This month, we caught up with Cleveland-based renovators Corinne Kelly and Evin Peavy, who have worked with GROUNDFLOOR on many of their flips. We recently hopped on the phone with Corinne and Evin to chat about their journey into real estate and what their biggest pieces of advice are for prospective flippers.
How did you get into home renovation/house flipping? How long have you been flipping houses?
Corinne: Evin and I both individually had rental properties for a while, while also each doing our own thing. I was in marketing, while Evin was in the food truck business. I became interested in learning more about the fix and flip industry, and about a year and a half ago, I was introduced to Evin through a local realtor that we both knew. This realtor knew that I was looking to gain some experience within the fix and flip scene and thought that Evin would be a good mentor for me. It turned out that we worked really well together -- and the rest is history!
How many projects have you completed? How many are you currently working on?
Evin: We’ve completed six properties so far and have a few that are active right now, along with a couple of rental properties. Most of our projects have been done with GROUNDFLOOR. Last year, we completed four projects with GROUNDFLOOR and we now have three that are in the works with them.
What is one of the most important things that you take into consideration when you are completing a real estate project?
Corinne: I’d say the first thing is whether or not we can make money! [laughs]
Evin: Definitely! But I’d also say that we look very closely at the numbers associated with a given property -- the price per square foot, the comps in the neighborhood, etc. It’s really important to understand the numbers and what houses in the area are actually selling for. You can create the most beautiful flip out there, but if you’re trying to sell at a price point that isn’t on par with the area, it’s just not going to happen. At this point for us, I think there’s sort of a “gut feeling” we get when we walk into a property. We can pretty quickly tell whether or not it’s going to work for us.
Corinne: I think another piece we’ve started to take into consideration more recently is how interesting the project is. We’ve been doing this for a little while now and we’re always looking to learn and grow, so now in addition to the financial aspect, we look for whether the project can stretch us and enable us to build our skills in a new way. Plus, the creative process is really fun!
What are your thoughts on the real estate market in Cleveland?
Corinne: I think the market here is strong. Like everywhere else, it’s generally gotten harder to acquire properties to fix and flip, but Cleveland’s housing prices are good, and it’s still affordable to acquire new properties. As time goes on, we are interested in getting into other markets in Ohio as well.
Evin: Also Arizona -- we’re actually about to close on a property out there with GROUNDFLOOR’s help! I have a friend out there who turned me on to the local real estate market, so we’re excited to see how things go.
How did you find GROUNDFLOOR?
Corinne: When we first started, I researched a ton of different lenders. I talked to all kinds of banks and institutions as well as private hard money lenders, and we have done business with some of them. But once I found GROUNDFLOOR, that was it -- you guys are far and away our favorite lender to work with!
What has been your experience working with GROUNDFLOOR?
Evin: GROUNDFLOOR has been a great partner!
Corinne: Definitely! One thing that stands out to me in particular is how thorough GROUNDFLOOR is at doing due diligence on properties. Other lenders we’ve worked with haven’t been as attentive to this, and it really makes a difference. Additionally, GROUNDFLOOR’s rates and terms really can’t be beat, especially now that we have done enough projects to qualify for 100% financing through the Loan100 program. That option, plus the deferred payments, have really been a game-changer, and have allowed us to do more projects that we would have otherwise.
Evin: Also, the folks on the GROUNDFLOOR team are fantastic! The communication is great, and we’ve really enjoyed working with the team. Rachel [Lessard, Business Development Manager] and Nate [Coleman, Director of Inside Sales] have been especially wonderful -- they have backed us up and gone to bat for us a number of times. We can’t say enough good things.
What are some of your goals for your business in the next few years?
Corinne: Going forward, we’ll definitely continue working on flips -- we’re really enjoying the work we’re doing in that area. I think we also are interested in getting into new markets and learning more about their housing dynamics. We definitely want to expand out-of-state.
Evin: We also hope to eventually expand the kinds of projects we do, and get into multi-family, new construction, and commercial real estate. We’d love to see GROUNDFLOOR move into commercial funding.
Corinne: Yes, we definitely would love to grow with GROUNDFLOOR! We also want to test the limits of the kinds of projects GROUNDFLOOR is able to fund. We’ve been looking into some super creative projects, like mixed-use projects, or repurposing old structures like churches into condos. We would love to be able to get funding from GROUNDFLOOR for these kinds of initiatives.
If you could give a newer flipper one piece of advice, what would it be?
Evin: Be really honest with yourself when putting your budget together. You need to really examine the price per square foot and understand what home prices in the area are like. Corinne is really great at this -- it’s so important to pay close attention to your local market. It’s essential for the success of your project.
Corinne: First, you have to love this business! It takes a ton of time -- you have to sort through a lot of not-so-great properties before you find a gem. Second, don’t play games with the numbers. Like Evin said, you have to be really honest. Lots of people try to manipulate the numbers to make them work, and end up shooting themselves in the foot. You have to work with the numbers that you have. If you’re staying realistic, you won’t go wrong.
Thank you so much, Evin and Corinne! We love working with you!