New Again Houses growing a robust and successful franchise
The Northeast Tennessee-based company was ranked by Franchise Business Review as #24 in the nation overall and #4 for franchises with less than 80 units.
Matt Lavinder learned entrepreneurship at an early age, thanks to his parents who operated a caramel corn shop in Kingsport’s Fort Henry Mall.
“I literally grew up in that mall,” he says, adding that his mother later opened a shoe store. After graduating from what is now King University with a business degree and concentration in accounting, Lavinder decided he really did not like accounting. A year later, he was back in college, this time earning a Master of Divinity degree at Duke University, but Lavinder again decided he did not want to enter the ministry.
For the next 12 years, he coached men’s soccer and taught freshman history at King University.
“I realized at some point that I needed to build things,” Lavinder said, acknowledging that he lacked useful skills with his hands but had learned through coaching how to build teams and organizations.
By mid-2005, he was dabbling in the business of flipping houses in Bristol, something he describes as a “mom and pop business that no one has scaled and brought technology to.” Lavinder decided there was an opportunity to build his own company around incorporating business process technology into house flipping.
“I was doing 10 (house flips) a year in Bristol, but that grew to as many as 40 a year when we expanded to Kingsport and Johnson City,” Lavinder said of the company he launched full-time in 2010. “We had to have systems because I could not be on every site all the time.”
By 2015, he began to consider how the company named New Again Houses might evolve into a franchising model that provides its proprietary software to those individuals who are largely solo owners of their flipping business. In fact, most of those individuals who flip houses subcontract the work.
“We built pretty sophisticated systems to manage the process for us, but “it was overkill for our local market, ” Lavinder said.
Four years after first beginning to think about franchising the software he had built, he executed agreements with individuals in Charlottesville, VA; Knoxville, and Nashville. Today, New Again Houses has 41 franchisees in 20 states and is adding about two franchisees a month.
The company explains on its website that franchisees will be able to “leverage the tools of a national franchise system to create competitive advantages with off-market lead generation, robust training, sophisticated analysis software, access to capital, national partnerships, and construction support.
Having been in the house flipping business for about 18 years, Lavinder says that “new construction is one thing, (but) remodeling is quite different.” The typical house that he and most of his franchisees buy is around 1,400 square feet – workforce housing in his words. On average, the investment before the residence is sold again is around $75,000 for the total remodel.
“We could have done it faster,” Lavinder says in reference to the modest growth in his franchise business. That is because he chose to self-fund rather than take on debt or sell a portion of the company to private equity firms.
“We measure our success in the profitability and unit economics of our franchise locations rather than the size of our system,” he explains. “Our goal is to have each franchisee flip 12 houses a year. We want them to be able to do that (volume) and still have a quality of life with a lean business model.”
That formula has obviously been successful with a recent ranking from Franchise Business Review placing the company as #24 in the nation overall and #4 for franchises with less than 80 units.
NEXT: One of his Knoxville area franchisees is also an individual who has a $20 million fund that provides capital exclusively to New Again Homes franchisees.