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Damaged pipes, termite-eaten walls, hoarder homes and delinquent tenants—while Nexus Homebuyers has only been in business since 2015, it sometimes seems like the real estate firm has seen it all.
Matt Bigach and Zach Tetley co-founded Nexus Homebuyers in Knoxville, Tennessee, to purchase homes with cash and either fix them up and sell them or keep them as rental properties. They market themselves to homeowners who might have damaged, hard-to-sell properties, or as an easy alternative to the sometimes lengthy process of placing a home on the market with a realtor.
—Matt Bigach, co-founder, Nexus Homebuyers
But building a business model using an atypical sales process isn't always simple.
“Most people do not know that you can sell a house without a real estate agent," Bigach said. “This makes them a little hesitant at first to work with a company like ours. Once we meet with homeowners and show them that we have been in business since 2015 and have a ton of reviews from other homeowners, the conversation becomes a little easier."
1. Please describe what your business does.
Nexus Homebuyers buys houses in as-is condition and make necessary repairs to either resell the home or keep it as a rental property. We offer another solution to the home selling process other than listing with a real estate agent or trying to sell your home for sale by owner.
The traditional home selling process is not for everyone, and we want homeowners to have a fast and honest solution for selling their home without fees or commissions.
2. Can you elaborate on how you decided to acquire homes?
When starting any business you have to look at something that motivates you and you find interesting. For both my business partner and I, we have always had an interest in beautiful homes. We wanted to know how we could create something that people are proud to call home. Once we decided on real estate, learning to “flip" a house is not too difficult. We studied and learned from successful real estate investors in our area, and we were quickly able to learn enough to start our own business.
3. What hurdles have you overcome in running your business?
One of the biggest hurdles we faced was hiring effectively. Our first hire did not work out, so we went back to the drawing board to understand why. We realized we had not set the expectations clearly enough and did not have a defined scope of work with expected goals for the employee. Now we set expected goals, scopes and timeframes for all future hires going forward. It helps everyone stay on the same page and achieve success.
4. Please share a story about a challenge a client presented, and how you solved their issue.
In 2017, there was a homeowner who came to us with a property that they owned out of state. The homeowner was renting the home to a family member, and the family member was refusing to pay rent for over a year. The home was in poor condition and the homeowner had no idea what to do next. We worked with the homeowner and the local sheriff to remove the tenants and close on the home in its as-is condition. The homeowner was able to get the tenants removed and close without ever coming to Knoxville.
5. What are key things you look for in an investment home?
When buying any home, we look at what our potential exit will be. Are we going to buy the home and renovate it to sell, or buy the home to renovate and rent? Once we figure out our exit strategy, we take into account the homeowner's needs, the comparable sales in our area, current market rents, our financing options, the repairs the property needs, how fast the homeowner wants to close, our current projects and what return we are looking for from our time and capital invested. We weigh what our potential exposure is on the project compared to our return. If the home will need an extensive renovation, our risk will be higher. A lighter renovation should reduce our exposure.