An Irving-based company that buys homes across the country to resell to pinball machines expects to double its national footprint this year.
New Western, which has purchased more than 40,000 homes nationwide since its inception in 2008, says it is on track to expand its footprint from 40 to 80 locations this year. This includes offices in new markets such as Chicago and Washington, DC, and additional locations in existing metropolitan areas.
“We’re in rapid expansion mode right now,” said Kurt Carlton, co-founder and president of the company. “We really go to all the big cities. There’s really only a handful that we won’t be in by the end of the year.
Unlike iBuyers such as Opendoor and Offerpad, New Western does not repair homes itself. Instead, the company sells the properties to a network of 100,000 rehabilitators — including 20,000 in Dallas-Fort Worth — who then sell or lease them.
Last year, the company sold about 1,800 homes to its rehabs in Dallas-Fort Worth and 10,200 nationwide. This year, he expects to sell more than 15,300 homes, including more than 2,600 in North Texas. This will bring approximately $569 million of residential real estate back to the local market.
Carlton describes many of his rehabbers as “corporate refugees” who had typical day jobs and wanted to try something new. The company hosts events to find rehabbers in new markets, but often relies on word of mouth.
Carlton and CEO Stuart Denyer launched the company in 2008 during the foreclosure crisis, targeting investors who wanted a faster method of acquiring homes than working with estate agents.
“They could just come to us and get a house from us the same day,” Carlton said. “We were able to serve all of these real estate investors through a process that they appreciated.”
The company focuses on vacant properties, such as fire-damaged homes. More than 16 million homes are vacant in the United States, according to a LendingTree analysis of US census data.
New Western is primarily shopping for those vacant homes rather than competing with homebuyers, Carlton said. The average age of a property the company is shopping for is 60 years old and the average price is $232,000.
“We’re in the midst of an inventory crisis, an affordability crisis, which is driven by a lack of supply and a glut of demand,” Carlton said. “Our job is really to find those homes and line them up with a local rehabilitator who can get that property back on the market.”
Carlton said that due to low inventory in the market, pinball machines might not need to do so much to sell a home. They may also be motivated to sell their properties at a faster rate.
“Because of material costs, holding costs and all of those things, they want to get inventory out a lot faster,” he said.
With its plans for rapid growth, the company has expanded its management team. This year it added Dipak Joshi, a former financial controller at Google, as chief financial officer and Kuba Poraj-Kuczewski — who has led marketing at tech companies such as Redfin — as chief marketing officer.