Nick Ron of House Buyers of America: Why Integrating Proprietary Technology With Human Expertise Beats Traditional Real Estate Models

As a part of my series about the “Five Things You Need To Know To Succeed In The Real Estate Industry,” I had the pleasure to interview Nick Ron.

Nick Ron, the Founder and CEO of House Buyers of America, is a tech-savvy industry veteran with more than 20 years of experience as a real estate investor. He founded House Buyers of America in 2001, selling homes through his hybrid real estate model that balances technology with human, on-the-ground expertise. Nick took House Buyers from $0 to $50 million in annual revenue in the first three years. Today, driven by Nick’s continued focus on innovative technology and his keen marketing expertise, House Buyers of America is reinventing the Real Estate industry. An Ernst and Young Entrepreneur of the Year Award winner, Nick has been featured in Forbes, USA Today, Wall Street Journal, U.S. News & World Report, CBS News, ABC, NBC, and FOX.

Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the Real Estate industry?

Right out of college I started working full-time for CACI in technology sales and business development. By my third year at the company, I was bringing in half of the new business on a 12-person team. That is when I discovered I have a knack for sales and marketing. As I continued to learn about business, I read Robert Kiyosaki’s book, “Rich Dad, Poor Dad.” This piqued my interest in real estate and the idea of starting my own company. I built confidence as I learned about marketing and selling software. In 2000, I began studying real estate and immediately dove in. I founded House Buyers of America in 2001 as a side business while also working full-time at CACI. For nine months I would get off work at 5 pm and then run my real estate business until 10 pm. During this time, I continued to learn more and more about how to succeed in real estate. I talked to everyone in the business — agents, brokers, investors, and title companies. By doing this, I realized my experience in technology could bring a fresh perspective to an industry very set in traditional ways.

With this momentum, I charted my own course. I began purchasing rental properties. After six rentals, I pivoted into investing in quick-turn properties that I would buy, renovate, and sell. I did this with 20 houses in the first year, 100 houses in the second year, and 250 houses in the third year. Our revenue skyrocketed from $0 to $50 million in the first three years. As the company grew, I built systems and technology to help us manage multiple projects and keep everything on track. Before I quit my full-time job, I had one employee and we worked from my basement. After nine months I was making more money with my part-time business than my full-time job, so I left CACI and dedicated my time to House Buyers of America. The second year in business was a turning point and when our growth exploded.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

The first office we rented was in a mixed-use commercial space. Our office was on the top level. My team would go into the office early in the morning. Because we grew so quickly, we took up all the parking spaces before the other tenants got in! That didn’t make us super popular. Retail shops in our building would get upset that there was nowhere for their customers to park. There was a post office across the street and some of our employees would park in that parking lot and get towed. We moved to a bigger space that allowed for more than 100 employees. Later, as we expanded into different cities, we realized our headquarters office space was much too big. What we really needed was space in other cities to support the operations there. I learned if you need more office space, you can find it when you are ready, so don’t over-commit to too much office space.

Do you have a favorite “life lesson quote”? Can you share a story or example of how that was relevant to you in your life?

A quote that guides my business and my life is from Proverbs 15:22, “Without counsel, plans fail, but with many advisors, they succeed.”

There are four types of advisors I always turn to for counsel. Peer-to-peer advisors give me the ability to lock arms with those going through similar market challenges. I have also consulted with competitors to ask for advice, and in turn, I provided my guidance to them. I am amazed by how open people are with sharing advice, even competitors! I often look to senior advisors who have more experience than I do and can see further ahead. They have given me sound advice to successfully weather the storm. However, my best advice often comes from my employees and customers.

Are you working on any exciting new projects now? How do you think that will help people?

One of the things I am really excited about is our state-of-the-art software. It isn’t a new project, but it is one that is constantly evolving and improving, and we continue to invest heavily in it. As you know, there are a lot of steps to buying, renovating, and selling a home — coming up with an accurate valuation, estimating the cost of repairs, keeping contractors on schedule, buying materials, reviewing offers, staying in touch with buyers and sellers, etc. Our software automates our reporting, metrics, project tracking, and notifications to make sure we are not missing anything. That allows our team to spend their time building rapport with our customers or dealing with the issues that come up that aren’t part of the normal process.

Since we have built the software ourselves, if we see a process that is working really well in one area, we can apply it to another area by updating the software. The main reason the system works so well is that we sought input from every part of the company as we built it. Everyone who uses the system was part of the testing and development to make sure that it did what they needed. It wasn’t built in a vacuum by people that don’t know our business. Our software combines the functionality of at least 10 different types of programs into one integrated system. Because we’ve been developing it over the past 21 years, we are so far ahead of any of our competitors in terms of integrating technology into our business.

The faster we can buy “as is” properties and convert them into affordable, desirable homes that add inventory to the market, the better it is for everyone. And, if we can do that in a way that also gives people a more convenient way to conduct the transactions around buying and selling, that is even better.

What do you think makes your company stand out? Can you share a story?

There are a lot of high tech iBuyer real estate companies and there are a lot of high touch traditional real estate companies. House Buyers of America’s hybrid approach allows us to be high tech and high touch. We’re able to adapt to the way our customers want to work. If we have buyers or sellers who want to do everything online, we can do that. We’ve had sellers in other countries who were able to sign their closing documents electronically and use an e-notary. On the other hand, we have had sellers who need more attention or have more questions. They want to talk to a real person on the phone or in person. Unlike many of the iBuyers, we have dedicated representatives for each sale who can give customers that attention.

Another thing that makes us stand out is our deep knowledge of every touchpoint when buying a house in “as is” condition, making any changes, and selling it at the best price. A lot of real estate investors love to make deals, but don’t know the construction side of the business. We know the process for getting permits and estimating repairs and keeping contractors on track. Imagine a single mother who has been tasked with helping her elderly parents, in a different state, sell their home. There are decades of belongings that have accumulated in the house and it needs some repairs to really make it attractive to buyers. Working with House Buyers of America, the busy single mom can delegate everything to us. We will hire the contractors, supervise the repairs, get her parents packed and moved, and make sure the family is getting a good price. We can communicate online with the couple’s daughter based on her schedule, if that is easier for her, and work with the elderly parents in person or over the phone. Our 21 years of experience, backed by our innovative technology platform, allows us to help families like this every day. We can adapt to the needs of our customers and make the process easy for them.

None of us are able to achieve success without some help along the way. Is there a particular person for whom you are grateful for getting you to where you are? Can you share a story about that?

My wife, Ana, believed in me from the very beginning. She has been my biggest cheerleader, supporting me every step of the way. She knows first-hand how hard I’ve worked my entire life to become successful. When I started House Buyers of America, I did not have the connections or cash that surround typical entrepreneurs. However, Ana believed in me before I had any real business success. Not every wife would be super supportive of her husband quitting a solid, stable job to start a business from scratch. Whenever we have gone through business struggles, her faith in me has never wavered, even when I would sometimes start losing faith in myself. Ana also has a degree in Engineering Management and grew up in a family of entrepreneurs, so she has always been a great sounding board for my ideas and is not afraid to challenge me and ask the hard questions.

Ok. Thank you for all that. Let’s now jump to the main core of our interview. Can you share 3 things that most excite you about the Real Estate industry? If you can please share a story or example.

One of the things that is really exciting for the Real Estate industry emerged because of the pandemic. Since many people were forced to work from home for two years, companies realized that they don’t really need to have people in-person, on site, all the time. After years of insisting that people had to be in the office every day, businesses realized that they could operate effectively without everyone physically in the same space. That has created the newfound freedom for people to do remote work. From a real estate perspective, people used to limit themselves to being near their employer. Now they can move anywhere.

We are also seeing some rural and suburban areas that are ‘hot’ now that would not have been as attractive a few years ago because they would have been too far from an employer. This shift is opening up a whole new world in real estate and making pockets of the market more attractive than they would have been before the pandemic. Our team is no exception — nearly half of our employees will be fully remote by the end of the year. That has allowed us to attract the best talent because we can hire from anywhere.

We are also excited about being part of the solutions for the critical shortage of inventory in the housing market. A 2021 report from Freddie Mac stated that the U.S. housing market is nearly 4 million single-family homes short of what is needed to meet the country’s demand. New houses literally cannot be built fast enough. House Buyers of America brings new inventory to the market and turns houses that were not habitable into desirable properties that are affordable. A lot of our homes are starter homes, as opposed to the luxury homes that many builders are focused on.

Another thing about the industry that is really cool is how technology is moving things forward. It is getting easier and easier to do remote closings and to be able to help people buy and sell their home from literally anywhere in the world at virtually any time of day. Our software is part of this solution, and it is exciting to be creative with the buying and selling process. Innovation and technology make this possible. Of course, we are seeing more and more government offices go digital too, which helps move things forward.

Can you share 3 things that most concern you about the industry? If you had the ability to implement 3 ways to reform or improve the industry, what would you suggest? Please share stories or examples if possible.

One of the biggest concerns for everyone is Inflation. The rising cost of materials and labor is creating an affordability crisis in the Real Estate industry but also across virtually every sector. Government at all levels needs to streamline regulations to make it easier for a developer to buy a piece of land and develop it. It should be faster and easier to get permits and do inspections. When the buying and selling processes slow down, investors are stuck with carrying costs which can hurt cash flow, impact costs and cut into profitability.

Another concern is rising interest rates. The housing market has been a bright spot in the economy for the past several years. Hopefully the government isn’t too aggressive about raising interest rates in an attempt to keep inflation down. It seems that the Federal Reserve is anxious to raise rates after not changing them for the last few years. If rates go too high, that could curb demand in the market. The market will be fine even if rates go up because there is such a lack of inventory, but it will mean higher prices for homebuyers.

A third concern is how the Real Estate industry is hamstrung by local government offices that are not online. The pandemic definitely pushed many county and state governments to implement new technologies such as e-recording, electronic signatures and e-notary systems. Since a lot of county courthouses were closed, it was imperative that the local agencies find a way to do remote closings. Still, not every state and county are up to speed yet. It would be great to see some reforms in that area to speed things along.

What advice would you give to other real estate leaders to help their teams to thrive and to create a really fantastic work culture?

Take the time to hire good people who work well together. When I started my company, I lined up my title company, attorneys, real estate brokers, contractors, and home inspectors. We had a common goal, and I learned from them as I went along. Celebrate their milestones and achievements with company outings and happy hours. Additionally, show compassion to your employees. When someone is going through a tough time, they need to know that you are there for them and their family. This was especially true over these past two years.

Ok, here is the main question of our interview. You are a “Real Estate Insider.” If you had to advise someone about five non-intuitive things one should know to succeed in the Real Estate industry, what would you say? Can you please give a story or an example for each?

A lot of entrepreneurs think they have to do everything themselves. One piece of non-intuitive advice is delegate, delegate, delegate. Hire experts to do specialized work and then let them actually do that work. When I was starting out, I was still working a full-time job. I hired experts in all the functions I wasn’t skilled in — purchasing, estimating, construction, transactions, etc. — and let them do their job.

Another tip is to not just focus on the physical property. When you think of buying a home, you automatically think about what it looks like and picture the structure. But there is a lot more to it than that. I’ve seen deals where people were too focused on the actual house and glossed over issues with titles and other parts of the transaction. Deals can fall apart due to legal issues such as an old lien or other things that can cloud the title. Making sure the house passes the physical inspection and repairs and upgrades are done is important, but it’s also critical to make sure all the “i’s” are dotted and the “t’s” are crossed with the title as well.

Many business people, especially with small businesses, think the best way to cut corners is to not pay employees well. It may sound surprising, but the best thing you can do for your bottom line is actually to pay higher salaries. You will have happier, better motivated employees who will go the extra mile for your customers. You will also have less turnover. We know our employees are an investment, not an expense. I love seeing our people grow and improve their lives through the opportunities we create for them through training and competitive wages.

We also give our employees flexibility. The world doesn’t work like it did 50 years ago where people worked 9 am — 5 pm in an office, Monday through Friday. Things were changing before the pandemic, but that really accelerated the shift. We allow our team to work remotely. Not only does that reduce our overhead costs, but it also increases morale. If your employees feel valued and trusted, they will work harder for you. Our innovative software allows people to be engaged with their colleagues and communicate with our customers.

Think outside your industry. While it is important to know your industry well, and to keep learning about it, you also need to look at what else is going on in the world. If I had only focused on real estate, I wouldn’t have developed the great software tools that we have, and we would not be able to scale at the rate that we have or offer the consistently great service that we do. I saw what was going on with technology and knew we needed to incorporate that in our business.

A final piece of advice that may surprise people is that you should take vacations. House Buyers of America is built on systems run by an amazing team. That means I can go on vacation and know that the business will run well and I don’t have to check in all the time. Being able to get out of the office and relax allows me to come back refreshed and usually with new creative ideas.

Because of your position, you are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)

My wife and I work with Compassion International to sponsor children around the world who are in extreme poverty. Our goal is to break the cycle of poverty by providing these children with daily meals and paying for their education. You can make a big impact with a small amount of money. For example, your monthly Starbucks investment could sponsor several children and improve their lives dramatically.

How can our readers further follow your work online?

You can find us online several places:

· www.housebuyersofamerica.com

· https://www.linkedin.com/in/nick-ron-875b4716/

· https://www.facebook.com/House-Buyers-Of-America-271781772922372

· https://twitter.com/HomeBuyersUS

· https://www.instagram.com/housebuyersofamerica/

Thank you for your time, and your excellent insights! We wish you continued success.