HGTV's Ken & Anita Corsini on real estate, reinvention, and being all in.
When Ken and Anita Corsini first entered the world of real estate in 2005, the scene was very different than it is today. “It’s amazing to think back about the market cycles we’ve been through,” Ken recalled. “2005 was a screaming hot market, then 2008 brought it to a screeching halt. We were able to thrive in the downturn, but it was mainly because we have always been able to quickly change strategies.”
“Every couple of years we see the market is doing something new, reorient ourselves, and implement new strategies to be successful,” Anita added. “I think they could re-make that sci-fi movie, Adaptation, about us and real estate!”
Not Newbies, but New Ideas
The couple, perhaps most widely known for their hit television series, Flip or Flop: Atlanta on HGTV, is not nearly as new to real estate as they are to television. The two bought their first house, “right out of college” as Anita said, when they were both 23 years old in 2000. Less than two years later, they purchased two acres and began building the home of their dreams. “From building retaining walls to laying secondhand hardwood flooring and pouring our own driveway, we learned a lot about homebuilding,” Ken said.
When the house was done, they had three very important results: their “very own slice of heaven on two acres,” an investment property in the form of their first house, and an appreciation of the potential for their future that lay in real estate. Also, on that slice of heaven sat a red barn that served as an incubator for their current real estate business, Red Barn Homes, for the next four years.
In 2005, Ken departed a corporate job to invest in real estate full-time. Anita left her first passion, teaching A.P. calculus, in 2007 to officially join him in the business. By this point, Ken had kept his head above water through the worst of the housing crash and “houses were cheap and plentiful in Atlanta,” as he described it.
Anita put it a little more bluntly: “The world was our oyster.”
The two began acquiring distressed properties, fixing them up, installing tenants, and then selling them to investors in the first manifestation of the turnkey model. That model continued to evolve over the course of the next seven years, only to change when “the hedge funds descended on Atlanta and started gobbling up the inventory,” Ken said. “It was time to reinvent ourselves again. Prices were creeping up and you couldn’t find deals that made sense for our model anymore, so it was getting difficult.”
Today, in addition to their central role in the television coverage of their deals all over the Atlanta metro area, the Corsinis have launched a real estate brokerage, Red Barn Real Estate, which has grown to 100 agents in its first year, and are busy running their boutique new-construction business, which launched in 2014.
“It really just made sense to make that change,” said Ken. “We had to pivot because the market was creating a situation where it enabled us to sell houses retail rather than directly to investors.”
“Our average rehab right now is hovering [in cost] around $89,000,” Anita said. “That’s practically like building a new house. Today, our time and energy are best spent selling to retail, but in a year, I might tell you something completely different. The Atlanta market can be tricky. If you stick with the same things you have always done, your opportunities are going to dry up quickly.”
Meet Ken and Anita Corsini at the upcoming Think Realty Conference & Expo in Atlanta, September 22nd, where they are the keynote speakers. Tickets are only $55 and space is limited. Get yours now.
Strategy & Story: Today’s Favorite is the Fix-and-Flip
At present, Ken and Anita are focused on properties in the metro Atlanta area (see map on opposite page), which Ken finds amusing since at one point he had sworn off a certain metro ZIP code because of the high incidences of mortgage fraud and drastically distressed housing in the area. “It just goes to show you should never say never!” he laughed.
“Today, nearly all of our deals are inside the perimeter because there are so many blighted neighborhoods that are turning very quickly and there is also a large inventory of older housing stock. With the huge demand right now from buyers to be close to Atlanta, there is so much interest in that area,” he said.
One thing that makes the Corsinis’ homes stand out from the crowd is Anita’s keen eye for going just beyond the norm in both design and staging. Interestingly, she credits her success in this area not just to careful analysis and cost-benefit equations, but to her love of “the story” behind every deal they do.
“You are taking an old house and basically turning it into something new, but the story in the property is still there,” she said.
An example of this is a 100-year-old tear-down that the two opted, ultimately, not to tear down. “I hated to even let Ken sell that one because I love it so much,” Anita laughed.
The property will likely be featured during the second season of their television series, and it was, in Anita’s words, “very dilapidated” at the time of purchase. “Dilapidated is a really nice word for it,” she said.
“The foundation was literally held up by rocks,” Ken explained.
To Anita, the deal did not just look good on paper; it also was intensely appealing from an emotional angle. “When we looked at the property for the first time, we realized we could bring that house back to life in a way. Sure, the house itself is not alive, but its story could be.”
About $100,000 worth of rehab work later, the property is stunning and the neighborhood is thrilled. “Neighbors and even some of the people who used to live in the house came by to see what we’d done,” Ken said.
“That restoration and renovation is a celebration of the fact that the house, the story, was saved,” Anita added. “Does it look like it used to? Not at all, but the footprint and the story are still there and the property itself is now part of the community’s story again instead of being a negative for the neighborhood.”
“Ultimately, we opted to put that one on Airbnb rather than sell it,” said Ken. “It’s come a long way from the house some of the neighbors wouldn’t even drive past if they could avoid it!”
Another favorite story for the Corsinis is a former boarding house they restored last year. “That house was gutted. It was down to studs and framing,” Ken recalled.
“Our project manager didn’t want to touch it,” Anita added.
“It had a really bizarre layout, just a series of rooms. We figured it was a boarding house of some kind. The upstairs and downstairs were just hallways and bedrooms,” Ken said. Despite the strange layout, the property had a great deal of square footage, which is why the two ultimately decided to take on the project. Over the course of the rehab, they learned that the original owner was a grandmother who raised over 100 foster children in the home. Many of them returned when they learned the house had been restored, renovated, and listed for sale.
“They couldn’t have been more thrilled. The thing is, if you have memories in a home you grew up in, those memories are valuable. Those are the things you want to hang onto, those diamonds in your life,” said Anita. “This house was destroyed and hurt; it was sad. Then we came in and sure, we changed everything, but it brought the house back to life and now a new family lives there and the story continues instead of just being over.”
The Future is Flexibility
Anita may joke about loving a property so much she cannot let Ken sell it, but the two do flip the majority of their projects. However, when the situation is right, they employ other strategies.
“We are always evolving, and this is a prime example,” Ken observed. “For example, we recently picked up a whole handful of townhouses. Some of those will definitely play into one of our newer investing tactics: Airbnb rentals.”
He continued, “We do not maintain a massive rental portfolio, but we do have a number of Airbnbs right now.” Ken noted Airbnb is an ideal fit for any investor who is holding a property longer than planned and for investors experiencing shifts in their local markets that may be affecting their planned timelines.
“People do not realize you do not need a premier location in order to run a really successful Airbnb investment,” he said. “For example, in our area, there are not a lot of hotels and we’re not really a big tourist destination, but there are a lot of kids’ sports tournaments. People come up here with their families and need a place to stay. They need choices and a lot of times they need something other than a hotel room. Airbnb is a really great alternative.”
Anita, as usual, provides a little more insight into the “story” behind an Airbnb investment model. “When we use Airbnb, we love it for the space and the fact that it is a house instead of just a hotel room. We have three kids, so a hotel room is tight! In an Airbnb we have more space; I can cook for them if I need to, and it’s just better a lot of times.” When we’re looking at renting out our Airbnb investment properties or at acquiring new ones, we think about these same things. It’s just another way of evolving and preparing for the market in the future.”