Member Spotlight – ReUp
ReUp partners with home sellers to renovate their home to sell for top dollar. We identify home sellers through our seller agent partnerships. Once a potential project is identified we send in a Matterport camera and fly drones over the property. With this scan, we get a full rendering of the current condition of the home. This takes about 45 mins and gives us every dimension of the home within +/- 1 inch, eliminating human error and omissions that are often experienced when a contractor comes in to manually measure the home. From there we send this 3D CAD file to our design teams. Our design teams take the current layout, modify it, and add in the necessary changes that are going to help sell the home for top dollar.
The coolest part about this process is it can be experienced in VR.VR. If something does not look right or a color is off, it can be changed in VR prior to commencement instead of after the materials have already been cut and delivered. No longer do you have a General Contractor (GC) trying to sketch out a kitchen design on a napkin to try to get the home seller, agent, and subs all on the same page.
This VR design process creates two very powerful documents for us: our scope of work and our bill of materials. We have created a number of partnerships with national material suppliers. This allows us to get much better pricing than a GC who is beholden to whatever the price is at the local hardware store which has already been marked up.
We bring all of this work to our GC partners who pay to have access to our jobs because it drastically simplifies the work they must do. No longer do they have to find a lead, close it, worry if they will pay, design it, source the materials, and staff up. All they have to do with our model is staff up and complete the work.
Once the home is complete the home is given back to the selling agent and home owner to take to market and sell for top dollar. ReUp maintains complete cash control, paying the contractors directly, and all the funds are split with the homeowner out of Escrow.
ReUp makes money by aligning our incentives with the homeowner. We agree a base price of the home (ex $100k). We “advance” the funds for the needed renovations (ex $30k). Assuming the home sells for $200k, the $70k in upside is split 50:50 with the homeowner and ReUp. ReUp retires the $30k we advanced (but controlled) and the homeowner gets 100% of the base agreed-upon base amount.
A few competitive advantages of ReUp: because we only front the cost for a renovation and ride off the homeowner’s existing mortgage, it gives us access to free leverage. Our renovation budget to current value of the home is usually 5-6x.
Since we focused on the issues contractors also experience, our average signed-deal to demolition-started is less than one week.
Our average project is returning 42% from funds deployed to closing escrow (on average under 5 months) and we can cycle funds multiple times in a year.
Our renovation budgets are locked in once quoted. Additional work, like termite damage, that is discovered during demo is the responsibility of our contractors. They are willing to take on the additional risk because of how deep we vet a home with our technology. Also, if they come in under the quote, they keep the difference.