Targeting first-time home buyers and utilizing a portfolio of strategies is key, according to RESICAP’s founder.
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When the recession hit in 2008, RESICAP founder and co-CEO Andy Capps — along with his business partner, Lance Popp — saw rare opportunity in the housing market. Since then, they’ve aimed to make flipping single-family homes higher-quality and more cost-effective.This interview has been edited for length and clarity. What does your company do?My business partner, Lance Popp, and I met at the gym — we were always there at the same time and started talking shop. We realized our skill sets complemented each other to reposition entry-level houses to first-time home buyers.During the recession, we were buying entry-level houses, renovating them and then flipping them to first-time home buyers because at the time there was no institutional interest. We knew that there would be an abundance of distressed single-family homes coming out of the recession because so many people were going into foreclosure. There had to be a group to come in and add value to these homes because they were in extremely distressed states.In addition, we believed there was a shortage of quality, affordable rental housing out there. At RESICAP, we work with institutional owners, so those of single-family assets, to help them maximize the value of each home in their portfolio. We’re not B-to-C at all — very B-to-B. We provide strategy recommendations, then execute on that strategy by providing a variety of our services. Those include acquisitions, valuations, renovations, property maintenance, property management, disposition and home-building services.So we look at properties and say, “Is this a sell-as-is strategy, a renovate-and-rent or a renovate-and-sell?” Then we provide supporting documentation for that strategy recommendation and execute on it because we’ve internalized all the services required for all strategies.How do you define success?Our success is really completely contingent upon our ability to add value for our clients. If we’re not adding value, then we’ll go out of business.How important is your company culture?I believe company culture’s so much more than having a cool office with free snacks and a ping-pong table. It’s about believing in whatever your core values may be and tying them directly into every decision you make. Our core values are proactive service, positive enthusiasm, adaptability, responsibility and innovation.What is your advice for retaining both customers and employees?We have a never-settle initiative that encourages our employees to submit their game-changing suggestions for better processes or services to offer. The individuals with the top suggestions get to present to the executive team quarterly and are then awarded monetarily and are recognized in our company newsletter for doing so. Most of the suggestions are implemented, and new service divisions have actually been created as a result of this initiative. They feel empowered to affect change. This also helps us retain clients — they benefit from our team’s desire to constantly improve.What are some challenges in your career that led to breakthrough moments?When we started, we quickly realized there were real logistical challenges associated with this business and that an off-the-shelf operating system to help us overcome these challenges didn’t really exist. So we invested in building our own proprietary operating system. We call it HoneyBadger, and that has become a key competitive advantage for us. HoneyBadger has allowed us to scale at an extremely aggressive rate while providing our clients with total transparency throughout the entire life-cycle of the single-family asset.