Safe Home Offer — The Art of Flipping Houses

Written by: Kyle McCorkel, owner

I’m Kyle McCorkel, founder and owner of Safe Home Offer, a marketing company that specializes in finding real estate deals off market. We buy and hold, flip, and wholesale properties, helping current owners out of financial distress and turning those properties around to provide safe and affordable housing for buyers or renters.

Founder’s Story

I really started laying the groundwork for Safe Home Offer in college. I majored in Industrial Engineering, but minored in Entrepreneurship and Business. Really, my original career choice could be seen as providing the seed money for my real passion – owning my own business.

As an engineering consultant, I traveled for 95% of my job. I wanted to start a family and knew I didn’t want to be spending that much time away from home. As I started looking for a new job in the same field, it quickly became clear to me that all the jobs sounded awful. Maybe they didn’t require as much travel, but the work itself wasn’t appealing anymore. It didn’t feel like a reason to get out of bed in the morning.

The most glaring red flag for me was feeling like my job was a sacrifice. Instead of being grateful for the lifestyle it afforded my family, I felt like my job was causing my family and me to sacrifice for it. There is nothing more important than family, and when my job started becoming more of a lifestyle that didn’t work for us, I knew something had to change. More subtly, I started feeling bored, not engaged, and not excited about the work anymore. In any industry, there will be lulls and monotony, but when I was finding it impossible to look at the big picture of what I was doing and feel at least some level of excitement. It just wasn’t for me anymore. I wanted to look forward to something other than vacation.

I remember the exact moment those feelings became the last straw. I was traveling Monday-Thursday or Friday every single week. I had been married for a few years, and we were beginning to talk about starting a family. I had already started cultivating the seed of doubt I had about my job and career, knowing that that much travel was not sustainable for the level of engagement I desired to have with my family.

I was coming home to Harrisburg from Chicago on a Friday night, and the weather dictated that all the flights get grounded. Wet and tired, I finally found a hotel at 2:00 in the morning. Three hours later, at 5:00, I had to wake up to book a flight home. Then in less than 48 hours, I would be in the air again for the next consulting job. My social life was gone, I never got to see my wife, and I was living a life I had never envisioned.

Like I said, I began laying the seeds to own my own business in college. The job I hated became the water and sun those seeds needed to take root. To continue with the gardening metaphor, I wasn’t ready to quit my day job before seeing some fruits of my labor. It was very important to my wife and me to have a plan. We switched all of our finances and budgeting to live off of her salary alone. We lived below our means and banked my entire salary as an emergency fund. We wanted to know that if my ventures failed, we’d still be able to pay the mortgage. Once the pressure was off, it was a lot easier to focus my energy on building my business versus just paying the bills. The time between the Chicago incident and being full time in real estate investing was five years.

Challenges

For the most part, I think the market challenges are business opportunities for me. It’s no secret that we’re dealing with a housing shortage. Governmental red tape and local zoning ordinances are making it very difficult and very expensive for new construction to begin. Sure, there are supply chain shortages, but we’re beginning to see those get back on track, and yet, there just isn’t as much construction because the government won’t get out of the way.

This becomes an opportunity for us because we aim to put already existing homes back on the market. As a generalization, the homes we work with are dilapidated. Their owners are maybe underwater on them, owe back taxes on them, or are otherwise incapable of their upkeep. For the most part, my company lets these people know that we can be an option for them to get out from underneath the burden of their home.

Once we own the home, we either fix it up to rent it ourselves or flip it. If those options aren’t lucrative for us specifically, we wholesale them to a buyer who does see them as an opportunity. These are homes that wouldn’t otherwise see the market. Agent fees, needing to clean the home up, and time are all pressing issues for the homeowners we help. We cut out all of those barriers and provide a good solution to their pressing problem.

Another governmental challenge is the current tax code. While I haven’t found a good solution to this other than a third party candidate, it continues to plague the flipping industry. Because of the nature of the industry, flippers tend to look as though we are “rich” when the government looks at our tax returns. We have a constant flow of cash and assets, and the government sees those as dollar signs. Because of this, many would-be great flippers are discouraged from the business, further ingraining the problem of not having safe, affordable housing. If we don’t have people willing and able to fix up neighborhoods, the neighborhoods won’t get fixed. There won’t be inventory on the market either.

Aside from the government and market challenges, we are also a relatively small business in comparison to many of the companies advertising on TV and billboards. We often get called at the same time as these other companies and have a hard time competing against them initially. They can swoop in and make much higher offers than we can, but their closing rate is atrocious. They may tell a homeowner that they will pay them $20k more than we will, but when they can’t find a buyer at that price, they cut off communication or just turn around and break their contract. We have a 100% close rate, however. We may not be able to offer as much, but we can promise with 100% certainty that we will close and with a lot less runaround than the other guys. I never make an offer that I can’t back up with a guarantee.

OPPORTUNITIES

Our biggest and most exciting opportunity is the state of today’s market. The housing supply is at an all time low. People need safe, affordable housing. The government isn’t making it easier for developers to provide new construction. That’s where we come in. There are so many homeowners who want out of their investment. Whether it’s because of relocation, health, or monetary issues, they just can’t keep up with maintenance or payments.

Many times, however, either the state of these homes dictates that they would not do well on the market or the owners don’t have the time it takes to list, negotiate, and wait to settle. So often they feel stuck and end up holding on to their home and losing money month and after month and year after year. However, when we let them know there is another option, that we are able to help them out of their situation, we are able to then put that home in liveable, safe condition and provide more housing for buyers or renters.

The other opportunity is the emergence of tech and tools making it easier for the average person to learn about housing values and see what is available without a realtor. Agents are little more than gatekeepers for the MLS – and they cost a great deal for that access. Anymore, people are learning that listing with an agent is just too expensive. On just a run-of-the-mill $250,000 home, the listing agent makes $15,000. With tools like Zillow and Redfin, even the MLS isn’t worth that price tag. Homeowners can list their home for even $10,000 less and still come out with more money than if they had hired an agent. These tools are making the market more liquid and more accessible. People are learning better ways to do business themselves.

Advice

The best advice I got was from a book called The E Myth Revisited by Michael E. Gerber. The book lays out how to get organized and give your business the best chance at succeeding. It outlines the importance of creating an organizational (org) chart, creating an SOP (standard operating procedure) for each position within that org chart, and then finding the right people to fill those roles. In short, it advocates responsible delegation.

Too many business owners try to fill all the roles themselves, causing mistakes, frustration, and ultimately, burnout. Once these SOPs are filled out, the business owner should really reflect on themselves, their personality, and their strengths and weaknesses. What, realistically, is the job they want to do and are they really the best person for that job?

Networking allows these business owners to interact with and get to know other professionals in their field who can either help fill the roles or point them in the direction of people who can. I never assume I already know it all or am always the best person for all the jobs. I look forward to learning new procedures, techniques, and methods as the world and the market change. I enjoy working with and talking to all different kinds of people with skills much different from my own who can compliment me and business to make it the best it can be.