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Investing in success - Company finds gains in rehabbing houses

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Wednesday, 11 March 2009 01:00
In the roller coaster ride that is real estate, Vizion is enduring the ups and downs of the market.
Vizion, the Kansas City-based real estate investment company that specializes in rehabilitating houses and either selling them or offering them for lease option or rent, is expanding in a market that has scared many companies away.
“We just want to keep on expanding right now,” Aaron Thomas, CEO, said.
Thomas stands inside one of his company’s rehabbed houses at 444 Dartmouth in Waldo. The house, built in the 1920s, has had about $85,000 worth of work done, including hardwood floors, modern cabinetry, and new kitchen and bathrooms.
The house is an example of the “flipping” Vizion does. Vizion also is rehabbing a house down the street and another around the corner. Many of their houses have been in the Waldo, Brookside and south Kansas City areas, but their work also extends to Shawnee in Kansas and to Independence, Raytown and Grandview in Missouri.
“We really look all over the area,” Thomas said. “We look at anything that has a margin for us and any place we don’t mind going. We stay away from the bad areas. We look for the ugly kid on the block in a nice neighborhood.”
Vizion’s employees are set up to handle the difference facets of finding houses to rehabilitate. One employee spends his day looking through the Multiple Listing Service. He sends a list of homes to Vizion’s contractor, who Aaron Thomas said visits between 20 to 30 houses a day for quick evaluations to see if the are worthy of more analysis. The houses are put into a database to see how much investment would be needed to make an acceptable profit margin.
With the changing economy, Thomas said it is ideal for his company to have numerous options with each house.
“We are looking for homes with multiple exit strategies, whether it’s a flip or a lease option or to rent it out,” Thomas said.
Like many investors, Vizion saw most of its credit from banks dry up. Thomas used to run a financial planning service and worked with his clients to become real estate investors, allowing Vizion to have the capital to buy houses.
“A lot of times, they will buy the house, we will do all the work and then they will sell it or rent it out,” Thomas said. “Then we split the profits. It works out really well. We have been able to bring in a lot of people.”
Justin Ukaoma, who has used some different methods to get the word out about the company, handles marketing. Ukaoma uses Twitter, and works with Vizion’s Web site and other blogs to use multi-media to attract potential buyers.
“We do a lot on YouTube with making videos,” Ukaoma said. “We get a lot of traffic from people just searching online and also a lot of drive-by traffic.”
Jason Thomas’ home is serving as Vizion’s temporary office; however, all three men admit it is time for the company to have at least a small office space.
Jason and Ukaoma are both licensed Realtors and show many of the Vizion houses. Jason said, in the current market, it takes some extra work with buyers but the end results are worth it.
“If you take someone who’s not educated and you educate them, it really is a great time to be a buyer,” Jason said. “There is an $8,000 tax credit from the federal government for buyers. And we’re not going to see prices this low. It’s not going to be too long before things turn around.”
Aaron said while much of Vizion’s outlook has been on houses priced from $120,000 to $300,000, the company will likely become more involved in properties in the $70,000 to $130,000 range, which are ideal for rentals or lease options.
“We’re finding that all our rental properties and lease options are going like that,” Aaron said. “We can’t keep up with demand. There’s a big opportunity on the rental side. We can also help clean up (a renter’s) credit and put them in a home eventually. They might not even have the mind set that they can own a home, but we can help them get cleaned up and get them into owning a home.”
Aaron said the company’s business model changes from week to week and month to month.
“We’ve constantly had to adapt,” Aaron said. “It’s been a learning curve. ... The market could stay the same or it could head south fast. The (legislation) that was passed to help with foreclosures could make a small dent or a big dent. It’s just too hard to tell at this point.”

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