high end construction direct for clients. We were the construction arm of a well-known designer in town. But the problem with that was we had some high dollar projects that had long lead times, meaning like a year or longer on these big projects. But we were really just getting fatigued with the client side. The clients were really difficult in some aspects, you know, and rightfully so. They spent a lot of money for for the updates that the designer had put forth, but we just were tired of the changes. It was never enough. And we just said, you know, we got to do something different and with our my real estate background and our investment background and also our construction background, we said, Well, what if we can eliminate what we dislike the most but keep everything else we like? And that’s how renovation sells was born.

Michael Valente: [00:04:11] It was really, you know, hey, we can. What if we did quick designs and updates on these these houses before they get listed for sale? But because they’re going for sale, it really eliminates the emotional aspect of construction and it takes the client out of it. And that was our aha moment. You know, we started renovation sales in January of twenty eighteen and you know, it really just took off in about a year and a half into us operating this business in Chicago. My wife and I were sitting on the couch and my wife actually said, You know, this really should be a franchise. And you know, I’m kind of a dreamer and in love big ideas. And I said, You know what? You’re exactly right. And off we went. So that’s how we came into to franchising, but we didn’t set out to do it. It just was kind of something that that this business needed needed to be.

Lee Kantor: [00:05:00] Now what is that ideal franchisee look like? Are they already in the real estate business? And this is kind of a complementary service that can offer or is this somebody starting from, you know, brand new, you know, maybe got laid off or retired? And who’s looking for a second act?

Michael Valente: [00:05:15] Yeah, I think it’s more either looking for a second act. You know, we’re looking for full time operators. So not we’re not looking for someone to be a realtor and be renovation sales. You know, first and foremost, we’re just looking for good people. You know, we have to interact with those franchisees and we. Want them to be good human beings. You know, the second kind of area that we see a lot of is is is professionals that have been in the professional corporate environment but just want to change. And that’s a lot of individuals that that we get. Obviously, they have to have franchises, have to have some interest in project management, design, real estate and sales because that’s that’s what they have to do. You know, is is construction necessary as a background? No, it doesn’t help. Yes. So, you know, we’re looking for good people who have a, you know, corporate background that are looking to make a change, who are interested in real estate construction and design.

Lee Kantor: [00:06:10] Now the the way that you’re helping launch them in an individual market is they are the boots on the ground. They’re the ones networking and finding the homes that are, you know, about to go for sale or for sale and not selling. And then they come in and kind of rescue the project and offer this service to help kind of accelerate the sale.

Michael Valente: [00:06:31] Exactly right. So we mark it strictly to real estate agents. You know, real estate agents kind of have their pulse on the market and the realtors know of all the properties that are being bought and sold. So we’re a tool in the real estate agents toolbox. You know, realtors don’t like to sell ugly houses. They they sit on the market for a while and they can’t maximize value. So realtors bring us in, just like you said, either before House is listed. And they know that if we do work on the property, that they can return more money than the work that was put in and sell it faster. Or we come in after a house has been sitting and some adjustments needed. And it’s either, you know, Hey, let’s make a price adjustment, but sometimes it doesn’t necessarily mean that that’s going to move the house and sell it, you know, or you make a cosmetic adjustment, which we do and give the, you know, the good product and the forward facing pictures online.

Lee Kantor: [00:07:21] And then so the person that your franchisee, their main job is kind of just be the best friend of every realtor in town and everybody in that kind of realtor ecosystem.

Michael Valente: [00:07:31] That’s exactly right. You know, the beauty of what we’re asking our franchisees to do is is really connect with, you know, the top five percent of realtors or 10 percent of realtors in their market. And I say that because we’re in the city of Chicago. Chicago has 10000 real estate agents that are licensed, but about 500 of them control. Ninety five percent of the market. So the only people we really want our franchisees to go after is that top five hundred or that top five or 10 percent because they’re controlling ninety five percent of that market. So the 80 20 rule, right? So we’re asking them to be the best friends of those realtors so that the realtors then will bring our renovation sales franchisees on those houses and projects that need to be updated.

Lee Kantor: [00:08:13] And then once a realtor kind of reaches out to your franchisee, then the the that person goes in and kind of assesses the situation and then gives them kind of their tips or recommendations on how to get the the property ready to sell for the highest value.

Michael Valente: [00:08:29] That’s exactly right. It’s collaborative effort between the renovation sales franchisee and the realtor because, you know, we can’t update the entire house. We have to pick and choose on what makes the best and biggest returns. You know, you may have a house that’s a kitchen, you know, in three bathrooms, but you know, the homeowner maybe only has available funds or they only want to put in, you know, x amount of dollars. Well, you OK? Well, let’s recommend. Let’s do the kitchen facelift and paint the walls and sand the floors. You know, maybe we can’t get to the bathrooms. So, you know, we’re not updating the entire house. We’re selecting and choosing certain areas of the house that provide good returns and help sell the house fast.

Lee Kantor: [00:09:08] Right. So you’re helping prioritize like what’s going to be the biggest bang for their buck?

Michael Valente: [00:09:12] Correct. That’s exactly right. And the biggest bang for the buck in any project typically has to do with the kitchen. It’s really easy to take an old dated brown, you know, cabinet kitchen with granite countertops and paint the cabinets, change the counters from granite to quartz, and add a backsplash and new light fixtures. That’s a simple update that has a great return on investment that that provides great, forward looking photos to the to the general public who are looking for homes

Lee Kantor: [00:09:38] Now as the franchisor. How do you help that franchisee have the right resources and the right kind of talent to execute on the plans?

Michael Valente: [00:09:47] Well, we have a good, robust training program that they come through prior to opening and then we assist them in finding different subcontractors. And then part of our services is we provide the design. So all the design comes in through our corporate location. So the design is held in-house at the franchisor level, our level, and we provide that to the franchisee through some technology that we’ve implemented, where the franchisee is able to kick us back pictures and and walk throughs of the existing space. And because it’s all cosmetic, we can design it from from afar.

Lee Kantor: [00:10:21] And I would imagine in this business kind of before and after photos are the lifeblood of the marketing,

Michael Valente: [00:10:27] Before and after photos or all of the marketing you. When you see an old rundown brown cabinet kitchen and you see our pretty updated white and gray styled kitchens, that’s really all that that people need to see and they get what we’re doing. So before and after pictures are the lifeblood in the marketing that we utilize extensively to promote our our services and our system.

Lee Kantor: [00:10:52] Now can you share like kind of. It’s pretty dramatic when you make those kind of design changes in the in what the value of the house changes, right? Can you share kind of how dramatic that that can be if you update a kitchen or you update a bathroom or you like, what’s your kind of personal record of, OK, this this house, you know, if it had this kind of stuff, it would be worth X. And if it gets updated, it’s worth, you know, X plus.

Michael Valente: [00:11:18] Yeah, I mean, we don’t. So we’re not realtors, so we stay and steer clear of providing those actual returns because, you know, every market, every neighborhood, every street is different, right? But you know, a good project. I’ll tell you what a good project is if you give us, you know, $40000 to do updates that you return that $40000 plus an additional 40 on top of that. So one hundred percent return on your money is a great example of what we do on a regular basis in terms of driving value. And in fact, we just had a house the other day that someone said if I sold it as is, it would be worth four hundred, Mike. We’re going to give you 40. And I know after you come in and do your forty thousand worth of work, which consisted of, you know, kind of a bathroom facelift, the full kitchen make over floors, lighting and paint that they are then now going to list it for five hundred thousand. So that forty that they put in and this was at the realtors calculation will then return an additional 60 on top of that, right?

Lee Kantor: [00:12:19] So that’s what it could be. I mean, so so these things are it is dramatic. So these things aren’t kind of incremental. It could be a really nice bump in terms of what you’re going to get, of course.

Michael Valente: [00:12:32] And but that also depends on, you know, the existing price level of the house, right? Some areas, if you have a $200000 house, I mean, you know, that particular house may never be worth more than three hundred, right? You also could have a million dollar house that if you do one hundred thousand of work, you know, now it can be worth 1.4 million, right? So there’s a large range of where the upside is and the untapped equity that we can help realtors and homeowners unlock with our system

Lee Kantor: [00:13:00] Now, now that you’ve been doing the franchising for a minute. Can you talk about how that’s gone in terms of where you’re at today?

Michael Valente: [00:13:10] Yeah, no. So where we at today is we have six locations open across the country, with two more coming on board here in the next week and a half. And we have a full pipeline of people across the country that are interested in being renovation cells and in their particular market. And frankly, Lee, you know, our system and our product works in anywhere, USA, anywhere where there’s some sort of housing dated housing stock and that’s everywhere. Our system is is needed and can work.

Lee Kantor: [00:13:41] Now, how has the pandemic impacted your work where there were folks able to go out into homes? Were you allowed to go in and do what you had to do in those markets? Or did you have to pause?

Michael Valente: [00:13:54] We had to pause. I think just like everybody else in April through May last year, we had to take a break because we didn’t know what was going on, but then we slowly got back to work. You know, the pandemic honestly hasn’t hasn’t affected us that much. I mean, minus, you know, the the extra precautions and that we had to put in place. We actually had the best year of of the past three years last year and that was in the middle of the pandemic. I think the real issue, you know, that that we have seen but we’ve adjusted for is just we’ve had some material costs that have increased due to supply chain issues, right? But that’s that’s everybody in most industries. So and that’s just an adjustment. We watch our costs and make adjustments as necessary.

Lee Kantor: [00:14:35] Right. I think that’s affecting everybody. It’s not they

Michael Valente: [00:14:37] Feel it doesn’t matter if it’s construction or widgets that used to come in, you know, you you know, you can buy them for five thousand or now thirty thousand. So it doesn’t it doesn’t matter what industry you’re affected by that supply chain issue. But we just again, we we watch, we monitor and we adjust.

Lee Kantor: [00:14:52] Now in your business, are you kind of bullish as you move forward? You said you had record year last year, is the momentum continuing into next year?

Michael Valente: [00:15:01] Of course, we just came off of the hottest real estate seller’s market that we’ve seen since two thousand seven and that was this year, and we’re going to do a record number of projects this year. Our system is not built for, you know, homes selling as fast as possible, but we still do great business in that market. Our system will really take off as we go towards a more neutral market or buyer focused or buyer. Favored market, and that’s where we’re trending, so, you know, as things are starting to hit and we’re in the fourth quarter of twenty twenty one right now. You know, houses are starting to sit longer and we’re getting busier. So the more that houses sit and the more that that, you know, for instance, rates rise and we run into some inflation, which we’re going to, you know, our system will be even even more needed because, you know, we’re here to help sell homes and people don’t want to buy homes these days unless they’re updated and finished.

Lee Kantor: [00:15:58] Now, what are the markets that you’re in right now? Are you just kind of growing around the Chicago area or is this kind of the whole country is your oyster and, you know, franchisee could pop anywhere?

Michael Valente: [00:16:09] Oh, country, we’re in western Chicago. We’re in Charlotte, Charleston, Dallas, Denver will be in Atlanta soon and some other markets in the will be in Houston. Actually, somebody just signed a franchise agreement the other day in Houston. So again, anywhere all across the country, that’s where we’re growing.

Lee Kantor: [00:16:26] Good stuff. Well, congratulations on all the success. If somebody wants to learn more about the opportunity. What’s a website?

Michael Valente: [00:16:32] Renovation sales WWE Renovation sells, sells WSJ.com

Lee Kantor: [00:16:37] And they can learn more about the service and also the franchise opportunity

Michael Valente: [00:16:42] Correct on that website. There’s there’s a pretty before and after pictures all about us. And then also there’s a full tab regarding franchise opportunities. They can fill out information if they’re interested in becoming a franchisee.

Lee Kantor: [00:16:54] Good stuff. Congratulations again, Michael, and thank you so much for sharing your story.

Michael Valente: [00:16:58] Thanks, Leigh. I appreciate you having me.

Lee Kantor: [00:17:00] All right, this is Lee Kantor. We’ll see you next time on Franchise Marketing Radio.