UB Insider #46: Helping Flip the Red-Hot Real Estate Market
About this episode:
In residential real estate, it’s a seller’s market, and quick renovations can increase a house’s value for homeowners or investors. Erin and Gabe Gilliam own and operate Miracle Method, a local franchise of a national company that specializes in repairing and restoring bathroom and kitchen features like tile and countertops. In this episode of UB Insider, the Gilliams talk about why these areas are so valuable, and how raising house prices in this way helps neighborhoods thrive. Subscribe to our podcast or download this episode on iTunes, Stitcher or Google Play.
Lisa Christensen: Hello and welcome to UB Insider. I’m Lisa Christensen, Online Editor at Utah Business magazine. The residential real estate industry in Utah is hot, and it’s a seller’s market. Erin and Gabriel Gilliam own and operate Miracle Method in Salt Lake City, part of a franchise that specializes in quick renovations of rooms like the bathroom and kitchen to help boost a home’s value. Welcome.
Gabe Gilliam: Thank you.
Erin Gilliam: Thank you, Lisa. Thank you for having us.
Lisa Christensen: So tell me, what is the state of real estate in Utah right now.
Gabe Gilliam: From my experience it’s really hot. We deal with realtors, home owners, flippers, and they all want a quick remodel to the two most important parts, the bathroom and the kitchen. And they want it done fast which we usually can do in two days. And that allows us to go in there and help them get what they’re trying to accomplish versus a whole month out.
Lisa Christensen: Why are those the two most important rooms? It’s just something I’ve always wondered.
Erin Gilliam: Yeah, that’s a great question. You know, I think it has to do with it’s two of the rooms in which people spend the most amount of time and even a lot of personal time. You know, cooking with family friends or having guests over, the kitchen is a go-to place for entertaining. And for bathrooms, it’s just kind of a place of refuge in a home. I think where people can go and relax and take a warm bath. And I think they’re just two places that when people go into a home to look at, they can really envision themselves being in those places.
Lisa Christensen: So what are some of the trends that these investors, these flippers or these home owners are looking for when they update those areas of the house?
Erin Gilliam: Sure, yeah, so across the board we see a real trend towards light and bright, which I love because I think that light and bright has real timeless appeal. Light grey is a new neutral with a clean white trim that really pops. So Gabe and our franchisees across the country are spending time with home owners in their kitchens every day and it seems like everybody is really interested in whether it’s white countertops or a real white or grey cabinet, it’s just a very white and light, bright, very simple. So, yeah.
Lisa Christensen: So you mentioned the flippers, people who buy homes, renovate them, polish them up and then sell them, obviously for a profit. Tell me about that trend in Utah and how it’s been growing over the last few years.
Gabe Gilliam: Basically, I think it’s growing from the fact that there’s not homes that are totally bank owned, but they’re more modern and basically a good structured house that just needs a few updates. And because that’s causing, it’s so hot that there’s not a lot of inventory, so they’re taking rental properties and switching them into. And it’s just a quick fix of being able to do a bathroom or kitchen. You don’t have to do a full tear down or remodel.
Erin Gilliam: Yeah, I would agree. I think, you know, particularly in the Salt Lake City market where there has just been such a high demand for real estate, there’s not nearly as much of the bank owned or foreclosed properties that we might have seen a few years ago early on in the hot market. But there’s still really great values and opportunities out there for homes that were not owner occupied or maybe rented properties.
A lot of the homes here have great structure and they just need some minimal updating and upgrading. And it doesn’t leave maybe as much room for flippers to make profitability, but certainly there’s room. And I think that’s why surface refinishing is such a great fit for flippers and why we’ve been doing a lot of work for them. Because we, on average, are 75% less than the cost of traditional replacement. And because our process is two days or less we can get in very quickly and do a beautiful upgrade and they can get the home flipped that much more quickly. So it’s definitely an exciting time to be a part of the market right now.
Lisa Christensen: Yeah, and everybody wants to get that house turned around more quickly anyway, right?
Erin Gilliam: Oh, for sure. Convenience and affordability I think are always important to customers, but particularly in this market where real estate is going so fast, if they’re looking at an opportunity to get something upgraded and remodeled that’s going to take two days versus something that might take weeks or months, it seems like a no brainer. So time is certainly of the essence is this pretty competitive market.
Gabe Gilliam: They’re going to sell it in that week or two week timeframe anyways, but they can get so much more if their bathroom or kitchen is in better condition. So that leads us a good market right in.
Lisa Christensen: That does sound like a really good place that you have in the market. What does this kind of real estate, and the flipping, what impact does that have on the real estate market as a whole?
Erin Gilliam: Well, you know, when there’s such low inventory and a really high demand for move-in ready properties, flipped homes assist buyers in getting what they want. Flippers go in and they update the homes and they look great. The kitchens are beautiful, the bathrooms are beautiful and the buyers want that. You know, we do see an uptick in millennial buyers at this time in the market.
There has been a little bit of pent up demand with millennial buyers, and so when they go in they have a little bit more of a demand for a move-in ready home. And so, I think that across the board as flippers or home owners are moving in and making these improvements, it’s increasing real estate market and values in neighborhoods. So whether it’s a home owner or someone looking to sell their home or a new buyer, when improvements are being made it just goes to further increase the value of homes and neighborhoods.
Lisa Christensen: Now Erin, you’re involved with Miracle Method on a national level, correct?
Erin Gilliam: Yes, that’s true. I am the Director of Marketing for the corporate office based out of Colorado Springs, Colorado. We have 140 franchisees throughout the county, local, small independent business owners who operate under the Miracle Method brand. And Miracle Method has been in business for over 35 years. So yeah, it’s an exciting opportunity I think to have my position at the corporate office and then also have my husband who owns the local franchise. So yeah, it’s fun.
Lisa Christensen: Can you speak to what this trend looks like nationally?
Erin Gilliam: Sure, absolutely. I mean, across the board we’ve seen significant growth in our revenues in North America. We operate both in the U.S. and Canada and we have just seen really consistent, strong, steady growth both in the residential and commercial sectors of our business. We do, of course, upgrades in bathrooms and kitchens for home owners across the country. We also do a lot of work for universities, colleges, K through 12 schools, because we do a variety of surfaces. We really refinish a variety of surfaces. And so we couldn’t be more excited about the growth that we’re seeing. It’s an incredible franchise opportunity that we have, and a really strong, proven model.
Lisa Christensen: Well, where, given your success right now and the way the market is now, what do you see the future of real estate being, and the future of your business?
Gabe Gilliam: Well currently we’re growing at 10-20% even in the month, but from year to year it’s been increasing. So I assume as there’s no new homes, they’re going to have to build newer homes and that still causes work for us at that point in time. I don’t see any slowing right now, especially as more millennials, when they go into it it’s a very different attitude that they have towards it versus baby boomers. They’re upgrading so that they can stay in their homes. And so more homes are needed, basically, is the problem that’s occurring.
Lisa Christensen: Is there any way, is there any solution that you see to this? Or are there going to have to be some creative solutions, just given the ever-expanding footprint of a lot of cities and communities?
Erin Gilliam: Oh gosh, you know, I mean, Gabe and I are not by any means real estate experts or realtors, but just from our small experience, you know, in running and operating a local business, I mean, certainly it does seem like we’re going to have to do something in the community to keep up with the strong demand. I mean, job growth is expected to continue, and housing prices are expected to grow, and demand is expected to grow. So I certainly don’t know that we have a solution for that, but it does seem like there’s going to have to be something.
Gabe Gilliam: One solution that I have seen is that we do a lot of work in downtown buildings that were abandoned that they’re updating and changing, and so we’re doing work inside those. I’m assuming it’s lost space that now they’re using that space.
Lisa Christensen: I didn’t mean to spring anything on you, but that is fascinating. And that is a use of old buildings that I hadn’t considered before.
Erin Gilliam: Yeah, you know, I was going to mention too Lisa, if it’s okay, is that one thing that Gabe and I were discussing earlier today is that we have seen a trend with baby boomers in the market. Some of them are moving so they’re selling homes that they’ve lived in for a long time. And certainly those homes are prime for being remodeled and upgraded which is a perfect fit for Miracle Method, but we also have seen a trend of baby boomers trying to stay in their homes and age in place longer. And we do offer a full range of bathing safety services. And because of that we really do have a strong, kind of, indication that those home owners are trying to stay there longer. So that has been an exciting trend, I think, as well.
Lisa Christensen: So you guys have a lot of clientele on both ends of the demographic spectrum.
Erin Gilliam: Yes, yes, absolutely.
Lisa Christensen: Well that’s a good place to be, right?
Erin Gilliam: It is.
Lisa Christensen: Well thank you so much for coming in today, I really appreciate it.
Erin Gilliam: Yeah, thank you so much! I was just going to say too that if anybody did want any more information about Miracle Method, you could certainly visit our website at miraclemethod.com, or reach the local franchise at (385) 212-3281.
Lisa Christensen: Ok. Well thank you. We will have that information on our website as well.
Erin Gilliam: Perfect, thanks Lisa.
Gabe Gilliam: Alright, thank you.
Lisa Christensen: Thanks also to Mike Sasich for production help today. You can follow us on social media at @utahbusiness or drop us a line at firstname.lastname@example.org. Thanks for listening.