When you’re repairing a home, speed is essential. Whether the homeowner is a consumer or an institution, they want the repairs done quickly.
For a company orchestrating the repairs, that means getting the work identified, estimated and signed off on and then getting a contractor in place to begin the work.
Keeping Vendors Happy and Paid
PunchListUSA is a marketplace that digitizes home inspection data for instant estimates and online ordering of home repairs and renovations. Kearns was appointed CFO in April and tasked with leading the company’s financial strategy as it expands its proprietary technology and consumer service offerings.
An important part of getting those home repairs done quickly involves payments.
One segment of PunchListUSA’s customers is homeowners selling their residences but have some repairs needed to complete the home inspection. This is typically a $3,000 or $4,000 job, and of course, they want it done quickly to complete the sale of the house.
The company hires a contractor to perform the services. It pays the contractor weekly and collects from the customer at some point in the future when the services are completed.
“That does create, as you might imagine, a fair amount of strain on our system,” Kearns said. “We need to keep our vendors happy and paid and we need to manage our cash receipts and revenue — so, with those two, the shortest amount of time, the better.”
Working to Eliminate Checks
The company’s customers also include institutional clients who own single-family rental units and buy properties. For them, completing a renovation is a $20,000 or $30,000 job on average.
“That takes longer, but every week into that process is less revenue to that investor,” Kearns said. “So speed is important and oftentimes takes multiple trades to complete that level of work.”
The company also meets the ongoing maintenance needs of both retail and institutional customers.
All of PunchList USA’s payments are credit-card processed. For invoices, the company uses third-party service providers, and it’s working to eliminate paper checks in favor of ACH, wire and credit card processing. Most of its checks that go out are for contractors who don’t accept ACH.
“The people that are only accepting checks are fewer and fewer because the speed at which they get access to cash, obviously, is much greater when you’re not dealing with us cutting a check, putting it in the mail and sending it,” Kearns said.
Keeping Up With Inflation
To meet the demands of both the retail and the institutional customers for speedy repairs, PunchListUSA collects and uses data in terms of pricing, getting estimates and lining up contractors.
Speed has been especially important during this time of inflation when materials prices and labor rates may rise between the time an estimate is given on a large renovation job and the time the job is approved and then completed.
“We are doing dynamic pricing, pulling that out, but right now we’re keeping up with inflation on our materials costs and our labor costs,” Kearns said.
Looking ahead, Kearns said that if inflation and rising interest rates cause home sales to slow, more people will choose to stay in their homes and renovate them rather than sell them.
“I think renovations and repair work are constant,” Kearns said. “Where we think the real benefit to our business is, is the ongoing relationship with the homeowner.”