| The CarMax of real estate
Virginia Business
May 2004
Selling
a home may be profitable, but it can also be a real
hassle. There’s the presale prep work, the 6 percent
real estate commission and all those strangers tromping
through your living room, not to mention the insulting
offers. Nick Ron, CEO of MAFC Residential in Chantilly,
thinks he’s found a quicker and less painful way
for homeowners to sell their houses — and still
make out on their investment.
His approach? He buys homes directly from homeowners
at a fair and competitive price — regardless of
the home’s condition — and then resells
them. “People call us, and in 48 hours, they have
an offer on their house,” Ron says. “And
then they’re free to move on to their next house.”
In 2001, MAFC Residential took in $1.9 million; in 2003,
the company sold 250 houses and revenues rose 2,700
percent to $54 million. The company has since expanded
from Northern Virginia to the Washington,
D.C., and Maryland markets, and in mid-April opened
an office in Virginia Beach.
Ron, 29, who once sold software for a government contractor,
relies on volume selling, direct sales and customer
service to get by on razor-thin margins. After a home
purchase, he has a team of contractors — who must
guarantee their work for a year — come in and
make over the home for a quick and optimal sale. While
some homes require a complete gut job, others need only
touch-up paint and a few shrubs. Either way, the home
is on the market within two weeks.
As a result, Ron says, MAFC Residential enjoys huge
economies of scale on services and materials and circumvents
pricey real estate commissions by keeping Realtors on
staff and listing the homes itself. And homebuyers are
increasingly approaching the company directly, he says,
attracted by a one-year home warranty and a $500 credit
with MAFC-preferred lenders.
Ron projects that his company will hit $1 billion in
sales within five years. His long-term goal is to go
nationwide, with a presence in every major city. “Real
estate transactions have been done the same way for
decades,” he says. “But we’ve found
that people are just begging for a better, simpler way
to handle their home sales. We think we’ll end
up reinventing this business.”
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