Lee Kantor
Lee Kantor here another episode of Franchise Marketing Radio and this is going to be a good one. Today we have with us, Mike Valente with Renovation Sells. Welcome, Mike.
Mike Valente
Lee, how are you?
Lee Kantor
I am doing great. I'm excited to learn what you're up to tell us a little bit about Renovation Sells.
Mike Valente
So Renovation Sells is a light construction company that focuses solely on getting residential houses ready for sale. And we do that by completing quick cosmetic updates with a designer touch.
Lee Kantor
And then what was the genesis of the idea? What's the backstory?
Mike Valente
Well, I've been in construction and real estate for about 14 years. And you know, my background, I'm a licensed real estate broker, I don't practice on a day to day basis. But you know, I've helped homeowners for a long time, update their houses. And then I've also flipped houses and done some real estate development. And frankly, we were getting tired of doing kind of high-end project direct for homeowners.
So we kind of melded my real estate background and development background with our high-end construction background and said, you know, we can still achieve a designer-based product, but don't necessarily have to have the interaction with the customers. And that's how Renovation Sells came about. It's, you know, we really like to work on empty homes that are about to go to market, we design them but we have eliminated the client service aspect of it by only doing stuff that's going directly for sale.
Lee Kantor
So now the work that you do is primarily Okay, we're just going to kind of put some jazz hands on the kitchen, the bathroom, like you know, maybe the front a little bit like what is the typical kind of how do you attack a home?
Mike Valente
Right? Well, the first thing we do is is what's the most important piece of the home and that's usually a kitchen, right? So to answer your question, what we do is we take an existing space and we don't overthink it we just update the existing space so we paint kitchen cabinets, we change the countertops, we change the backsplash and the floors and paint the unit so everything we do is based around how can we quickly be in and out of the space and updated cosmetically you know most houses that we work on you know have pretty good layouts they're just dated and they're not what today's buyers looking for.
Lee Kantor
And then that's where kind of your expertise in this is you can get you to have a good feel for what people want in different you know market that you're serving. And then you can know that Okay, these are the six things that we go to first and if we can fix these this is going to increase the value this much so we have a pretty good system in how to execute on that.
Mike Valente
Yeah, that's exactly right. I mean we design everything in-house so that's you know, all the design comes from our in-house designers out to our franchisees but really you know, we start with what's the heart of the home, the heart of the home is the kitchen. And that's the kind of low hanging fruit and it's fairly basic to you know, paint cabinets change countertops, and then from there we go into, you know, can we address the floors paint and then any bathroom work?
Lee Kantor
And then how do you decide incrementally how, because it's one of those things where it can go on forever, right? Like he can always be tweaking something
Mike Valente
Correct, I mean some of that has to do with payback and you know how fast we can be in and out and that's where our realtor partners get involved. So the main sale in our main client is really the realtors. So we connect with the realtors, the realtors bring us in on houses that are about to be listed, and together, the realtors and our franchisees and ourselves, we decide, okay, how much can we spend? And is there a return and a payback on our spending, you know, we want whatever the client puts into the house, so they put in 20,000 into a kitchen, they should get that 20,000 back plus some along with moving the house faster than they normally would have moved it.
Lee Kantor
And those are kind of the metrics that matter in your business, right?
Mike Valente
Well, payback is definitely a metric. I mean, you shouldn't give me you know, you shouldn't pay for something that you're not going to get a return on. But that's where the realtors come into play because the realtors will tell the homeowners, Hey if you put 20,000 into the kitchen, then you should expect to see 30,000 in return. And that's why real partners are so important.
Lee Kantor
Now, at what point did you decide hey, this can be a franchisor did you build this in order to be a franchise from go
Mike Valente
No you know it's funny my wife who's who started the business with me and as a partner in our business you know we had created this business out of frustration from dealing with high-end homeowners and their personal rehabs you know we were about a year into Renovation Sells and we really just said you know, this really works everywhere. It doesn't work just in Chicago where we are I mean it works in any market that has any sort of dated housing stock which is the majority of the United States you know, can use a refresh before it goes to market so it wasn't something that we set out to do but it was almost it just it had to be franchised because it can this process can be utilized anywhere.
Lee Kantor
So then how did you kind of identify those first franchisees?
Mike Valente
Well the first franchisee so we recently just started franchising in March of this year we spent the entire year you know, as you know building the whole franchise platform and have recently just started franchising in different locations
Lee Kantor
So now so when you made that switch, like now you have a different business right like before it was Renovation and now you're in the training and sales development business how did that transition go
Mike Valente
Well that transition is still a work in progress but it's you know, our business model is not that complicated you know, we don't have a brick and mortar shop this business can be run out of your house and it can be run with one or two people so you know in the second part of that is from a construction standpoint, which I've been in the construction field for a very long time, is that the work that we're doing is basic level construction and that's why I keep saying it's cosmetic because painting and sanding floors and changing countertops it's not that complicated obviously there's a learning curve and you have to have some project management skills but as far as you know, full training there's no brick and mortar you don't need a lot of employees it's fairly easy to get up and operating and the business overall is not that complicated once you get into it.
Lee Kantor
Now is the potential franchisee you mentioned the importance of a real estate professional Is that a real estate professional who's got this on the side now or is this something that is just you know, maybe they're in the building and construction business locally and this is now a way to tap into this market? Like who is the what's the persona of that ideal franchisee?
Mike Valente
Yeah, the ideal franchisee is really a business person or someone that has you know, operation and process knowledge, you know, a construction background is definitely a plus because the biggest learning curve is how do you manage a small set of crews. But you know, the ideal franchisee can be, you know, someone who is coming from the corporate world and just, you know, decided that they no longer want to be in corporate and want to want to, you know, carve their own path. You know, but again, I think that some design real estate construction knowledge is a plus. But it's completely not necessary, because this business can be taught to anyone.
Lee Kantor
And then the person running the franchise isn't doing the work necessarily. They're just managing folks who are
Mike Valente
They're managing Yeah, the whole business is really a subcontracted business. So they would be responsible for managing the crews however that looks and then they would also be responsible for doing the networking and getting the clients but the clients really are the realtors.
Lee Kantor
So then, and again, that's where it may look from the outside as a b2c business. This is really a b2b business because it's about really serving the real estate professional in a given market.
Mike Valente
That's correct. I mean, if you think about it from just an economic standpoint, you know, to get to a one-off customer is a lot harder than getting to a realtor. And I always make the analogy that in a town and I live in Chicago, there's 10,000 real estate agents 500 of them probably control 90% of the real estate market in Chicago. And that's just that's the 80-20 rule in general, right? So the purpose of what we're doing is is why try to spend the marketing dollars to find a one-off customer you do the work, they may be happy and say they'll give you a referral, but you're not necessarily sure they were they will, but the connecting to the realtor if you make the inroads and you serve as the realtor in that specific brokerage house.
Now you have a realtor that you know, may do 30 transactions a year and they'll bring you in for four or five of them. And you know, you compound that times 10, 20, 30 realtors, your pipeline will consistently be full with potential projects because the realtors are the ones who are bringing you in, not the clients
Lee Kantor
And the value you're providing realtors as you said earlier is the houses being sold faster at a higher price.
Mike Valente
That's exactly right. You know, no realtor likes to sell an ugly house, you know, realtors love to sell and market pretty things. And they're in the business of moving products right there in products being homes. So realtors love our service because we take number one, the heavy lifting off of them. A lot of realtors, you know, may do may prep their houses in some form before they go to market. But the problem is, is why is the realtor spending the time being a general contractor. So that's where we come in, we not only do the design, we do the general contracting, and we give it back to the realtor. So the realtors are now happy that they have this pretty Instagram-looking product that, you know, buyers are seeing from HDTV. And we do that for them, you know quickly and seamlessly with a thoughtful design and then they get this beautiful finished product back that they get to sell and then can mark it as Hey, look what we're selling these pretty houses.
Lee Kantor
Now from the realtor standpoint, how are they handling this right now? Are they just saying hey, you should fix up your kitchen and they're just sending you to somebody who's a kitchen person locally? I mean, they're there, they must be addressing this in some way right now.
Mike Valente
For you meaning for how do they address it with us or themselves? Like,
Lee Kantor
When you're not there? They must be trying to solve this somehow?
Mike Valente
Well, they do. I mean, some realtors know how to solve the problem. But the question is, is why is the realtor putting in their own time to solve that problem. And that's why they should source it out, you know, we're really an extension of the realtor’s team.
Lee Kantor
And that's how they have that's part of the franchisee’s job is to educate the realtor on why it's just more efficient is to partner with you guys. And then and you guys just handle on
Mike Valente
Correct, the franchisee’s main job, they really have two main roles, the main role is number one, to be great at networking, connecting with realtors and brokerage houses to show them what's possible and what Renovation Sells can do that’s rule number one. Rule number two is then you have to manage and execute the design in the process. And that's rule two is, is doing that. So, you know and from the franchisor level, we will help provide them provide all the design that's custom made for each project. And then we help them with all the marketing in their local market to connect to those realtors. But remember, you know, if you're really only going after 500 realtors, and those realtors, you know, the best part about realtors is they want to be found, they're all on social media, you can easily find all their information. So connecting with the realtors is fairly easy,
Lee Kantor
Right? And then it's just a matter of educating them and showing the value that you provide.
Mike Valente
Correct. I mean, you educate them, show them the value, but the value is best shown in pictures in our business and when you see, you know, beautiful before and afters of what it looked like an Ugly Duckling before. But then we made it, you know, a beautiful property afterward. That's really where, where the value comes in. And frankly, you know, real estate is becoming, you know, more online than ever. And you know, 99% of the time, the first time someone views home is on their mobile device. So what that means is that if you're not putting forth the best-looking pictures possible, you're really doing yourself a disservice because you're potentially missing out on potential buyers.
Lee Kantor
Now you mentioned that the realtor is going to be kind of the main conduit to clients is this something that a person that wants to just kind of update their house that you're even going to help them with or is that that's kind of not the primary obviously it's not the primary but it's still a service that you're going to offer
Mike Valente
Sometimes but that's on a case-by-case basis and we get a lot of inquiries where clients say hey can you update my house or update my bathroom? The problem with that is it then it becomes custom in the service level that goes into helping someone who's not going direct to market that wants it for themselves increases dramatically and that's what we try to stay away from now we still take some product some projects when it makes sense that we will do something custom direct for the homeowner and just by nature you know our name is out there and people call us up and say hey can you know I see you do beautiful work, can you help us out but I will always caution and cautious our franchisees that you have to be a tad careful because the customer service suck is real. And when people demand your time and energy and frankly when they spend a lot of money for a product that's personal to them.
They should have great service and great execution. But that can bog down a franchisee if they're doing, you know 10 empty projects where nobody's bothering them because they already have the design and all they need to do is execute and then you start getting into one-off homeowners that want the custom product. It can, it can throw the model for a wrench a little bit.
Lee Kantor
Right. But that's, that's an example where a franchise is a good play for a lot of people because they want that kind of machine-like way of this is who our clients are, this is what we do. And this is how we do it and you either fit where you don't can that's part of you know, every business has to know who the right fit is and who the wrong fit is and have the discipline to act accordingly.
Mike Valente
Of course, I mean, and that's, you know, again, we turned down probably half of the stuff that comes into us, I turned down stuff every day that just doesn't fit our box. And we have a very small box in terms of look, we really like empty units or units that are only going for sale. And sometimes people don't understand that. But yes, you have to, you know, figure out what works best for you. And that occasionally includes Yes, we will do a little bit of client work, but it really should only be cosmetic, you know, the goal is to be in and out in, you know, three or four weeks of a project and move on to the next one.
Lee Kantor
Good stuff. Well, Mike, congratulations on the success and best of luck on growing this thing. It sounds like you have a great concept. If somebody wants to learn more. What's the website,
Mike Valente
The website is www.renovationsells.com, just Google ‘Renovation Sells’ and that sells with an S and you will get right to us. And you'll see all our pretty before and after pictures. You can navigate around our website. And then we have a whole franchising tab where they can learn more information and then get an inquiry directly to us in our sales team. So we can connect with them about possible franchise opportunities.
Lee Kantor
Now, you started it You said in Chicago, are you looking for franchisees in that area right now? Are you open for anybody anywhere in the country,
Mike Valente
We're looking for franchisees nationwide, so Chicago would be great we are the good thing is where you know, an emerging brand, but we have territories available in almost every single market. So we are looking for people everywhere, but also some great operators in some of the collar communities of the Chicago area in general.
Lee Kantor
All right. Well, thank you again for sharing your story today. Mike, you're doing important work and we appreciate you.
Mike Valente
Alright Lee, thank you so much for having me. I appreciate it.
Lee Kantor
All right, this is Lee Kantor. We'll see you next time on franchise marketing radio.
