Fix your fixer-upper pre-sale, this company says, and quit leaving money on the table – Orange County Register

Renovated homes tend to sell faster and for more money than remodeled homes.

But some homeowners prefer to sell their home as-is rather than having to restore it to turnkey condition.

“People don’t do it, mainly because they’ve had bad experiences with renovations. There’s a lot of anxiety,” said Michael Alladawi, chief executive and founder of Revive Real Estate, an Irvine company that helps homeowners renovate their properties. “It’s not uncommon to hear horror stories, or to hear (it took) double the time and double the cost.”

But these sellers, Alladawi said, are “leaving money on the table.”

Revive, founded four years ago, says its business takes the hassle out of “pre-sale renovations.”

Revive helps homeowners assess the cost and potential value of kitchen and bathroom remodeling and flooring renovations. If the renovation increases the home’s value enough to make it worth it, Revive matches clients with contractors and oversees construction. They even pay for the work and are reimbursed from the proceeds of the sale.

If the homeowner needs cash quickly, Revive will purchase the home at 80% of its value, using the remaining equity to cover renovation costs. Once the home is sold, Revive issues the homeowner a second check, returning all proceeds minus renovation costs, closing costs and a 6% fee.

Since its founding in 2020, Revive has expanded to Texas, Florida, Washington, and Tennessee. He has renovated about 2,000 homes, most in the Bay Area and Southern California.

We recently caught up with Alladawi to learn more about his business and the benefits of giving homes a facelift. The interview has been edited for space.

Q: What inspired you to start this company?

A: The mission is to automate house flipping for the consumer. And by flipping, I mean strategically updating your home to market it in a way that maximizes its sale value.

Consumers typically leave between 15 and 20 percent of their money on the table if they don’t maximize the value of their home when they sell it.

And in California, that’s a lot of money. If we’re talking about a million-dollar entry-level home, that’s $200,000. Or for a $2 million house, that’s $400,000 that people are leaving on the table, just because we have aging inventory.

Everything is built in the 70s, 80s or 90s. Even the 2000s are outdated.

They have dilapidated homes that would greatly benefit from some strategic improvements.

Q: Why aren’t sellers renovating their homes more?

A: The renovation space has literally never had any innovation. Contractors always write contracts on a napkin. Their wives coordinate the supply of materials.

The types of contractors people hire are good guys, but they need support. And they don’t have it.

Essentially, we can be the consumer-facing entity that takes care of all of a contractor’s front and back office tasks, allowing them to focus on just one thing, and that is managing that work.

Q: How exactly does your service work?

A: (We help with) assessment, planning and execution.

First, (we assess) what the post-renovation value of a house might be and what the current value of the house is.

Is there a gap between the value after renovation and the current value?

Sometimes this is not the case. Maybe you already have a really nice house. And sometimes this delta is very large.

The second step is planning. Once you understand that there is an opportunity to increase value, you need to decide what your scope is and what your budget is.

Are you going to paint the kitchen or replace the kitchen? Are you going to renovate all the bathrooms or just one? Are you going to renovate the floors or change the floors?

And then the third part of the equation is execution.

Revive helps homeowners understand these things, then Revive matches you with a supported contractor who can deliver your project predictably. And Revive pays this contractor upfront, so you don’t have to until your house sells.

Q: How do you make money?

A: We carry out (support) work for the contractor and for this we charge a fee to the contractor. And Revive buys this contract. By giving them money upfront, they give us a 3-5% discount.

And Revive only takes on projects in a market where homes move in 60-90 days or less, and we only take on renovations that can be completed in 60-90 days or less.

We keep things simple. Cosmetic renovations (if permitted) can be carried out over the counter (at city hall). And these are the elements with the greatest added value. Kitchens. Bathrooms.

Q: Does Revive build ADUs (Accessory Dwelling Units)?

A: Not today because we haven’t figured out how to do it in 90 days or less.

Q: How much does a typical job cost?

A: Our average renovation budget is $80,000 to $160,000. And the average scope is a new kitchen, a few bathrooms, floors, baseboards and paint.

Q: How much can remodeling add to the sale price of a home?

A: Typically 15-20%. Of the homes we have renovated, this is the value we add.

And a good rule of thumb for consumers is if you can put $1 in and get $2 out, it’s a good deal.

Q: What are the most common pitfalls when renovating your home?

A: Finding and selecting a contractor is a very difficult thing for the general consumer.

They all use different contracts. They all write their offers differently. Sometimes it’s very difficult to understand what you’re getting when you’re looking at an offer. What is included, what is not.

Sometimes what seems like the lowest price ends up costing the most because it excludes so many things that you may not even know are necessary.