A Conversation With … Clay Trautman

You have a career in insurance. How did you get into home renovations?
I thought I would take it on as a hobby and see how I enjoyed it, and ended up liking it a lot more than expected. The way our business model works it’s very profitable, but also it’s helping out residents of Springfield. We’re literally bringing residents into Springfield and into Christian and Greene counties because now there are more opportunities for them to purchase a home versus just to rent. It’s providing more opportunities for more long-term growth in the city.

What is your company’s geographic reach?
When we first started, we actually reached out all the way to West Plains, up to Kansas City, but within the last two months we’ve run across a bunch of projects that are here in Springfield alone. So we’ve actually decreased our footprint. In the pipeline over the next three years, we’ve got about 120 houses here in Springfield. A couple of them are going to be new builds, but as far as the bigger projects we’ve got going, we’re under contract for 26 houses right now and that we’ll be purchasing toward the middle of December. I’m teamed up with an investor, and then we’re contracted to go in and renovate it for the investor. We’ve got about five projects right now that we’re working on wrapping up. Since April or May, when we opened up, we’ve done 14 projects.

How do you find the homes you want to flip?
A lot of it is just trial and error. It’ll take me probably 20 to 30 houses to look at before I find the right one. The things we primarily want to look at are ones that just need a little bit of a facelift, some that might need new flooring and paint. As far as the actual flipping process of buying and selling, that has actually decreased a lot intentionally on our end. The other percentage, 80%-90%, of what we’re doing now is going into homes where there’s already a homeowner or a tenant living in there and just giving the facelift of new appliances, flooring, paint and we can do some remodel work as far as creating some additional bedrooms, larger kitchens. It’s been a lot more profitable for us and efficient to go in and just remodel the existing homes with someone already there.

You’ve said you want to change the landscape of Springfield. Is that behind your focus on projects in the northwest side of town?
Absolutely. It’s no secret to anyone that if there’s an area to develop for long-term sustainability of Springfield and even Greene and Christian counties, it’s to get those permanent families into their homes. The issues that are coming up, whether it’s opioids or poverty, numbers back that up where the properties that happens at are generally from tenants who are renting and don’t own.

Access to affordable and safe housing was a red flag identified again by this year’s Community Focus Report. As you are updating these homes, is this in turn pricing lower-income families out of these markets?
It does to a certain extent. A lot of individuals might be surprised if they think about putting more flooring or updating appliances. They might think that’s going to double the cost of that home, and that’s really not the case. As far as affordability for homes that are for homebuyers, the city and the county actually have a lot of really great incentives going on for first-time homebuyers that make under a certain annual household income.

What’s the sweet spot in price for the homes you are remodeling?
I’ll look to purchase anything from $30,000 to $50,000, which is a pretty fair price here on the northwest side and in central Springfield. We’ll look at selling them for around $90,000 to $100,000. On the renovation side, I don’t look to get into the high-end homes for a couple of reasons. A main one being that’s where a lot of competition is. I’d say probably $100,000 is the lowest one we’ve renovated all the way up to about $300,000. You’re getting homebuyers, especially young professionals, who are living in those homes that are really taking that next step in their profession and have a little bit more disposable income to kind of fix up the house and customize it.

Clay Trautman can be reached at clay@tcastgroup.com.